The last word from Mike Underhill as he reflects on his career as chief executive at EECA over the past nine years and how a track record of a small government agency shows that, over a decade, real change can happen.
AFTER A CAREER in the energy sector and nearly 10 years leading the Energy Efficiency and Conservation Authority, you’d think I’d be able to fix a few things before retiring.
Unfortunately, there’s still the small matter of international climate change – the most important energy-related issue facing us today. In fact, the symptoms have become steadily worse with 2016 set to be the hottest year on record.
Around the world a concerted and serious effort is needed to tackle climate change and New Zealand has a role to play. I am excited about the opportunities in front of us.
For most of my career, the energy-related issue we worried about most was whether we had enough supply to meet our growing needs. By ‘energy’ we generally meant electricity, which has always come mostly from renewable sources. We rested happily on those laurels; meanwhile our industry and transport sectors ran on coal and oil.
Two things happened at around the time I joined EECA as chief executive in 2007. The volatility of oil became painfully apparent when petrol prices shot past the $2/litre mark; and evidence linking climate change with the burning of fossil fuels became more widely accepted.
EECA, with its mandate to promote energy efficiency and renewable energy, has a role to play in both these issues. Making more of our abundant renewable electricity will not only reduce our dependence on imported oil, it will also help us transition to a low emissions economy.
It seems like a big mountain to climb – but so was making New Zealanders realise their homes didn’t have to be cold, damp and drafty. Since EECA started the Warm Up New Zealand programme in 2009, more than 294,600 homes have been insulated directly with our funding assistance, including 150,000 low-income households. We’ve improved the health and wellbeing of hundreds of thousands of New Zealanders, and transformed our national psyche about how homes should be.
Our ‘Energy Spot Guy’ has become a household face through our TV advertising campaign, which introduced simple steps to reduce household power and petrol bills. With 28 episodes shown over more than six years it’s shown extraordinary longevity but more importantly, it’s inspired around 40 percent of viewers to take energy efficient actions in their homes.
The campaign also raised awareness of our Energy Rating and ENERGYSTAR labels. These help shoppers factor in energy efficiency when they buy new appliances, while our minimum energy performance standards keep poor performing and inefficient appliances out of the country. Don’t underestimate the power of this seemingly humble programme. Since it began in 2002, energy efficiency labelling and regulation have influenced sales of 54 million products, creating $560 million in savings to the country, and saving the carbon produced by more than 300,000 cars in a year.
These examples show how small changes add up to make an impact – and that’s just the residential sector. In the business sector, we’ve formed energy management partnerships with businesses that represent 40 percent of the energy use of all New Zealand businesses in the past two years.
I think the best is yet to come. The greatest gains for our country will come when we switch from fossil fuel to renewable fuels. There are two big opportunities here. The first is in transport, where EECA has actively promoted electric vehicles as a practical solution to New Zealand’s carbon challenge for the past couple of years. The government’s package of wide-ranging measures to increase the uptake of EVs, announced in May, is an exciting step forward. As part of the package, EECA will design and deliver a $1 million a year EV information and promotion campaign over five years, and administer a contestable fund of up to $6 million a year to encourage and support innovative low emission vehicle projects.
Businesses purchase or lease the majority of new vehicles bought in New Zealand – 66 percent in 2015 – so they are key players. I’m genuinely excited by how quickly the business sector has jumped on board the government’s commitment to get more electric vehicles on our roads. In late 2016, 30 of our largest companies pledged 30 percent of their corporate fleets would be electric by 2019 – that was unthinkable just a year ago.
Our second big opportunity for fuel switching is industrial heat, which is used in huge quantities in manufacturing and food processing. In 2016, EECA completed a two-year pilot project exploring opportunities in the meat and dairy sector, where the energy used for processing is mainly fossil fuels in the form of coal and gas. We worked with energy management experts who identified opportunities to reduce carbon emissions through heat recovery processes and boiler tuning as well as switching to fuels such as wood. The 35 sites implemented and/or committed to actions avoiding 9600 tonnes of carbon dioxide a year, with an additional 15,000 tonnes of potential reduction identified. We’ve now integrated the project into our wider business programme.
Interest and confidence in renewable energy sources have grown in the past year, with more businesses working with us to develop feasibility studies and business cases setting out the options. Strong precedents have been set by the likes of Burwood Hospital in Christchurch, which switched from coal to wood earlier in 2016.
The New Zealand Energy Efficiency and Conservation Strategy, currently undergoing a refresh process, offers an opportunity to strengthen focus in both the transport and industrial heat areas.
Our climate change challenge is real and it’s urgent, but we shouldn’t feel helpless or overwhelmed. The track record of a small government agency like EECA shows that over 10 years, real change can happen. Each generation seems to embrace energy efficient behaviours more readily than the last and over time, these actions are making better sense commercially as well as morally.
To fast track actions we need to continue building a cross-government view that weaves together energy, environment, the economy and public health. The closer we align, the bigger our impact, particularly if we take businesses and the public along with us.
Countries around the world are now competing to be the next renewable energy rock star – capitalising on our abundant resources will earn us a spot centre stage.
• Mike Underhill retired from his role as EECA’s chief executive in November 2016.