Boosting Business Efficiency: A Guide to Energy Savings in Commercial Facilities

With Australian electricity and gas prices continuing to rise, improving energy efficiency is crucial for every business to control costs and maximise profits. While residential efficiency tends to get more focus, commercial facilities offer even greater potential for impactful energy savings through upgrades, improved operations and more. Read on for expert tips to boost efficiency in your commercial spaces.

Key Takeaways:

Start with an Energy Audit

A detailed energy audit by qualified professionals identifies savings opportunities unique to your facilities. It benchmarks current usage and pinpoints areas for efficiency gains in lighting, HVAC, appliances, building envelope and more. Audits also screen potential for renewables. Use audit findings to create a focused efficiency plan.

Upgrade Aging Building Systems

Much of the energy savings in commercial retrofits comes from upgrading legacy systems to current high-efficiency models:

HVAC - Old units operate at 60-80% efficiency versus 90%+ for modern variable speed HVAC. Right-size and optimise equipment selection.

Lighting - LEDs consume 50-70% less energy than halogens and CFLs with superior lifespan and light quality.

Building Automation - Energy management systems automate temperature, lighting and other controls based on occupancy patterns for efficiency.

Windows - New double/triple-paned windows with Low-E coatings significantly reduce heating and cooling losses.

Insulation - Boost roof and wall insulation to current code levels or higher to prevent energy waste.

Water Heaters - Tankless on-demand models provide endless hot water without standby losses.

Enforce Energy Policies and Change Behaviours

Simple low-cost tactics also improve efficiency:

Maintain Equipment for Peak Efficiency

Preventative maintenance keeps equipment running optimally:

Work With Energy Consultants

Engaging experts provides outside perspective on savings:

Conclusion

Improving energy savings in commercial facilities requires tapping specialised expertise while engaging staff through training and incentives. By treating efficiency as an ongoing profit-boosting initiative, Australian businesses can continuously enhance their bottom line.

With rising energy costs eating into margins, commercial efficiency helps Australian businesses maximise profitability. Optimising building systems, changing staff behaviours and engaging consultants to identify savings opportunities are key steps. Treating energy efficiency as an ongoing initiative ensured continued cost and carbon reductions over the long term.

FAQs on Commercial Energy Efficiency

What are typical energy savings from commercial efficiency upgrades?

Lighting upgrades reduce usage by 50-70%. HVAC upgrades save 10-30%. Insulation, building automation controls and air sealing save 5-20%. Total reductions of 25%+ are achievable.

What payback period can I expect on efficiency investments?

Simple no cost tactics like adjusting setpoints provide immediate savings. Major retrofits like HVAC and lighting typically achieve full payback within 3-5 years.

What expertise should I leverage to identify savings opportunities?

While staff can manage basic upgrades internally, certified energy auditors and consultants provide detailed technical facility assessments and savings recommendations based on their specialised expertise.

Where can I learn about available subsidies and incentives for commercial efficiency?

The federal government and most states offer programs covering energy assessments, commercial lighting upgrades, equipment rebates, and tax deductions for qualifying efficiency works.

How can I engage staff to participate in energy savings initiatives?

Promote results through newsletters and internal dashboards. Highlight positive employee behaviours. Offer contests, incentives and tie bonuses to meeting energy and carbon KPIs.

Real revenue from Virtual Power Plants?: How businesses can create new revenue streams

When the Australian Energy Market Operator (AEMO) announced its Virtual Power Plant (VPP) Demonstrations project in 2019, the aim was that VPPs would become more widely utilised and an integral part of the future energy market1. So, what is a Virtual Power Plant? According to AEMO, a VPP “Broadly refers to an aggregation of resources (such as decentralised generation, storage and controllable loads) coordinated to deliver services for power system operations and electricity markets.”2 

Importantly, a VPP bundles a group of controllable energy assets to trade power/energy into available markets. These assets could be solar farms, wind farms, combined heat/power units and storage systems such as batteries. This is where a VPP’s major benefit lies – as a medium between the market and Distributed Energy Resources (DER)’s. 

