Urban environmental efficiency: Energy efficiency


Urban environmental efficiency refers to how well the built environment encourages the efficient use of natural resources—land, energy and water—and the re-use and/or recovery of waste. In this section, the changing ‘efficiency’ or ‘intensity’ over time is analysed, providing some context to the Increased consumption section.

Energy efficiency

The Pressures affecting the built environment section showed that energy consumption associated with the built environment has been mixed during the past few years (2010–11 to 2013–14), with an overall slight total increase (2.5 per cent). However, Australians are using energy more efficiently as energy prices rise, new technologies are adopted and our economy changes (DIS 2015).

Household energy use

Although Australian household energy use increased slightly overall between 2010–11 and 2013–14 (by less than 2 per cent; see Increased consumption), both per-person and per-household energy consumption have been decreasing steadily for several years (Figure BLT38). Since 2010–11, energy use per household has decreased by 4.1 per cent. During the same period, Australia’s population has increased by 5.2 per cent, and the number of Australian households has increased by 5.7 per cent (ABS 2016b).

However, although households were becoming more energy efficient, total household energy costs increased by 19 per cent between 2010–11 and 2013–14. Per-household electricity costs increased by 25 per cent (from $1446 to $1813 per household per year), per-household gas costs increased by 23 per cent (from $564 to $694 per household per year), and per-household petrol and diesel costs increased by 4 per cent (from $2696 to $2801 per household per year) (ABS 2016b).

Energy use per household is affected by a number of factors, including economic factors (increases in energy costs), technological factors (increase in take-up of photovoltaic and thermal solar energy generation), energy conservation measures (insulation and energy audits) and increased energy efficiency of household appliances. Structural changes also have an impact on households across a longer period (e.g. the household demographic structure towards more single-person households, and a slow shift towards smaller dwellings).

Detached houses have significantly higher energy costs per week than other types of dwellings. In 2012, the average energy cost was $109 per week for separate houses, whereas, for semidetached, row or terrace houses, or townhouses it was $70 per week, and for flats, units or apartments it was $59 per week (Figure BLT39). It should be noted that household sizes, compositions and energy-related behaviours are also likely to vary in accordance with dwelling characteristics (ABS 2013b).

In many homes, insulation is the most practical and cost-effective way to make a house more energy efficient, keeping it cooler in summer and warmer in winter, and saving up to 40 per cent in heating and cooling bills (Australian Government 2016). In 2014, most Australian households (68 per cent) had some form of insulation in their homes. In the Australian Capital Territory, 81 per cent of households had insulation, compared with 50 per cent of households in the Northern Territory. All states and territories (except the Australian Capital Territory) showed an increase in household insulation between 2002 and 2014, with the largest increase occurring in Queensland. The bulk of the increase in the proportion of households with insulation occurred between 2002 and 2011, with the proportion levelling off since then (Figure BLT40).

Another measure of energy efficiency in the household sector is household energy intensity. Overall, household energy intensity, measured by gigajoules used per million dollars of household final consumption expenditure, has been decreasing since the early 2000s (Figure BLT41). Between 2010–11 and 2013–14, household energy intensity decreased by 5.2 per cent, indicating a continued trend towards the decoupling of household consumption from energy use.

Renewable energy extracted by households increased by 46 per cent, from a low base of 33.6 gigajoules in 2002–03 to 49.2 gigajoules in 2013–14 (ABS 2016b). By 2014, 14 per cent of all households had solar panels. Including solar hot water heating, 1 in 5 (19 per cent) households are now using some form of solar power. This is as high as 43 per cent in the Northern Territory, and more than one-quarter of households in South Australia (27 per cent) and Western Australia (29 per cent) (ABS 2014a).

Growth in renewable energy generation capacity during the past decade has been largely driven by reductions in the cost of technology, and government subsidies to underpin the installation of local solar systems. Growth in renewables is likely to continue. Wind energy is the fastest growing renewable, having more than doubled generation capacity in Australia during the past 5 years (Infrastructure Australia 2016). Because solar energy has decreased significantly in cost, it is likely to continue to grow across Australia.

In parts of regional and remote Australia, energy networks need to service sparse populations spread across large areas. Accordingly, power delivery from large, centralised generation plants via extensive networks of ‘poles and wires’ is expensive and, in some cases, unfeasible (Infrastructure Australia 2016). New technologies have the potential to transform how energy is provided to these communities. It has become more cost-effective for towns to have standalone power systems (microgrids), with only a small connection to the main grid for back-up power, or to be disconnected completely. A microgrid is a local energy grid that connects homes, businesses and other buildings to a local energy source such as solar panels or wind power, together with battery storage (see Box BLT9) (Infrastructure Australia 2016).

