Could Australia’s energy crisis be the catalyst for long term cost savings?

Subscribe to our newsletter

* *

 

The energy landscape in Australia has changed forever, and for manufacturers, it’s time to reimagine the way modern plants are powered and embrace a future with greater control over energy costs. With the political and media frenzy surrounding this issue, you’d be forgiven for thinking it’s all doom and gloom. However Out Performers Chairman Duncan Stone takes a different view. Here he injects some level-headed logic into the debate, and explains how operators who understand the long-term game and act accordingly now, could actually position themselves for cheaper energy in the long run.

Australia’s energy crisis is a hot topic, and justifiably so. The energy price genie is well and truly out of the bottle, and showing no signs of retreating in the foreseeable future.

Yet when we look beyond the political blame game and sensationalist headlines, a more positive picture begins to emerge. Yes, there are difficult and unprecedented times ahead for energy management in Australia. But could the current challenges offer solid long-term opportunities for those willing to re-think their energy use, and take prioritised action?

Let’s take a clear-eyed look at how manufacturing businesses can not only survive, but thrive in Australia’s brave new energy world.

So exactly what has changed?


• Prices for solar PV generation on site have reduced by half to less than 8c/kWh
• Electricity prices have doubled and even new base load coal will not be cheap, meaning grid electricity prices will remain above 10c/kWh over the long term
• Gas prices have tripled and with the huge demand for our gas from Asia, prices are unlikely to reduce any time soon
• Batteries are following the price reduction curve of PV and in 3-5 years, big systems will be easily affordable

The big opportunity for manufacturers


Over the next 3-10 years, it’s likely manufacturers will be able to generate and store a substantial proportion of their energy requirement on site with solar and batteries, or contract directly with renewable generators through a corporate PPA.

While solar PV is currently lower than what you are paying right now, the solar/battery combination is likely to be at grid parity soon, but with the security of knowing your business won’t be impacted by further price rises.

So how do manufacturers transition from their current energy approach and take advantage of this opportunity?

By embracing a new mindset around energy, and taking prioritised action.

A staged approach for managing the transition


Here are seven key actions that can help your operation thrive in the changing energy landscape. Knowing these, and when to implement them, will make a significant difference to your energy costs over the next five years and beyond.

DO NOW:

1. Implement energy system data analytics to monitor energy use. This will help drive energy efficiency outcomes, allow effective design of PV and battery systems, manage peak demand profiles, and drive behavioural change to improve energy performance.


2. Implement as many energy efficiency measures as possible to reduce your dependence on energy and the need to buy more PV. Your immediate focus should be on anything with a payback of less than 3 years.


3. Install as much solar PV as you can now, given the possibility of the RET closing to new entrants in 2020. The RET offsets up to 30% of solar PV costs. If you start now, you will have a system installed within 18 months to take advantage of the RET.


4. Look at solar thermal or heat pumps to pre-heat water and reduce reliance on gas.


OVER THE NEXT 3 YEARS:

5. Install a small battery system powered by your PV to shave peak demand events and reduce peak demand charges.


6. Convert existing gas-fired process heat systems to renewable sources as they become viable, including biogas, electricity that can be powered by PV or solar thermal.


THE LONG-TERM GOAL:

7. Eventually build or secure access to enough of your own PV generation tobe in control of your energy costs forever and keep costs below what they are today.

 

 

These are big changes and a different way of thinking, but to remain competitive you need to start now. Having high quality energy data and rigorous processes for understanding and managing energy will ensure the future energy security of your business. Act now.


Duncan Stone is the Founder and Chairman of Out Performers

He has more than 25 years’ experience in the environmental, energy efficiency, and engineering fields with high-level expertise in energy measurement and verification. For help charting your organisation’s path through the energy crisis, contact Duncan on (02) 8094 1742 or duncan.stone@outperformers.com.au