Driving decentralisation of the grid

The primary purpose of DERs is as another energy resource that can be integrated into the National Electricity Market (NEM) – to the benefit of consumers and support of system security. But DERs are already changing the way Australia manages its electricity, driving the ‘decentralisation of the energy grid’. The use of DERs is shifting generation away from the large, centralised power stations and towards on-site generation from households and businesses through rooftop solar, wind, etc.  

45% of Australia's electricity generation could be contributed by DER's by 20504

DER demand is only expected to grow. In fact, the Electricity Network Transmission Roadmap estimates that by 2050, DERs may contribute up to 45% of electricity generation3. Given the Australian government's commitment to a Net Zero future, this move towards decentralised energy provides Australian businesses with an opportunity to create new revenue streams by becoming a key part of this transition.  

VPPs are just getting started 

When the Virtual Power Plant project was announced in 2019, AEMO predicted that there would be 700MW of generation by 20221. While the reality hasn’t matched this3 VPPs are an important tool in the market, relieving the grid during peak times and facilitating renewable energy transition.  

Generating extra revenue from energy

The war in Ukraine, price inflation and high global demand has resulted in one of the worst energy crises ever seen. In Australia, business electricity prices have reached record highs, with the 2022 federal budget predicting even further rises5.  

Smart businesses, however, have found ways to create new revenue streams by contributing to the energy grid. By installing meters and monitoring usage businesses have been able to inject excess energy generation into the grid and generate welcome additional revenue. In fact, some retailers have even begun to offer this as a service, fast-tracking the implementation of monitoring and usage control to help businesses become part of a VPP.  

Join the experts at Energy Action for our upcoming webinar on how your business can take advantage of Virtual Power Plants to drive extra revenue.

Register now

Webinar - How your Business can Generate New Revenue through Virtual Power Plants

24 November, 10:00AM (AEDT)

Sources:

  1. https://aemo.com.au/en/initiatives/major-programs/nem-distributed-energy-resources-der-program/der-demonstrations/virtual-power-plant-vpp-demonstrations
  2. https://aemo.com.au/en/learn/industry-terminology
  3. https://ieefa.org/wp-content/uploads/2022/03/What-Is-the-State-of-Virtual-Power-Plants-in-Australia_March-2022_2.pdf
  4. https://arena.gov.au/renewable-energy/distributed-energy-resources/
  5. https://www.afr.com/politics/federal/electricity-bills-to-rise-despite-falling-coal-and-lng-prices-20221026-p5bt06

Accommodating Net Zero: Sustainable Solutions for the Hotel Industry

As international and domestic travel ramps up, the pressure on the accommodation industry to introduce practical sustainability initiatives leading to Net Zero has intensified. Long known as an industry with high levels of wastage and excess, hotels also have “the highest energy intensity of all commercial real estate classes1.” The challenges are substantial, with a paper from global design and consulting firm, Arup, noting that ”The Sustainability Hospitality Alliance found that the hotel industry needs to reduce its carbon emissions by 66% per room by 2030, and by 90% per room by 2050.2” 

66% reduction in carbon emissions per hotel room needed by 2030

Big brands respond

The tourism industry has always been fiercely competitive, and hotel groups – regularly renovating and reinventing themselves – understand the importance of change in attracting clientele. So, it’s no surprise that major hotel groups have embraced the challenge, with 300 of them, post COP26 – including Accor, IHG, Hyatt, Hilton and Marriott – “committing to deliver ‘a concrete climate action plan’ outlining how they will measure, decarbonise, regenerate and unlock finance for environmental measures. 3

Home comforts

Here in Australia, hotel operators and owners are also at the forefront of the sustainability initiative. Just as well, because in Sydney, all hotels – whether established or new – have only until 2026 to meet the city’s Net Zero target for carbon emissions. One of the groups leading the charge is Pro-invest, which owns three Sydney hotels. Sabine Schaffer, managing partner and co-founder of Pro-invest Group, said energy efficiency is now a development priority for its 17 Australian assets4. Indeed, its Holiday Inn Express in Newcastle, opened in 2019, was the first hotel in Australia to get NABERS carbon-neutral certification, with “Energy saving measures including special flooring, light sensors and minibars six times more efficient than the norm4.”

