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Embedding Energy Efficiency Teaching into VET and Higher Education Presentation on 27 October 2011
 

Embedding Energy Efficiency Teaching into VET and Higher Education Presentation on 27 October 2011

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UTS Business School Energy Efficiency for VET and Higher Education Presentation to TAFE/ UTS staff, 27 October 2011.

UTS Business School Energy Efficiency for VET and Higher Education Presentation to TAFE/ UTS staff, 27 October 2011.

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  • These materials will be referenced to: Benn, S., Brown, P., Brown, D., Crittenden, P., and Krithinakis, A., 2011. Leadership & Change for Energy Efficiency in Accounting & Management: Educators Interactive Seminar. 27 October 2011. Project funded by the Office of Environment & Heritage, Department of Prime Minister & Cabinet NSW. Benn, S. 2011. Leadership & Change for Energy Efficiency in Accounting & Management: Educators Interactive Seminar , Version 1.0, September 2011, Report for NSW Office of Environment & Heritage.

Embedding Energy Efficiency Teaching into VET and Higher Education Presentation on 27 October 2011 Embedding Energy Efficiency Teaching into VET and Higher Education Presentation on 27 October 2011 Presentation Transcript

  • Embedding energy efficiency teaching into VET and Higher Education Educators ’ Interactive seminar UTS Business School 27 October 2011 Leadership & Change for Energy Efficiency in Accounting & Management
  • Disclaimer
    • This presentation presents the views of the authors, and not the views of UTS, or any other party.
    • This presentation is for educational purposes only and does not contain specific or general advice.
    • Please seek appropriate advice before making any financial decisions.
    • Reference list is provided at the end of the presentation
  • Referencing this material
    • This material has been developed by UTS Business School in a project funded by the NSW Office of Environment & Heritage (OEH) under the Energy Efficiency Training Program.
    • If using these materials please acknowledge as follows:
      • Benn, S., Brown, D., Brown, P., Crittenden, P., and Krithinakis, A., 2011. Leadership & Change for Energy Efficiency in Accounting & Management: Educators Interactive Seminar. 27 October 2011. Project funded by the Office of Environment & Heritage, Department of Prime Minister & Cabinet NSW.
  • Welcome & introductions Professor Suzanne Benn UTS Business School
  • Interactive seminar - outline
    • Energy efficiency – the business context
    • Outcomes from the project Training Needs Analysis
    • Embedding energy efficiency into university accounting courses – examples
    • ‘ Opportunities’ for embedding energy efficiency from your perspective
    • What would help you and your colleagues?
    • Evaluation
  • Project funding
    • Office of Environment and Heritage
    • Energy Efficiency Training Program
      • ‘ supports the development and delivery of higher education courses that enhance energy efficiency knowledge and practice’.
  • Key Project Partners
    • UTS Business School
    • Ernst & Young
    • Chartered Institute of Management Accountants (CIMA)
    • Westpac
    • TAFE NSW, Sydney Institute
  • Project Overview
  • Introductions
    • Briefly (30 seconds!)
      • Your organisation
      • Your role
      • Why energy efficiency is relevant to you and your work
  • Interactive Seminar - Outcomes
    • In this seminar you will:
      • Learn from others about embedding energy efficiency into teaching and learning for accountants & business managers
      • Share your own experience
      • Provide input to the project
      • Identify additional actions that you might take
  • UTS Business School approach sustainability
    • Content and teaching method must be relevant to the core aspects of the discipline
    • For example:
    • Economics -> Externalities
    • Accounting -> Information needed for decision makers and controlling operations
  • Interactive Seminar - Aim
    • To promote and encourage the embedding of energy efficiency into teaching and learning in VET and Higher Education
  • Energy Efficiency – the business context Patrick Crittenden Sustainable Business P/L
  • What is Energy Efficiency?
    • Energy efficiency primarily refers to end-use efficiency.
    • It involves delivering equal or greater levels of “ energy services ” with less energy supply.
    • Energy services include cooling, heating, lighting, driving motors, operating equipment and appliances.
