Bulletin

Affordable, reliable, low carbon energy services requires transformation in energy productivity

26 Jul 2017

By Jonathan Jutsen, Chairman, Australian Alliance for Energy Productivity

The operation of a modern society is totally dependent on energy – we only have to consider the chaos caused by a blackout to recognise that truth.  The services our society needs all require energy for their delivery – these services include nutrition, clean water, shelter/comfort, education, health, defence/security, connectivity (passengers and freight) and community/entertainment services.

We can meet the challenges we face to deliver these services reliably, affordably and generating little or no carbon. But, to achieve this, we need to accelerate innovation in energy application to transform the delivery of these services, so that they require far less energy (much higher energy productivity), and the energy that is used is renewable.

This means that we must massively accelerate change in the way we use energy through new technology and new business models (often enabled by packaging multiple technology advances). We are not going to be able to decarbonise the global economy through incremental energy savings measures, and we won't get there by being timid.

What is required are new approaches and new language. We need to be talking about transformation - meaning metamorphosis, radical change, and renewal - rather than improvement. And we need to be talking about achieving step changes in ‘energy productivity’ (the value we get from each unit of energy applied), which addresses energy effectiveness and efficiency, rather than just increasing energy efficiency.  

This transformation will deliver improved economic outcomes, generate investment in productive assets, reduce consumer costs, and decarbonise the economy.

In an attempt to define the main opportunities to improve energy productivity (EP) through innovation, the Australian Alliance for Energy Productivity (A2EP) developed a value chain methodology to systematically assess the major EP opportunities through innovation. For each end service needed by society, e.g. nutrition (or food), we examine the value chain starting from defining the real consumer need and then working all the way to back to the origination (in this case the farm). At each stage we identify the core functions needed to deliver this service that use significant amount of energy. For nutrition, for example, the core processes include preservation (often provided through refrigeration - energy intensively), cooking, dewatering, and freight transport. We then examine how we can apply energy more effectively to deliver these processes through application of new technologies and business models.

We use this analysis to define priority, transformative changes in energy productivity. Below are some examples from the nutrition value chain. We examined transforming food preservation through replacing/avoiding refrigeration, and where refrigeration is needed, optimising its application. One new business model being examined is the application of 'internet of things (IOT)' and cloud computing to allow real time condition monitoring of food from farm to plate - to cut food waste, improve food quality and drive enhanced application of refrigeration. We conducted a pre-feasibility study, engaging some 40 research and business organisations and government, which concluded that this business model is probably within a year of being feasible and cost effective in Australia, creating potentially AUD 1-2 billion a year of value and over AUD 100 million of annual energy savings. We were able to engage this strong stakeholder group because of our focus on value as well as energy performance, which gave us strong alignment in objectives.

Another transformation examined was replacement of boilers, steam systems and in some cases thermal food processing with more effective electric technologies, e.g. dewatering using mechanical/membrane processes, high pressure processing and heat pumps to recover waste heat streams (including latent heat from drier exhaust). We demonstrated that by transforming industry from using steam - Industry 1.0 - to electro-technologies, offering better accuracy/controllability, reliability, lower maintenance, and potential to optimise using AI and cheap comprehensive process monitoring using IOT - we can transform to gain the productivity benefits of Industry 4.0. And of course, these electro-technologies can be supplied by solar PV.

Our value chain methodology seeks to investigate both energy and material flows using a circular economy approach because you can’t separate out energy and materials optimisation. For example, the 40% waste of food in the value chain - including massive waste of food in the home (over AUD 2000 a year per family in Australia)- results in massive embedded energy waste, including from the fertilisers used to grow the food and all the direct energy inputs along the chain.

These are examples of transformative change: We can’t just seek to make refrigerated trucks more efficient - we need to look at transforming and optimising the entire cold chain. And we can’t just seek to improve the efficiency of boilers and fix steam systems, as these incremental approaches have failed to deliver business productivity improvement or large, lasting energy benefits. In contrast, the transformations we seek can greatly improve business competitiveness, energy outcomes and emissions.

A2EP would like to greatly accelerate our work and innovation in energy productivity. What we all must do however is to collaborate globally to change the focus from incremental energy efficiency improvements to transformative change in energy productivity.

 

Mr. Jonathan Jutsen is the Chairman of The Australian Alliance for Energy Productivity (A2EP - formerly the Australian Alliance to Save Energy), the core mission of which is to double Australia's energy productivity by 2030. He is a leader in energy and carbon management and has provided advice to executive teams and governments in Australia, USA, UK and South East Asia. Mr. Jutsen is a member of the Board of ARENA, the Australian Renewable Energy Agency, and is on the NSW Climate Change Council. He was selected one of the ‘100 Most Influential Engineers in Australia’ and is a Fellow of the Academy of Technological Science and Engineering.