ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program
95
five per cent reduction for an applicant that consumes 1 168 000 kWh of
electricity per annum.
Total carbon savings over the life of the conservation measure
4.15 As
previously noted, indicator two as identified in the customer guidelines
was generated using the calculator. Advice provided to departmental
staff by the program management area of the department in February
2012 noted that total carbon savings were included as a second indicator
because: An
absolute measure means that large manufacturers won’t be penalised for making
small percentage improvements, as these small improvements can still yield
large carbon savings.
4.16 In
October 2014, the department provided further advice to ANAO that the
two indicators measured the short‐term and long‐term extent of the reduction
in carbon emissions intensity. Specifically: Indicator
1 provided a relative measure that demonstrated the immediate impact
of a project compared to the customerʹs existing manufacturing processes.
This was done by measuring the percentage reduction in emissions intensity
in the first year following project completion. Indicator
2 provided a more long‐term representation of the impacts of the reduction
in emissions intensity to be delivered by the project. This indicator was
based on Indicator 1, but further incorporated the effective life of the emissions
reduction measure and the manufacturerʹs expected production levels
during this period e.g. the next 10 years. This long‐term view was achieved
by representing the reduction in emissions intensity in terms of the carbon
savings over the life of the conservation measure. Where
a project involved electricity savings, Indicator 2 also accounted for the impact
of varying state and territory electricity emissions factors on the emissions
intensity reduction to be delivered by the project. This provided a more
complete picture of the emissions intensity reductions associated with each
project at a national level. Projects that reduced grid electricity consumption
from emissions‐intensive grids e.g. Victoria, with electricity generated
from brown coal were recognised as delivering higher reductions in
emissions intensity.
4.17 In
this respect, the reduction in carbon emissions intensity indicator reflected
the short‐term impacts of the project generally 12 months, while the total
carbon savings over the life of the conservation measure measured the longer
‐term impacts from 10 years to 100 years. By combining the two
ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program
96
indicators under the assessment of merit criterion one, the assessment of the
primary merit criterion was inconsistent with the policy proposal for the
programs. Specifically, the policy proposal identified that the programs were
designed to deliver ‘transitional, targeted assistance for manufacturing
companies’ that ‘will assist in achieving the objective of the carbon price by
helping these businesses to reduce their energy consumption in the short‐term
while remaining competitive in Australia’. The combination of the indicator
scores resulted in a score which reflected a mixture of short‐ and long‐term
benefits.
4.18 However,
as discussed in paragraph 4.5, indicator two was replaced, in assessing
applications against merit criterion one, by grant funds per tonne of carbon
abated, which is a relative cost‐effectiveness measure. In other grant programs
