Insulation program delivers on energy savings

IT MAY be one of the worst-run government programs in memory, but Kevin Rudd's botched insulation scheme did what it was designed to do.

Figures from the Australian Energy Market Operator show that gas demand in Victorian homes held steady during the 2010 winter, and energy economists believe a driving factor was the extra 279,344 homes insulated using taxpayer dollars.

In Victoria, where most homes are heated with gas, demand normally increases each year by 1-2 per cent.
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But when energy economists compared this winter with last winter, adjusting figures for the weather differences, they found virtually no change in the amount of gas used.

''We did see a much lower growth than we've observed historically,'' said Tony O'Dwyer, principal economist with consultants National Institute of Economic and Industry Research, which forecasts and analyses Victorian energy demand for the market operator.

Estimating the energy saved was difficult and there was some uncertainty, said Mr O'Dwyer, because of the program's reported problems, including homes not receiving insulation and others having it incorrectly fitted. But Mr O'Dwyer estimates Victorians saved 1 to 1.5 petajoules of energy. ''That's quite a lot,'' he said.

That figure assumes a 25 per cent saving in heating use and it has been revised downwards to take into account rorting and fraud. This amounts to about 3 per cent of residential gas consumption during the past winter.

Mr O'Dwyer said that while the program had an impact, it was never going to be large in Victoria compared with other states because about 87 per cent of households already had insulation.

In the 2009 winter, over June, July and August, Victorians used 54.9 petajoules of gas. This winter the figure was almost the same: 55.1 petajoules, normalised to take into account the cold winter.

Other, less significant, factors were also driving gas use down, said Mr O'Dwyer, including a drop in the use of gas to heat hot water (due to shorter showers, more efficient shower heads and more solar hot-water heaters), more efficient heating appliances, and standards to make new homes more energy-wise.
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