Pathways to progress

There are a number of ways hotels can drive decarbonisation goals. Here are five.

1. Measure consistently: The Net Zero Methodology for Hotels provides guidance on how to approach Net Zero from a practical perspective. Patrick O’Meara, CEO of Sustainability Hospitality Alliance, says: “The Methodology helps hotels to set boundaries, to measure and report emissions in a consistent way, and to make appropriate use of carbon offsetting in the short to medium term. 5

2. Control and monitor: The Arup report1 shows how optimising operations (how rooms are booked, the schedule of heating and cooling, and so on) is the most cost-effective and easiest way to reduce consumption and cut carbon, resulting in a potential 19% savings.

3. Use smart technology: Around 80% of buildings we’ll be using in 2050 already exist1. So modernising older buildings with smart technology is a no brainer. Whether that’s through a simple key card that turns off heating, lighting and air conditioning when guests leave the room, or more sophisticated technology, such as lifts with regenerative drives which recover energy and feed it back into the system – modern technology can have a significant impact on reducing energy and operating costs.  

4. Reduce consumption: “Energy, water and waste account for the bulk of [hotel] emissions, and reducing these can lower operating costs. For instance, energy consumption produces 60% of a hotel’s carbon emissions and represents around 6% of operating costs. 6

60% of hotel's carbon emissions comes from energy consumption.

“If energy is going to be one of the most serious input costs for hotels in the future, the savings resulting from these initiatives can be a game changer.”

Ross Beardsell, Executive Vice President, JLL Advisory & Asset Management, Australasia

5. Switch to renewables: “A good place to start is by swapping out carbon-intensive energy sources such as oil, coal, and gas for newer, cleaner, electric options” says Hospitality Technology7. This could involve buying renewables from the grid, whether from battery or solar, wind power or hydro. Equally, where possible, it may involve producing renewable energy on site. Meliá Serengeti Lodge in Tanzania, for example, generates 45% of its energy via solar panels, while in the US, the Hyatt Regency, Greenwich, generates 75% of its energy from an on-site fuel cell3.

Fueled by necessity, powered by legislation, and increasingly driven by consumer values, the move to Net Zero is inexorable. There’s no clearer evidence than the Hotel Marcel in New Haven, Connecticut – the US’ first Net Zero hotel, run entirely on energy generated from solar technology.

As Ross Beardsell says, “Who knows, sustainability initiatives could be the difference between winning a major account and market share in what is an increasingly competitive hotel market.”

Act now to make an impact tomorrow

Energy Action has helped thousands of businesses across multiple industries make the transition to sustainability and Net Zero. (We achieved Net Zero ourselves this year.) Energy Action’s services include:

Solar auctions: Through our solar auction platform you can quickly and easily get the right solar solution, at the best possible price, and select the right purchasing method for you. Installing solar will save your business considerable sums while lowering your emissions and reducing dependency on the grid.

Net Zero transition: Energy Action has a proven five step process to help your business make the transition to Net Zero:

STEP 1: Measure your usage and emissions: you can’t improve what you don’t measure.

STEP 2: Lower your costs: use the measured data to establish areas for improvement.

STEP 3: Consider your emission reduction options: match your appetite for renewables to your budget and timeline.

STEP 4: Procure at least-cost: let energy retailers, renewable energy producers and/or installers compete to win your business.

STEP 5: Manage: from contract fulfilment to certification management.

For more information on how we can help your metal foundry business reach its Net Zero goals, contact us today.

Sources:

1. Schneider Electric blog. Net zero carbon hotels: Making hotels of the future a reality today. May 3, 2021.

2. Arup Research: Transforming Existing Hotels to Net Zero Carbon.

3. Accom News: Op-Ed: Clear, honest sustainability charter imperative for every hotel in 2022. Ross Beardsell,

    December 7, 2021.

