Unlocking a reduction in energy demand

Insulation

By James Bedford Product Portfolio Manager, Knauf Insulation

Changing the way households pursue energy savings will reduce the requirement for energy generation

In order to achieve ambitious 2050 net zero carbon targets, it is essential for both Federal and State governments to address the demand side of energy efficiency with similar focus and investment that is currently dedicated to the supply side of the market.

Over the last 20 years, many countries have implemented successful initiatives to improve energy efficiency in buildings, and recently many governments have further prioritised energy efficiency in buildings as a rebound mechanism out of the economic challenges caused by the COVID-19 global pandemic. Improving the energy efficiency of buildings is not only a jobs multiplier but also delivers positive health outcomes, environmental outcomes and supply chain benefits by reducing peak load on the power grid.

The Australian Department of Industry, Science, Energy and Resources identifies Australian households as being directly responsible for 20% of Australia’s greenhouse gas emissions. Initial data from smart metering technology in the EU suggests that the renovation of 400,000 homes, focusing on improving the thermal resistance of the external building envelope, would reduce demand by 2,000 gigawatt hours per year.

Further European studies have shown that slightly improving the thermal resistance of the external envelope of a house can reduce household power usage by up to 70%, highlighting why insulation is the low-hanging fruit of energy efficiency upgrades. To provide a sense of the opportunity in Australia, a pitt & sherry report has estimated that between 800,000 and 1.4 million homes do not have ceiling insulation, and even more do not have wall insulation. The opportunity is even bigger when you consider that this excludes underinsulated homes.

With unemployment in Australia reaching a 20-year high and the expiration of JobKeeper looming as a complicated labour participation barrier, opening up the retrofit jobs machine is a logical win-win for the environment and the economy. It is estimated that energyefficiency upgrades to the exterior envelope of houses could produce 15 jobs for every million dollars of investment, compared, for example, with wind generation which produces only 1.8 jobs for the same level of investment.

The Victorian Government demonstrated leadership in this space, announcing a $797 million investment into a ‘Household Energy Efficiency Package’. This initiative was highly welcomed by industry, with the CEO of the Energy Efficiency Council Luke Menzel reflecting on the economic opportunities in a press release: “We know that energy efficiency upgrades of buildings have the biggest jobs multiplier of any form of clean-energy stimulus. Victoria is harnessing that jobs multiplier to supercharge their post-COVID recovery, create thousands of good, local jobs and cut carbon along the way.”

Consumer spending has dramatically shifted towards home improvement, with retail giant Bunnings gaining 13.9% growth over the last financial year, with most of the growth coming from the second half of the year following pandemic restrictions – resulting in store-on-store sales growth of 25.8%. Most home improvement retailers sell retrofit products for DIYers, including insulation, draught sealing and energyefficient appliances, such as heating and hot water systems.

The renovation wave and uptake in DIY projects has been a global phenomenon not limited to Australia, however, it is the tip of the iceberg if we are to comprehensively reduce greenhouse emissions. In a study commissioned by EURIMA (European Insulation Manufacturers Association) it was estimated that the rate of renovation must be tripled from 1% to 3% if the EU is to achieve net zero.

It is estimated that energy efficiency upgrades to the exterior envelope of houses could produce 15 jobs for every million dollars of investment.

Commitments made by the Australian Government in 2020 have been a positive step in the right direction – and in many ways are catching up to the existing enthusiasm of homeowners who already see the value in retrofitting for both the health and energy savings benefits. The greatest opportunity to effect emission reduction, create jobs and deliver health outcomes in the home in 2021 and beyond is through the integration of energy efficiency in buildings into policy framework.

About us

Knauf Insulation is part of the Knauf Group of Companies, a global leader in the manufacture of building products. In Australia, Knauf Insulation has been supplying glasswool since 2010. Knauf Insulation has a successful track record in the creation of research and development programs that have significantly increased production efficiencies and sustainability in the global insulation industry. Knauf Insulation is also active in the development of products and systems for buildings that are customised for regulations in each country, including the support of energy efficiency and sustainability.