Energy Strategy Requires Strong Industry Commitment

Greater management focus on energy efficiency could cut industry costs and improve business competitiveness and profits.

Minister of Energy Pete Hodgson today launched the draft National Energy Efficiency and Conservation Strategy, which proposes a range of measures to lift the energy efficiency performance of New Zealand businesses and industry.

The initiatives in the draft strategy are based on commitment programmes by industry to increase energy efficiency by between one and two percent a year.

“Energy efficiency is one of the most cost-effective investments businesses can make,” Mr Hodgson said.

“Most New Zealand businesses could cut their energy costs by 20 to 30 percent a year through cost-effective energy efficiency initiatives.

“The draft strategy is about setting targets for further energy efficiency improvements in the commercial and industrial sectors. That will help industry to cut energy costs and improve business competitiveness and profits.”

Seven hundred of the country’s largest organisations are already part of the Energy-Wise Companies Campaign, run by the Energy Efficiency and Conservation Authority.

Since 1994 campaign members have reduced carbon dioxide emissions by 184,000 tonnes per year, as well as saving millions of dollars in energy costs.

The draft strategy says further economic and environmental gains are possible with greater management commitment, supported by adequate incentives.

The small number of very large, energy-intensive export-oriented industries for which energy forms a significant part of their cost structure already have strong a incentive to invest in efficient energy use.

BHP New Zealand Steel, for example, reduced its annual $100 million energy bill by $12 million in 1997 and reduced energy consumption per tonne of product by seven percent through a major improvement programme.

Negotiated greenhouse agreements are proposed for energy intensive industries and those with high emissions levels. These would expand the current voluntary agreements programme and focus on firm targets for greenhouse gas emissions improvements.

A business commitment programme for small to medium enterprises would have key principles similar to the Energy-Wise Companies Campaign but more focus on implementation, consultancy and technical support.

“Financial incentives could include accelerated depreciation for energy efficiency measures implemented after a standards-approved energy audit,” Mr Hodgson said. Audit subsidies could be available for members of the above programmes.

An industry programme tax break is proposed longer term, dependent on this year’s tax review.

Other proposals include minimum energy performance standards and labelling for generic industry equipment; best practice sector studies; international benchmarking; research on woody biomass utilisation; and industry training programmes.

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