    Dunstan et al. 2011, p.10
  • Electricity generation by fuel type in Australia Source: Geoscience Australia 2010 p34
  • The boundary The electricity supply chain 2 units of light energy delivered 100 units of energy input
  • The boundary The electricity supply chain 62 units lost 2 units lost 34 units lost 2 units of light energy delivered 100 units of energy input
  • The boundary Energy efficiency example 80% saving in energy end use delivers benefits across the electricity supply chain
  • ClimateWorks 2010 “ Low Carbon Growth Plan for Australia ” Many cost-effective energy efficiency projects exist but are not being taken up
  • International Energy Agency – 450 scenario Source: IEA (2011) World Energy Outlook Efficiency measures account for 59% of abatement in 2020 26 28 30 32 34 36 38 40 42 2007 2015 2020 2025 2030 Gt 2010 Efficiency 65 57 End-use 59 52 Power plants 6 5 Renewables 18 20 Biofuels 1 3 Nuclear 13 10 CCS 3 10 Share of abatement % 2020 2030 3.8 Gt 13.8 Gt Reference Scenario 450 Scenario
  •  
  • Four key business risks that energy efficiency can address
    • Cost containment
    • Carbon pricing
    • Compliance with legislation
    • Licence to operate
  • Business risk: Cost containment
    • Electricity prices are rising
    • Oil price highly variable
    Energy efficiency is effective in reducing the business impact of rising and variable energy costs
  • Source: Geoscience Australia, 2010 p18
  • Source: Geoscience Australia, 2010 p28
  • Business Risk: Carbon pricing
    • From July 2012 - carbon price of
    • $23 a tonne, 2.5% increase p.a
    • Fixed for 3 years then market-based
    • Direct liability = Direct costs
    • Increased costs in the supply chain
    • = flow through impact on your business
    Energy efficiency is the most cost- effective way of reducing the impact of a price on carbon
  • Business Risk: Compliance with legislation
    • Some relevant current legislation:
      • National Greenhouse and Energy Reporting Act 2007
      • Energy Efficiency Opportunities Act 2006
      • Renewable Energy (Electricity) Bill 2009
      • Building Energy Efficiency Disclosure Act 2010
      • Energy and Utilities Administration Act 1987 No 103
      • NSW Water and Energy Savings Action Plans
      • And other accounting, reporting, and auditing standards
  • Business Risk: Compliance with legislation
    • Exposure draft ISAE 3410 Assurance Engagements on Greenhouse Gas Statements
    • Environmental Claims in Advertising and Marketing Code
    • ISO and other quality assurance guidelines
    Legislative compliance associated with energy efficiency and greenhouse related issues is increasingly complex
  • Business Risk: Licence to Operate
    • Some stakeholder perspectives:
    • Investors – Can energy efficiency provide a proxy indicator of good management?
    • Community – Why isn ’ t this organisation acting on cost effective opportunities to reduce greenhouse gas emissions?
    • Regulators – Perceived market failures justify intervention
    Organisational stakeholders are increasingly aware that energy efficiency has important business, environmental and social benefits.
  • Other business drivers and opportunities
    • Your competitors are doing it!
    •  See public reports from companies in the Energy Efficiency Opportunities program to compare your performance www.energyefficiencyopportunities.gov.au
    •  See the Carbon Disclosure Project
    • www.cdproject.net
  • Energy Efficiency Opportunities - results
    • 207 corporations (end 2010 public reports)
    • identified opportunities with a better than 4 year payback
    • have the potential to reduce their energy use by an average of 9.8 per cent
    • Energy reduction of 141.9 PJ of energy per year = 2.5 per cent of Australia ’ s total energy use
    • financial benefit around $1.2 billion per year.
  • Ethical Reasons (Greenhouse Gas Emissions) Source: Garnaut Climate Change Review 2008, p 88
  • Case Study - The GPT Group Source: Accessed 6/9/11 from www.gpt.com.au/content.aspx?urlkey=Energy
  • Example - The GPT Group
    • Senior management support
    • Appropriate resourcing
    • Data measurement and reporting
    • Staff recruitment and training
    • Performance management system
    The GPT Group have put the right systems in place to deliver results. Energy Efficiency is considered an opportunity to create a competitive advantage.
  • Example - Linfox Australia Source: Linfox Energy Efficiency Opportunities Public Report 2010 p 17
  • Example - Linfox Australia Source: Linfox Energy Efficiency Opportunities Public Report 2010 p 17
  • ClimateWorks 2010 “ Low Carbon Growth Plan for Australia ” Many cost-effective energy efficiency projects exist but are not being taken up
  • Barriers to energy efficiency improvement in business Dunstan et al. 2011, p.10
  • Example – Split incentives in the real estate sector Source: WBCSD, 2009 p12
  • Training Needs Analysis Dr. David Brown UTS Business School
  • UTS Business School Accounting discipline groups approach to energy efficiency
    • Collaborative approach which is part of a wider review of our programs.
    • Using EE as an example of how general accounting techniques can be used.
    • Slides, tutorial exercises, case studies.
