Energy provider delivered energy efficiency
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This document summarizes an energy efficiency program between Origin Energy and Low Carbon Australia that provides on-bill financing for commercial and industrial customers to implement energy efficiency projects. The program offers end-to-end project support including audits, financing from Low Carbon Australia, repayment through utility bills, and guaranteed energy savings. It aims to make energy efficiency investments more accessible and reduce risks for customers. Initial results found that on-bill financing with guaranteed savings addressed key barriers to energy efficiency adoption.
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Energy provider delivered energy efficiency
- 1. Energy Provider猷Delivered Energy Efficiency A global stock猷taking based on case studies Grayson C. Heffner, International Energy Agency Peter du Pont, Greg Rybka, Carina Paton, and Lynn Roy, Nexant, Inc. Dilip Limaye, SRC Global Incorporated 息 OECD/IEA 2012 The views expressed in this IEA Insights Paper do not necessarily reflect the views or policy of the International Energy Agency (IEA) Secretariat or of its individual member countries. This paper is a work in progress and/or is produced in parallel with or contributing to other IEA work or formal publication; comments are welcome, directed to Grayson.heffner@iea.org. 息 OECD/IEA, 2013
- 2. 息 OECD/IEA 2013 Energy Provider猷Delivered Energy Efficiency A global stock猷taking based on case studies Origin Energy Table 36 Energy Savings Guarantee Programme Page | 107 City, country, region Australia Programme type Advice and assistance, on猷bill financing Program tenure Ongoing since 2011 Sector focus Commercial and industrial, public sector. Technology focus All Encourage business investment in energy efficiency and clean technology, while contributing to Origin Energys energy efficiency obligation. Budget AUD 12.7 million (2011猷2013) Investment cost of <USD 23/tCO2e Savings Annual savings: Contact information Daniel Trujillo (Origin Energy): Tel. +61 3 9821 8028, Daniel.trujillo@originenergy.com.au Paul Greenop(LCAL): Tel. +61 7 3188 1643, Paul.Greenop@lowcarbonaustralia.com.au. Reference http://www.lowcarbonaustralia.com.au/media/13545/origin_factsheet.pdf Summary and background Origin Energy and Low Carbon Australia (LCAL) established a strategic alliance to make it easier and more cost effective for businesses across Australia to finance and implement their EE projects. Origin provides an end猷to猷end service, adding value to their business customers and improving their ability to acquire new customers and retain old ones. LCAL provides the financial support and repayment model while Origin is a strong brand partner with good access to business customers as well as markets and distribution channels. The Energy Savings Guarantee (ESG) programme features on猷bill financing. Origin structures the terms so that payment are offset by energy savings, thus providing energy bill stability and eliminating the need for businesses to raise the upfront capital for energy efficiency investments. Programme description The strategic alliance between Origin and LCAL provides accessible project financing to Origins business customers. The programme provides end猷to猷end project support, including energy audits and project identification, structured repayment terms offset by energy savings, provision of project financing from LCAL and repayment through the Origin Energys billing system, and provision of expertise and support needed to deliver the project.
- 3. Energy Provider猷Delivered Energy Efficiency 息 OECD/IEA 2013 A global stock猷taking based on case studies Origin applies a simple 5猷step delivery process: 1) assess a candidate organizations objectives and suitability; 2) perform on猷site assessments; 3) provide detailed energy savings reports, quantifying costs and savings in kWh and CO2; 4) implement energy saving measures which can be guaranteed within 賊20%; and 5) deliver a complete M&V report to verify the savings. LCAL provides a credit line to Origin to on猷lend to businesses, adding its own EE experience and Page | 108 expertise. Meanwhile, Origin offers business customers a full service model for delivering EE solutions, with end猷to猷end project management, zero upfront cost, and an energy savings guarantee. This means the monthly cost to business customers is offset by energy savings, with no net increase in their energy bill and no risk to the business customer. In some cases, customers achieve a cost reduction in their energy bill even while repaying the loan from LCAL. This programme is marketed to Origins existing and prospective commercial and industrial customers with a minimum annual energy consumption of 160 MWh. Regulatory and market drivers Given the introduction of a price on carbon in Australia, and existing state and federal reporting schemes, EE has become a near necessity for a businesss economic viability. Other regulatory drivers include the Energy Savings Opportunities Programme managed by Department of Resources, Energy and Tourism (DRET) and the state energy efficiency obligations schemes in New South Wales, Victoria, and South Australia. Energy savings from the ESG can be accredited for sale in the Energy Savings Certificates (ESC) market. Origin Energy and LCAL support participating customers to generate ESCs for projects delivered but the participating customer, not Origin Energy, owns these ESCs. Depending on the circumstances and the project, Origin Energy might buy the ESCs generated from the participating customer, but this is a separate transaction from the project itself. In other cases the ESCs are left with the participating customer to trade directly with market intermediaries. Lessons learned x Customer decision猷making can be very time猷consuming. Decisions often require multiple decision猷makers to buy in to the project. Even with an internal champion, competing priorities within the business and unclear mandates may delay or even halt a project. x EE must constantly compete with other priorities for budget and management attention. Customer education is needed to emphasize the value of EE, especially given increasing energy costs and regulations. Targeted marketing campaigns regarding EE finance options and other government incentives have strengthened the overall Origin value proposition. x The Energy Saving Guarantee is very attractive to customers that have deferred EE projects due to lack of funding or lack of expertise to deliver. Customers with the capacity and capability to implement projects themselves may prefer to self猷fund activities. x The EE industry is burgeoning in Australia, but there is sometimes spotty product quality and expertise. In response Origin has built a network of trusted, experienced partners and suppliers in the most common EE areas.