As a thought experiment, imagine you are serving as shadow energy spokesperson in the Federal Opposition.

Much of your time is spent fielding concerns from business and consumer groups about the policy dysfunction that leaves Australia facing a lose-lose situation of rising carbon emissions and rising energy bills.

You also have the unenviable job of crafting an energy policy for the next election that is politically viable, has some hope of being implemented and is capable of sorting out this mess.

What do you do?

There’s an endless array of potential solutions, but the one that Mark Butler, Labor’s shadow minister on Energy and Climate Change unveiled recently, came in two parts: the much-discussed proposal to revive the National Energy Guarantee (NEG) with a more ambitious carbon reduction target, and a somewhat overlooked suite of measures to improve Australia’s energy efficiency.

These energy efficiency measures got less attention, but are no less important. Think of Labor’s policy measures on the NEG, renewables, and battery storage as the radio-friendly single that receives huge amounts of airplay.

However, Labor’s plan to improve energy efficiency and productivity—how we use the energy we generate—is a very solid b-side. It could have as big an impact as renewable energy for the affordability and sustainability of Australia’s energy system.

Labor’s energy efficiency measures included an additional $10 billion for the Clean Energy Finance Corporation, which, based on past investment trends, is likely to be split almost equally between renewables and financing for energy efficiency; expanding  the Australian Renewable Energy Agency’s remit to include energy efficiency; and $20 million for manufacturers to help them access advice from experts to save energy.

There was also a further $10 million to train engineers and others in best-practice energy management.

First and foremost, these commitments will keep electricity bills low. Because bills are the result of how much energy costs and how much of it we use, improving energy efficiency saves us money.

Not only that, but experts around the world agree we can’t decarbonise the global economy with renewable energy alone—energy efficiency can deliver around 40% of the emissions reductions Australia needs to achieve by 2030.

Unfortunately, our performance on energy efficiency is abysmal. As Bill Shorten noted in his speech announcing Labor’s policy, an independent assessment by the American Council for an Energy Efficient Economy (ACEEE) placed Australia last in the developed world on energy efficiency policy and performance. In fact, there are several developing countries – such as India, China and Indonesia – that all rated higher than us in the ACEEE’s 2018 scorecard.

Australia’s woeful performance on energy efficiency means our homes, our offices and our manufacturers are all using much more energy than they need to, leading to higher bills.

That’s why the most crucial measure in Labor’s energy policy was a commitment to an independent “Energy Affordability and Productivity Review”. This is the root and branch inquiry the Energy Efficiency Council has been calling for, a kind of ‘Finkel Review’ for energy efficiency.

It will work through why we’re so behind global energy efficiency rankings, and make recommendations on how we can leap up the global leaderboard.

This review is critical for Australia’s future. Substantive improvements in energy efficiency will unlock huge cost savings, economic gains, and emissions reductions, and make it easier and cheaper to transition to low carbon generation like solar and wind.

Labor’s effort on energy efficiency is not just a b-side to renewable energy’s radio friendly single.

Energy efficiency has the potential to be the sleeper hit of Australia’s energy transition, and as the energy debate heats up in the run-up to the next Federal election, it is an easy win for electricity prices and emissions that all parties should commit to supporting.


Luke Menzel is the chief executive officer of the Energy Efficiency Council.