!

The views expressed in this IEA Insights Paper do not necessarily reflect the views or policy of the International Energy Agency (IEA)

Secretariat or of its individual member countries. This paper is a work in progress and/or is produced in parallel with or

contributing to other IEA work or formal publication; comments are welcome, directed to Grayson.heffner@iea.org.

©!OECD/IEA,!2013!

©OECD/IEA

2012

Energy!Provider"Delivered!

Energy!Efficiency!!

A!global!stock"taking!!

based!on!case!studies!

Grayson!C.!Heffner,!International!Energy!Agency!

Peter!du!Pont,!Greg!Rybka,!Carina!Paton,!and!Lynn!Roy,!Nexant,!Inc.!

Dilip!Limaye,!SRC!Global!Incorporated!

© OECD/IEA 2013 Energy Provider!Delivered Energy Efficiency

A global stock!taking based on case studies

Page | 107

Origin Energy

Table 36 • Energy Savings Guarantee Programme

City, country, region Australia

Programme type Advice and assistance, on!bill financing

Program tenure Ongoing since 2011

Sector focus Commercial and industrial, public sector.

Technology focus All

Encourage business investment in energy efficiency and clean technology,

while contributing to Origin Energy’s energy efficiency obligation.

Budget AUD 12.7 million (2011!2013)

Investment cost of <USD 23/tCO2e

Savings Annual savings:

Contact information Daniel Trujillo (Origin Energy): Tel. +61 3 9821 8028,

Daniel.trujillo@originenergy.com.au

Paul Greenop(LCAL): Tel. +61 7 3188 1643,

Paul.Greenop@lowcarbonaustralia.com.au.

Reference http://www.lowcarbonaustralia.com.au/media/13545/origin_factsheet.pdf

Summary and background

Origin Energy and Low Carbon Australia (LCAL) established a strategic alliance to make it easier

and more cost effective for businesses across Australia to finance and implement their EE

projects. Origin provides an end!to!end service, adding value to their business customers and

improving their ability to acquire new customers and retain old ones. LCAL provides the financial

support and repayment model while Origin is a strong brand partner with good access to

business customers as well as markets and distribution channels.

The Energy Savings Guarantee (ESG) programme features on!bill financing. Origin structures the

terms so that payment are offset by energy savings, thus providing energy bill stability and

eliminating the need for businesses to raise the upfront capital for energy efficiency investments.

Programme description

The strategic alliance between Origin and LCAL provides accessible project financing to Origin’s

business customers. The programme provides end!to!end project support, including energy

audits and project identification, structured repayment terms offset by energy savings, provision

of project financing from LCAL and repayment through the Origin Energy’s billing system, and

provision of expertise and support needed to deliver the project.

Energy Provider!Delivered Energy Efficiency © OECD/IEA 2013

A global stock!taking based on case studies

Page | 108

Origin applies a simple 5!step delivery process: 1) assess a candidate organization’s objectives

and suitability; 2) perform on!site assessments; 3) provide detailed energy savings reports,

quantifying costs and savings in kWh and CO2; 4) implement energy saving measures which can

be guaranteed within ±20%; and 5) deliver a complete M&V report to verify the savings.

LCAL provides a credit line to Origin to on!lend to businesses, adding its own EE experience and

expertise. Meanwhile, Origin offers business customers a full service model for delivering EE

solutions, with end!to!end project management, zero upfront cost, and an energy savings

guarantee. This means the monthly cost to business customers is offset by energy savings, with

no net increase in their energy bill and no risk to the business customer. In some cases,

customers achieve a cost reduction in their energy bill even while repaying the loan from LCAL.

This programme is marketed to Origin’s existing and prospective commercial and industrial

customers with a minimum annual energy consumption of 160 MWh.

Regulatory and market drivers

Given the introduction of a price on carbon in Australia, and existing state and federal reporting

schemes, EE has become a near necessity for a business’s economic viability. Other regulatory

drivers include the Energy Savings Opportunities Programme managed by Department of

Resources, Energy and Tourism (DRET) and the state energy efficiency obligations schemes in

New South Wales, Victoria, and South Australia.

Energy savings from the ESG can be accredited for sale in the Energy Savings Certificates (ESC)

market. Origin Energy and LCAL support participating customers to generate ESCs for projects

delivered but the participating customer, not Origin Energy, owns these ESCs. Depending on the

circumstances and the project, Origin Energy might buy the ESCs generated from the

participating customer, but this is a separate transaction from the project itself. In other cases

the ESCs are left with the participating customer to trade directly with market intermediaries.

Lessons learned

Customer decision!making can be very time!consuming. Decisions often require multiple

decision!makers to buy in to the project. Even with an internal champion, competing

priorities within the business and unclear mandates may delay or even halt a project.

EE must constantly compete with other priorities for budget and management attention.

Customer education is needed to emphasize the value of EE, especially given increasing

energy costs and regulations. Targeted marketing campaigns regarding EE finance options

and other government incentives have strengthened the overall Origin value proposition.

The Energy Saving Guarantee is very attractive to customers that have deferred EE projects

due to lack of funding or lack of expertise to deliver. Customers with the capacity and

capability to implement projects themselves may prefer to self!fund activities.

The EE industry is burgeoning in Australia, but there is sometimes spotty product quality

and expertise. In response Origin has built a network of trusted, experienced partners and

suppliers in the most common EE areas.