What is energy productivity?

Energy productivity is a term to describe using the same or less energy to do more. As it is commonly confused with energy efficiency, here’s a simple way to differentiate:

Energy efficiency = Using less energy. This includes simply using less power (eg turning off lights in empty rooms), and installing equipment that uses less energy to perform the same task.

Energy productivity = Doing more, using the same or less energy. Not only are you likely to use less energy, you make the energy you do use work harder and you waste less. In other words, it’s a bit like eating less, burning what you do eat more efficiently, then going further on what you did eat.

For a company, energy productivity is calculated by dividing total revenue ($) by total energy used (GJ). The higher the number, the better a company’s energy productivity. Better energy productivity can save money, save effort, reduce waste (that includes reducing pollution) - and the business can make more money from the energy it puts in. 

A country’s energy productivity is worked out by dividing the total value of its goods and services (its GDP), by the total amount of energy allocated to produce those goods and services. Again, the higher the country’s energy productivity rating, the better.

Who should know about energy productivity?

The measure is probably most helpful to businesses (ranging from manufacturers to industrial companies, utilities and corporates), governments and countries - sometimes measured as economy-wide energy productivity.

What does energy productivity look like?

At a national level, we can improve our energy productivity through things like switching from old fossil fuel generation to more efficient technologies, adopting innovative work practices and improving the efficiency of equipment and processes. When you consider Australians spent $120 billion on energy in  2011-12 (a 67% increase from 2001-02), the benefits of improvement are obvious.

Companies also have many ways they can become more energy productive. For example, energy intensive airlines could make improvements such as interior weight reduction, route optimisation and engine washing. Steel companies can explore reusing waste gases, improved monitoring and process control and waste heat recovery. Many such improvements are low cost or offer short payback periods.

Why improve energy productivity?

There are lots of potential benefits to improving energy productivity, for businesses and governments:

  • Reduce energy bills
  • Reduce greenhouse gas emissions for a healthier environment and an effective contribution to national emissions reduction commitments
  • Boost company competitiveness and increase profits 
  • Boost production
  • Increase uptake of renewable energy (which offers many of its own benefits, from pollution reduction to clean energy  investment and new employment opportunities)
  • Reduce waste (let’s face it, that can only be a good thing)
  • Improve energy security (e.g. by reducing demand or moving away from fossil fuels)
  • Improve resilience to energy prices or revenue changes 

For a more detailed explanation of these benefits, see ClimateWorks’ report Australia’s Energy Productivity Potential.

Australia’s energy productivity 

Improving energy productivity can help increase a country’s overall national productivity.

Australia currently lags behind both developed and developing G20 countries on this score but we’re  moving to catch up. 

In April 2015, the Australian government released an Energy White Paper which included a focus on improving energy productivity.

In December 2015, Federal and state governments worked together as the COAG Energy Council to release - The National Energy Productivity Plan 2015-2030 to improve the value Australia gets from its investment in energy by 40% over 15 years.

In May 2016, ClimateWorks Australia launched the world’s first tools to measure the energy productivity of listed industrial companies. Tools includes a guide for investors, six sector summary sheets and a do-it-yourself factsheet so investors and companies can assess a company’s energy productivity themselves. To learn more about this analysis and how it might help your work, contact wei.sue@climateworksaustralia.org