The Ai Group report Energy shock: Pressure Mounts for Efficiency Action surveyed more than 300 businesses about their use of energy, their management of electricity costs, their energy efficient practices and their views on related government policies.

AI Group has recommended governments engage more closely with industry in the design, implementation of energy efficiency policies.

It also recommends governments investigate business responses to changing energy prices to determine whether they were impacting on competitiveness.

Ai Group CEO Innes Willox said the organisation's previous research showed that in the five years to 2010 two-thirds of businesses made no or negligible improvements in their energy efficiency.

However, he said in the latest report the situation has been reversed.

"In the three years to 2012 two-thirds of businesses have achieved improved efficiency performance," he said.

"Three quarters of respondents have now taken or are planning actions to improve energy efficiency."

But he said the actions tended to involve investigation or modest investment, which would limit the results.

While the number of businesses planning to improve their energy efficiency had increased, energy prices had risen substantially.

Willox said energy expenditure as a percentage of turnover had risen by 10% between 2008 and 2011 but were expected to rise by 3% between 2010 and 2013.

"Regulators project that retail electricity prices for small users will have risen 37% between 2010 and 2013, with the two biggest factors being network costs which added 15% and carbon pricing which contributed with 8%," he said.

This suggests the business spend on energy will grow in both absolute and relative importance (currently 46% spend less than 1% of turnover on energy, 27% spend 1-2%, and 26% spend more than 2%).

Willox acknowledged that rising energy costs had driven many businesses to improve their efficiency.

"Most respondents described energy costs as a major expense. This appears to have been a catalyst for action by businesses to improve their efficiency, although most businesses will need to do more to blunt the impacts of rising energy costs."

Full report is here: http://www.aigroup.com.au/policy/reports

This article courtesy of BEN-Global