News from the International Energy Agency (IEA) that Australia’s manufacturing sector is the most energy intensive of nineteen advanced economies is cause for concern, says the Energy Efficiency Council.
Council CEO Luke Menzel said the IEA’s Energy efficiency indicators report underlines the vulnerability of Australian manufacturers that are yet to embrace proactive energy management.
“The IEA has found that Australia has the most energy intensive manufacturing sector of the 19 advanced economies they reviewed,” Mr Menzel said.
“Some of this result will be due to industries that are inherently energy intensive setting up shop in Australia due to historically low energy prices.”
“However, we know from a raft of reports over many years that Aussie manufacturers are at the back of the pack when it comes to energy productivity. That was fine, even three or four years ago.”
“But now manufacturers and other large energy users are caught in a pincer movement between rising electricity and gas prices. And in some cases these cost pressures are threatening the viability of businesses.”
“The good news is that manufacturers can quickly slash their energy bills with ambitious energy upgrades that bring their operations in line with our global competitors.”
The IEA’s report also found Australia’s manufacturing sector was the only one to become more energy intensive between 2010 and 2014.
“Every other advanced economy was increasing the resilience of their manufacturing sector to energy price shocks in the first half of this decade, by bringing down their energy intensity. We were doing the opposite – just before gas prices skyrocketed,” Mr Menzel said.
“We need to sort out the supply side of the market and bring down the unit cost of energy. But that will take years. In the meantime, Australia needs to get serious about industrial energy efficiency.”
“We have a lot of ground to make up. We call on government, manufacturers and experts to work together make 2018 the year we turned the tide, and began the climb from the bottom of the energy productivity league table to the top.”