Australia Has $10 Billion Opportunity in HVACR Savings 1

Wednesday, March 18th, 2015
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Australia could save as much as $10 billion per year through a more integrated approach to HVACR systems, an industry leader says.

Australian Refrigeration Association president Tim Edwards said an integrated approach toward heating, ventilation, air-conditioning and refrigeration (HVACR) involving not just vapour compression but also heat load management, energy reporting and control could allow Australia to reduce GHG emissions by half, national energy emissions by seven per cent and the overall costs of HVACR by as much as 70 per cent or $10 billion per annum.

He said a number of challenges stand in the way, however, including an excessive focus on initial cost, a lack of visibility and awareness about the importance of HCAVR and a fundamental lack of integration across the HVACR sector.

First off is the focus on initial cost. Edwards says insufficient consideration is given to operating and life cycle costs when designing and installing systems – a phenomenon he says was particularly acute half a decade ago when energy prices were cheap but is still prevalent in the current climate.

“When I do an analysis as a facilities manager or an energy savings consultant or architect and I specify the integrated system, I need to look at its lifecycle cost,” Edwards said. “[But] typically, what happens in the industry is that what I do is I minimise the capital cost and the operating cost be dammed.”

Another problem, he says, is the lack of visibility with regard to HVACR sector and the lack of awareness of its importance. This is a significant problem in an industry involving around 20,000 firms and 70,000 tradesmen, and one which consumes 23 per cent of the electricity generated nationally and 14 per cent of national carbon emissions.

He notes the biggest challenge – and one which is not unique to Australia – revolves around a siloed approach whereby tradespeople focus predominately on their individual area and specifiers are often not sufficiently informed about HVACR to drive the push for an integrated solution.

“What you have in Australia and in fact worldwide is that in Australia there are 20,000 firms that deliver HVARC solutions and 70,000 tradesmen,” Edwards said. “Those organisations operate in silos – ‘I do commercial and supermarket refrigeration’ or ‘I do display cabinets’ or ‘I do splits’ and so on.

“But you don’t almost ever find the guy who does windows and splits – that’s the job of the specifier, who is the one who says ‘Ok, the way we are going to design or retrofit this building is we are going to minimise the heat load, we are going to measure the energy consumption by appliance and we are going to optimise the efficiency of the mechanical devices’.

“But specifiers in Australia and worldwide are not typically well informed about HVACR. So what do they do? They’ve got a mate who’s a contractor. And they phone up their mate and they get a non-integrated solution.  So the whole system breaks down from an energy efficiency point of view.”

Edwards’ comments follow the January release by consultants pitt&sherry of a scathing report into building industry compliance with regard to overall energy efficiency standards within Australia. That report talked of an endemic phenomenon of non-compliance with regard to energy performance criteria and a ‘culture of sign-offs’ throughout the entire length of the supply chain.

The comments also come amid a broader context of a changing regulatory environment in which synthetic refrigerants, for example, are being phased out under national regulations and international frameworks such as the Montreal Protocol on Substances that Deplete the Ozone Layer.

Edwards says the significance of this cannot be understated, and that Australia is going to have to replace around $100 billion worth of equipment over the next fifteen years.

“Right now, worldwide, we have a very rapidly moving situation where we are going to see the phase down of HFC refrigerants,” he said.

“What we are going to see is the shift to low global warming refrigerants. When you make that shift, all the equipment has to change. There is almost no drop-in solution. So the vast majority of $100 billion worth of equipment is going to get replaced over the next 15 years.”

“When that happens, it’s just so important that it’s done in the way that it is integrated, so that you get both the most financially efficient system in operating terms as well as the most efficient system in emissions terms.

“That, by the way, is by using natural refrigerants.”

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  1. Stefan Jensen

    So why did the current Federal Government remove the carbon equivalent HFC levy around August 2014? This was designed to reduce HFC consumption and prepare Australia for the transition to low GWP refrigerants.

    Australia has committed itself internationally to participation in a global HFC phase-down once agreed by the signatories to the Montreal Protocol. Julie Bishop made that commitment 23 September 2014 in New York.

    Removal of the HFC levy while at the same time committing Australia to an HFC phase-down appears inconsistent.

    What alternative HFC phase-down mechanisms does the Federal Government propose to put in place in lieu of the carbon equivalent HFC levy that it abolished?