Energy

December 2008 Fact Sheet No. 19www.ces.vic.gov.au

Our dependence on greenhouse-intensive energy has to change

This fact sheet is one of a series, developed from material presented in Victoria’s first comprehensive State of the Environment Report. The Report is a major undertaking of the Commissioner for Environmental Sustainability and covers a broad range of environmental issues affecting the State. Its purpose is to improve community understanding of Victoria’s environment, and through the use of recommendations, to enhance its condition for present and future generations. The report was released in December 2008 and is available at www.ces.vic.gov.au

Key findings

• Asaresultofagrowingpopulationandmoreenergy-intensive lifestyles, energy consumption has increased by more than 80% over the last 30 years

• Greenhousepollutionisthemostsignificantenvironmentalimpact of our reliance on fossil fuels for energy

• 95%ofelectricityusedinVictoriacomesfrombrowncoal,themostgreenhouseintensivesourceinAustralia

• Only4%ofelectricitycomesfromrenewablesources• Transportcontributes17%ofVictoria’sgreenhousegas

pollution

This fact sheet should be read in conjunction with Fact sheet 1, Climate Change.

Victorian energy is greenhouse intensive

Victoria’s abundance of easily accessible brown coal has provided us with cheap electricity and attracted a range of energy-intensive manufacturing industries. However, electricity produced from brown coal is highly greenhouse intensive, 30% more intensive than black coal, and six times more intensive than gas. Partly as a consequence of this. Energy use, including that used in transport,isresponsiblefor85%ofVictoria’sgreenhousegaspollution.

Transport energy is also derived from fossil fuels. Victoria’s long history of prioritising road building over public transport, walking and cycling has created a transport system that is also highly greenhouse emissions intensive. Our car dependent transport system leaves those without alternatives vulnerable to future petrol price rises as a result of oil shortages or a carbon price.

Victoria has great potential for renewable energy, including wind, solar, wave and geothermal, yet very little has so far been exploited.Only4%ofVictoria’selectricitycomesfromrenewablesources with just 0.006% from solar.

Figure 1. Greenhouse gas emissions from energy compared to other sectors (MT CO

2-e)

Other environmental pressures of energy use

While the emission of greenhouse gases (ghg) is the most pressing environmental impact of energy use, it is not the only one.

Electricity generators use substantial quantities of surface water – enough to supply a quarter of Melbourne’s needs - for cooling and to drive steam generators. Electricity generation also contributes significantly to levels of local air pollution particularly, in the Latrobe valley. The energy used in transport is also responsible for localised air pollution, which can affect health and amenity, especially in urban areas.

Energy efficiency – a vital component

Opportunities exist for mitigating the impacts of energy use through increased energy efficiency at little or no cost, and some even lead to savings. For example, the cost of insulating a house may be more than recouped by lower heating bills – especially as carbon-intensive energy prices are expected to rise as a result of carbon pricing. Energy efficiency needs to be increased in the commercial and industrial sectors too.

On average, public transport is more energy efficient and produces fewer greenhouse gas emissions than cars. Significant reductions in overall emissions can be achieved by encouraging people to switch from cars to public transport, especially in off-peak times when there is more spare capacity.

Commissioner Environmental SustainabilityVictoria

TheVictorianGovernment’sapproach

TheVictorianGovernmenthasanumberofprogramsinplaceto reduce the demand for and impacts of energy. These include the Victorian Energy Efficiency Target, which aims to reduce energy use through the subsidised provision of energy efficiency measurestohouseholds;the5StarBuildingStandardfornewresidential homes; and Environment and Resource Efficiency Plans which are now required for large commercial and industrial users of energy and water.

The Victorian Renewable Energy Target aims to have 10% of the State’s electricity supplied by renewable sources by 2010. It is expected that the target will be incorporated into the Federal Mandatory Renewable Energy Target.

The Energy Technology Innovation Strategy provides funds to develop low-emissions technologies. Funding has been directed at both large-scale renewable projects, and towards carbon capture and storage (CCS) or ‘clean coal’. The future of brown-coal electricity generation is dependent upon clean coal becoming commercially viable, but many technological and cost hurdles remain.

The Carbon Pollution Reduction Scheme

The primary mechanism for addressing greenhouse gas emissions from major polluters, including electricity generators, istheCommonwealthGovernment’sCarbonPollutionReductionScheme (CPRS), scheduled for introduction in 2010. Under the CPRS, emissions caps will limit ghg emissions from major polluterswhowillhavetobuyemissionspermits.Asthenumberof permits offered for sale decreases from year to year, the price of permits will rise, encouraging a shift from high-emissions to low-emissions products and services.

The CPRS will have a significant impact on Victoria’s electricity supply. The price of brown-coal electricity will rise, while renewables will become increasingly cost-competitive.Petrol is expected to be included in the scheme but is to be offset by an equivalent drop in the fuel levy for the first three years of the scheme at least, thereby removing the effect of encouraging behaviour change and also reducing the revenue raised.

What the Commissioner says

“The CPRS must be robust; without concessions to electricity generators or other energy-intensive industries that delay or hinder the urgent and necessary transformation to a low-carbon energy sector.

“The Victorian Government must develop a suite of complementary measures to help business and the community to reach the emissions abatement targets at the least economic and social cost.

“Energy efficiency must be increased urgently – buildings could now be built and retrofitted with current technology to use much less energy, and at minimal cost.

“Public transport, together with cycling and walking, needs a massive boost to give more people viable, cleaner alternatives to the car”

What you can do

• Reduceyourenergyuse.Athome,youcaninstallroofandloft insulation to reduce your heating bills; buy efficient appliances and turn them off at the wall; consider a solar hot water system. Try to reduce the amount you travel; walk or cycle rather than driving; share a car or buy a more fuel-efficient car.

• Reducetheimpactsofyourenergyusebybuyingrenewably-sourcedGreenPowerorinstallingaphotovoltaicsystem.

• Getinvolved:Supportcallsforstronggreenhousegasreduction targets and actions.

For more information

See the State of Environment Report Victoria 2008, Part 3.1; Energyathttp://www.ces.vic.gov.au

State of the Environment Victoria 2008 Fact Sheet SeriesPublished by the Commissioner for Environmental Sustainability Melbourne, Victoria, 2008©The State of Victoria, Commissioner for Environmental Sustainability 2008This publication is copyright. No part may be reproduced by any process except in accordance with the provisionsoftheCopyrightAct1968.

AuthorisedbytheVictorianCommissionerforEnvironmentalSustainability,16/570BourkeStreet,Melbourne, Victoria 3000

For further information contact the Office of the Commissioner for Environmental Sustainability, phone +61396378000orvisithttp://www.ces.vic.gov.au/SoE

DisclaimerThis report may be of assistance to you and every effort has been made to ensure that the information providediscorrect.ItisbasedlargelyondataandinformationprovidedbytheVictorianGovernment.The Commissioner for Environmental Sustainability does not guarantee that the report is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

Figure 2. Greenhouse gas reductions from switching from cars to public transport in Melbourne, 2007