Box BLT9 Small-scale renewable energy systems in remote Indigenous communities

Because of their location, remote Indigenous communities are not connected to the national electricity grid and usually have an independent electricity source. This has traditionally been standalone diesel or gas generators; however, the number of communities that have renewable energy systems has increased.

Although setting up renewable energy systems (such as solar power with battery storage) can have a high cost, this can be balanced by a significant saving in fuel expenses in the long term. In most remote areas, solar and batteries are now cheaper than diesel power (Green & Newman 2016). These savings can lead to other benefits to the community, such as local employment opportunities.

An example of a community that has benefited from this opportunity is the Munungurra community located near Tennant Creek in the Northern Territory. Many community members could not afford to live on Country because of the costs of diesel generation, so the Munungurra Aboriginal Corporation leased a solar power system. The savings in power costs and job creation have meant that more people can live in the community, and a school and other services were established.

Another project to promote renewable energy systems in remote communities is the Solar Energy Transformation Program (SETuP). SETuP involves a broadscale roll-out of solar electricity systems to 30 remote Indigenous communities in the Northern Territory from 2016. Nine megawatt solar systems will be integrated with existing diesel generation, saving 15 per cent on fuel costs, and a 1 megawatt system will be built at Nauiyu (Daly River), saving 50 per cent on fuel costs. Other benefits include less reliance on fuel deliveries, local employment, and cleaner, more reliable electricity generation.

Source: ARENA (2014)

Industrial energy use

The energy intensity of an industry is a measure of the energy consumed to produce 1 unit of economic output. The unit of measurement used in the following graph and commentary for each industry is gigajoules of energy consumed per million dollars of industry gross value added (GJ/$m IGVA).

Manufacturing is a relatively energy-intensive industry (9695 GJ/$m IGVA in 2013–14), and its energy intensity showed a small increase (less than 2 per cent) from 2010–11 to 2013–14. In comparison, commercial and services industries have relatively low energy intensity (537 GJ/$m IGVA in 2013–14), and decreased their energy intensity by around 1 per cent during the same period. Road transport (industry, excluding household transport) remains energy intensive (10,330 GJ/$m IGVA in 2013–14) and has increased in energy intensity by 9 per cent since 2010–11 (Figure BLT42).

The use of energy within commercial buildings is highlighted in Box BLT10.

Box BLT10 Commercial buildings and energy efficiency

The total energy consumption of commercial buildings in Australia was approximately 135 petajoules in 2009, representing around 3.5 per cent of the 3907 petajoules of gross final energy consumption in Australia in that year. The energy intensity per square metre of commercial buildings decreased by an average of only 0.3 per cent per year between 2002–03 and 2010–11, driven by a small number of market leaders and the capture of ‘low-hanging fruit’ in other buildings (ACIL Allen Consulting 2015).

The Commercial Building Disclosure (CBD) Program was introduced in 2010 and fully implemented in 2011 as part of a combination of measures used to drive energy efficiency improvements in commercial buildings. The program, which was managed by the Australian Government Department of Climate Change and Energy Efficiency, requires building owners to disclose information about the energy efficiency of large commercial office floor spaces (2000 square metres or more) at the time of sale, lease or sublease. An estimated total of 5000 buildings with approximately 26 million square metres of net lettable area, housing 1 million office workers, are expected to be covered by the scheme (ACIL Allen Consulting 2015).

The resulting improvements in base building energy performance, as measured by the National Australian Built Environment Rating System (NABERS), have enabled the program to achieve cumulative cost benefits in excess of $44 million between 2010 and 2014 (Table BLT15). The benefits include a reduction in end-use energy consumption of 10,020 terajoules and a reduction in greenhouse gas emissions of 2051 kilotonnes of carbon dioxide equivalent for 2010–23.

By 2011–12 (after the introduction of the CBD Program), NABERS ratings showed average emissions reductions of 9 per cent for more than 620 buildings (ACIL Allen Consulting 2015).

Table BLT15 Benefits of the Commercial Building Disclosure Program, 2010–14


Economic benefits, excluding GHG reductions

(NPV $m)

Economic benefits, including GHG reductions

(NPV $m)

Reduction in end-use energy consumption


Reduction in GHG emissions


Net benefits to date





$m = million dollars; GHG = greenhouse gas; ktCO2-e = kilotonnes of carbon dioxide equivalent; NPV = net present value; TJ = terajoule

Source: ACIL Allen Consulting (2015)

Coleman S (2016). Built environment: Urban environmental efficiency: Energy efficiency. In: Australia state of the environment 2016, Australian Government Department of the Environment and Energy, Canberra, https://soe.environment.gov.au/theme/built-environment/topic/2016/urban-environmental-efficiency-energy-efficiency, DOI 10.4226/94/58b65a5037ed8