In-School Productivity Campaign | The Importance of Energy Productivity

Imagine a significant increase in your electricity bill for six consecutive months. Your natural instinct would be to figure out ways to save energy in order to reduce your bill. You have decided that the best option is to change all incandescent light bulbs in your home to LED. After changing to LED, you succeed in reducing your energy bill by 20 per cent. By doing this, you are taking a step towards energy efficiency.

In recent years, Jamaica has made noteworthy strides in areas of energy efficiency and renewable energy. This was achieved through energy partnerships with the government and multilaterals. As at October 2016, Minister of Science Energy and Technology Dr Andrew Wheatley reported that the Government has realised savings of some J$131.5 million through the Energy Efficiency and Conservation Programme. The private sector also embraced energy efficiency, which improved their bottom line.

Former CEO of the Jamaica Public Service Company (JPSCo), Kelly Tomblin, in a December 2016 Gleaner article, stated that CHENACT energy audit studies revealed that hotels could save as much as 24 per cent or 107 Gigawatt-hour (GWh) of the 446 GWh of energy the sector consumes annually. This amounts to roughly US$21 million assuming the hotel industry spends approximately US$0.20 per Kilowatt-hour (kWh).

JPSCo, in its 2016 annual report, disclosed that its revenue declined from an average of 36.44 US cents per kWh in 2012 to 22.40 US cents in 2016. This implies that the cost per kWh to the consumer is less, and can be linked to energy diversification projects by the company, such as an upgrade to the Bogue power plant to use liquefied natural gas as well as several additions of increased generating capacity from renewable energy.

The concept of productivity challenges us to eliminate waste by not only doing things right, which is efficiency, but to also do the right things, which is effectiveness. As a country, we have demonstrated that we recognise the importance of energy efficiency; however, there is still the need for 'next level efforts' in order to see sustained improvements in energy use which will positively impact economic growth and development. If Jamaica has seen such gains - as mentioned above - through energy efficiency, then the potential benefits and profit from exploring energy productivity should be substantial.

Let's go back to the example of reducing our household electricity bill. Yes, we have seen savings each month by changing out our incandescent bulbs to LED, BUT are we making the best use of our energy? While energy efficiency asks, 'how can we reduce our light bill?' Energy productivity is not achieved until you introduce the effectiveness component. This pushes us after we have achieved the reduction in the bill to question, 'What are you using your light to do?' Having the lights on when watching TV and leaving the lights on in a room that is not being used are both examples of waste.

Energy productivity takes into account not just our efforts towards energy efficiency, but it bids us to ensure that we are maximising the use of every unit of energy consumed.

An article published by The Climate Group asserts that the concept of energy productivity aligns energy efficiency more directly with business growth and development. Energy productivity utilises energy efficiency as a solid platform to catapult into the next level of efficiency gains. It all boils down to maximising each unit of energy for greater economic output - or doing more with less.

Projections by the Alliance to Save Energy suggest that doubling energy productivity by 2030 in the United States of America could lead to savings of as much as US$327 billion, which equates to an estimated US$1,004 per person in energy savings annually. This could also result in creating 1.3 million jobs in the US economy, while reducing carbon emission by approximately 33 per cent. In our Jamaican context, US$327 billion may seem to be an exorbitant and ambitious projection. However, the economic benefits should rivet in our minds the far-reaching impact that energy productivity could have on our lives and, by extension, our country.

The Global Alliance for energy productivity looks at four powerful benefits that can be derived from energy productivity:

 

1. Economic Growth

 

Improving energy productivity allows countries and businesses to increase value added per unit of energy used (barrel of oil equivalent). This means that if energy productivity were doubled, this would translate into twice as much economic output per unit of energy used. According to the International Energy Agency (IEA), energy productivity improvements could generate an additional US$18 trillion in global savings between 2012 and 2035.

 

2. Significant Monetary Savings

 

Real financial savings is transferred to households and businesses when energy productivity is improved. The IEA suggests that each consumer could save as much as US$2,227 in energy expenditure with available energy efficiency-improvement technologies between 2012 and 2035.

 

3. Greenhouse Gas Reductions

 

Energy productivity has a part to play in controlling greenhouse gas emissions. The IEA states that up to 6.5 gigatonnes of carbon dioxide emissions could be avoided if existing efficient technology are put to use worldwide. Such investments, if made across all sectors, would enable energy to be used as productively as possible.

 

4. Improved Energy Security

 

Improving energy productivity enables countries to reduce imported energy. According to the Ministry of Science, Energy and Technology, Jamaica imports approximately 90 per cent of energy in the form of petroleum used for electricity generation. Improving energy productivity could lead to reductions in the amount of imported energy.

The IEA points out that global energy use is set to increase by one-third by 2040. For this reason and others, government and business decision-makers globally have the responsibility to lead the charge to enhance energy productivity. This includes the formulation of policies with the requisite support systems that will ensure optimal energy use and its sustainability.

Productivity is everybody's business and each individual has a role to play in ensuring that society uses energy efficiently and effectively.

- Jonathan Isaacs is a productivity specialist at the Jamaica Productivity Centre