    • For example:
      • energy budgeting;
      • variance analysis using energy data;
      • capital budgeting for EE projects
  • Training Needs Analysis - Focus Groups
    • NSW TAFE, Sydney Institute (6 participants)
    • CIMA members (11 participants )
    • Engineering, architectural design, legal (5 participants )
    • Westpac (6 participants )
    • Targeted interviews with:
    • Energetics (2 interviewees )
    • Senior Executive from ASX200 company
    • UTS Business School (4 interviewees )
  • Training Needs Analysis – Key Themes
    • Organisational response to energy efficiency needs to be cross-disciplinary
      • Accountant as business partner
    • There is demand for Energy Efficiency training and training materials for accountants and business managers
    • Soft skills as well as analytical/ technical skills are important
  • Training Needs Analysis – Key Themes (cont.)
    • The rationale for action/ importance of Energy Efficiency is a fundamental starting point
    • Application/ approach will vary across:
      • Public and private sector
      • Type of industry sector
      • Firm strategy
      • Firm culture
  • Training Needs Analysis - Skills
  • Discussion
    • What are your perceptions of industry needs in terms of embedding energy efficiency?
    • Are there any additional themes or skills that you are aware of that we should take into account?
  • Embedding energy efficiency into university accounting courses – some examples Dr. Paul Brown UTS Business School
  • Energy Efficiency Fundamentals - Establish your energy base case
    • Not just the level of energy
    • It is the expected level of energy, for an expected level of activity
    • Expected Energy = Fixed energy + Variable Energy * Activity
    • How is this different from estimating ‘ pre-determined overhead rates ’ ?
      • Units are different ($ and kilowatt-hours or Giga Joules)
      • Energy complies with the laws of thermodynamics (unlike people)
  • Establish your energy base case
    • Estimation methods are similar to cost accounting:
      • Regression Analysis
      • Modelling / simulation (like input /output analysis)
      • Short term metering
      • Long term metering
    • Engineering models and equipment are used, so work with a specialist
      • E.g.. Consider the effect of weather on demand for energy
  • For example:
    • A building in NT implemented a range of EE projects
    • Total Annual Consumption for 04/05 in kWh: 1,605,138
    • Total Annual Consumption for 05/06 in kWh: 1,597,135
    • Naive Energy Saving in kWh: 8,003
    • Linear regression was used to control for differences in weather (the base year had a cool summer)
    • Total Annual Consumption for 04/05 in kWh: 1,775,546
    • Total Annual Consumption for 05/06 in kWh: 1,597,135
    • Energy Saving in kWh: 178,411
    • Difference is a 10% saving, vs a 0.5% saving in energy
  • It is important to clearly identify organisational activities, and boundaries
    • We are familiar with the value chain approach, and the benefits of linking resources consumption with activities
    • Figure of Generic value chain (Porter, 1985) sourced from Cooremans (2011)
  • It is important to clearly identify organisational activities, and boundaries
    • Information ‘ should ’ link with existing accounting structures
    • Base line review is likely to reveal opportunities, which will justify further expenditure as opportunities become known
    Source: RET 2008
  • Energy Base case information
    • Here are some examples of the type of information useful for identifying EE opportunities
    Source: RET 2008
  • Hints:
    • Start simply, and do something:
      • Find out what is happening in your organisation
      • Review electricity statements for different facilities
      • Review energy supply contracts
  • Hints:
    • Organise data to match current reporting systems
      • Eg. Batch vs process costing; KPIs
    • Let people know what you are doing, and make data transparent
  • Hints:
    • Conduct an energy information audit:
      • Ensures your organisation captures new knowledge
    • Find champions in each major facility and department and let them loose with some decision making rights
  • Developing the business case for an energy efficiency project
    • Clear identification of the costs and benefit
      • Translated into NPV, IRR, Payback etc
      • Opportunity cost
    • Identifying direct costs and cost savings may rely on engineering analysis, as well as cost analysis
      • E.g. A process change effect on your base case and on demand for labour
    • All costs and benefits should be included
      • Information value, strategic value
  • Information useful in preparing the business case
    • Costs are easier to identify than benefits
      • Labour, equipment, consultants etc
    • To assist in the identification of benefits, we have provided a checklist:
      • The 6 key drivers of EE discussed in the beginning of the presentation
      • a list of benefits identified in reviews of the literature ( Worrell et al 2003; Cooremans, 2011)
  • Developing the business case for an energy efficiency project
    • Reduced Cost
    • Improved temperature control
    • Increased reliability in production
    • Improved product quality
    • Reduced Risk
    • Greenhouse gas reductions
    • Improved reputation
    • Safety
    Include all business costs and benefits to increase the chance of success
  • Some sources of competitive advantage from EE: REDUCED RISKS (from Worrell et al 2003 and Cooremans, 2011)
    • Reduced hazardous waste
    • Reduced dust emissions
    • Reduced CO, CO2, NOx, Sox emissions
    • Increased facility reliability
    • Reduced wear and tear on equipment /machinery
    • Decreased liability
    • Legal risks
    • Carbon & energy price risks
    • Disruption of energy supply
    • Commercial risk
  • Some sources of competitive advantage from EE: REDUCED COSTS (from Worrell et al 2003 and Cooremans, 2011)
    • Use of waste fuels
    • Reduced product waste
    • Reduced waste water
    • Materials reduction
    • Increased product yield
    • Improved equipment performance
    • Shorter process cycle time
    • Reduced dust emissions
    • Reduced CO, CO2, NOx, SOx emissions
    • Reduced wear and tear on equipment machinery
  • Some sources of competitive advantage from EE: REDUCED COSTS (from Worrell et al 2003 and Cooremans, 2011)
    • Decreased liability
    • Reduced need for personal protective equipment
    • Improved lighting
    • Reduced turnover, absenteeism and health costs (improved worker morale, reduced noise, improved air quality and temperature control)
    • Reduced needs for engineering controls
    • Lowered cooling requirements
    • Reductions for labor requirements
    • Delaying or Reducing capital expenditures
    • Additional space
  • Soft Skills
    • Soft skills
      • Communication
      • Influencing others
      • Partnering
      • Change management
      • Team building
      • Problem solving
  • Small group discussions
  • Questions
    • In what topic areas do you see opportunities to embed teaching and learning on energy efficiency?
    • What teaching strategies and approaches would be appropriate?
    • What type of teaching and learning materials would best support you with embedding energy efficiency into your teaching/ curriculum?
    • What further training/ professional development would be useful?
  • Summary and next steps Professor Suzanne Benn UTS Business School
  • Thank you
    • Thankyou for sharing your insights
    • Please complete the evaluation form. Consider:
      • Are there any ‘ energy efficiency ’ related actions you plan to take following this seminar?
      • Can we follow up with you next year as part of our evaluation?
      • Please discuss with us any further ideas about embedding energy efficiency into your teaching and learning activities
  • Contact Details
    • Professor Suzanne Benn
    • Professor of Sustainable Enterprise
    • UTS Business School
    • Suzanne.Benn@uts.edu.au 
    • Ph +61 2 9514 3621
    • For further information and updates on the Leadership & Change for Energy Efficiency in Accounting & Management project go to:
    • http://www.business.uts.edu.au/energyefficiency
    •  
  • This presentation was prepared by:
    • Professor Suzanne Benn
    • Dr Paul Brown
    • Patrick Crittenden
    • Associate Professor David Brown
  • References
    • Bureau of Meteorology & CSIRO. 2010. "State of the Climate ".
    • Cooremans, C, 2011, Make it strategic! Financial investment logic is not enough, Energy Efficiency.
    • Dunstan, Chris, Katie Ross, and Nicole Ghiotto. 2011. "Barriers to Demand Management: A Survey of Stakeholder Perceptions." Prepared for the Australian Alliance to Save Energy by the Institute for Sustainable Futures, University of Technology, Sydney.
    • Geoscience Australia. 2010. "Australian Energy Resource Assessment." Commonwealth of Australia.
    • International Energy Agency. 2011. "World Energy Outlook ”.
    • Linfox Energy Efficiency Opportunities Public Report 2010. Accessed from www.linfox.com/~/media/Documents/PDF/Linfox_EEO%20Act%20PR%202010%20Appendix%20small.ashx
    • Porter, M. E., 1985, Competitive advantage. New York: Free.
    • Department of Resources, Energy and Tourism (RET). 2011. "Continuing opportunities. Energy Efficiency Opportunities program - 2010 report. A look at results for the EEO program 2006 - 2010." Australian Government Department of Resources, Energy & Tourism (RET) .
    • Department of Resources, Energy and Tourism (RET). 2008. Energy Savings Measurement Guide.
    • Sustainability Victoria. 2010. "Energy Efficiency Best Practice Guide Lighting. ”
    • The GPT Group Sustainability Report. Accessed 6/9/11 www.gpt.com.au/content.aspx?urlkey=Energy
    • Total Environment Centre. 2010. "Demand management and energy policy development: A case study of New South Wales. ”
    • World Business Council for Sustainable Development (WBCSD). 2004. "Facts and trends to 2050. ”
    • World Business Council for Sustainable Development (WBCSD). 2009. “Transforming the Market: Energy Efficiency in Buildings.”
    • World Economic Forum. 2010. "Energy Vision Update 2010. Towards a more energy efficiency world.".
    • Worrell, E., Laitner, J., Ruth, M., & Finman, H., 2003, Productivity benefits of industrial energy efficiency measures, Energy, 28(11), 1081–1098.