4. CoStar: Sydney Hotels Gear Up for Ambitious Net-Zero Targets. Tamara Thiessen, April 12, 2022.25 October, 2021.

5. Hospitalitynet: Hospitality industry launches new net zero methodology for hotels. December 17, 2021.

6. Hospitalitynet article 3 ways to reach net zero by 2050 in the accommodation sector. Ben Schroeter, Director of Strategic.

Making metals work: moving to zero emissions.

If people were asked to guess what is the biggest planet polluter in terms of man-made greenhouse gas emissions, high on the list would be cars. Yet, astonishingly, global metal production accounts for more than all cars combined – responsible for 9% of greenhouse gas emissions1. According to a report: “Steel is the second-most polluting industrial material after cement, causing 7% of global greenhouse gas emissions.1When we consider that developing countries still need to increase their stocks of metal to provide essential services such as transport, housing and communications for their citizens, it’s clear that the production of primary metals will continue to increase, making the drive towards zero emissions in accordance with the Paris Agreement ever more difficult.

9% of the world’s emissions comes from metal production

Two approaches: Change the process

At the heart of one potential change in steelmaking is ‘green steel’ – a process that involves manufacturing steel without using coking coal; a process that is forecast to eventually be more efficient than blast furnace steelmaking. “Hydrogen made using renewables, known as green hydrogen, has been hailed as the energy and reactant source to replace coking coal in steel manufacturing,” says an ABC report3.

In Australia, Andrew Forrest, founder of Fortescue Metals Group, is an enthusiastic supporter, saying “The solution is hydrogen. To make it, all you need to do is run electricity through water4”.  BlueScope Steel is also embracing the challenge, while acknowledging that there’s a long way to go in terms of the technology being able to produce the renewable energy quantities required to manufacture steel at today’s levels.

Two approaches: Be more energy efficient

Metal producing businesses are necessarily energy-intensive businesses. Why do they need to lower their carbon footprint and move towards Net Zero emissions?

Energy price rises – these can have a considerable impact on business profitability

Reliance on a single source of energy – comes with business continuity risks; better to use diversified energy sources

Regulatory pressures – pushing organisations to account for and reduce their emissions 

Community pressure – increasing consumer desire to only engage with ‘sustainable’ businesses

Five ways to reduce energy costs

Sustainability Victoria5 worked with over 300 metal fabrication manufacturers, looking at energy use and how to minimise energy costs. Some of its key findings include:

1. Insulate piping: Insulating steam or chilled water piping to reduce temperature loss and improve the amount of energy used to function.

2. Implement heat recovery: Redirect heat that would otherwise be vented outside to preheat water for boilers or heat the workplace.

3. Install power factor correction equipment: Power factor is a measure of how effectively your equipment uses electricity. Reduce the amount you pay on your ‘network demand charges’ by improving your power factor and correcting supply inefficacies.

$600k saving over 3 months thanks to demand response strategies

With power bills of between $700,000 and $1.2 million each month, Adelaide metal foundry, which consumes around 4% of South Australia’s energy supply each year, has a huge incentive to reduce energy costs. Thanks to using ‘demand response’ strategies to switch off in times of peak demand, it was able to save $600,000 on its power bills in three months6.

4. Install a gas or electricity meter on high-energy equipment: Monitor use on equipment that uses the most energy. Analyse the data to see if the equipment is working efficiently.

5. Invest in solar: Power your site with a photovoltaic solar system to reduce your energy costs and greenhouse gas emissions.

Act now to make an impact tomorrow

Energy Action has helped thousands of businesses across multiple industries make the transition to sustainability and Net Zero. (We achieved Net Zero ourselves this year.) Energy Action’s services include:

Solar auctions: Through our solar auction platform you can quickly and easily get the right solar solution, at the best possible price, and select the right purchasing method for you. Installing solar will save your business considerable sums while lowering your emissions and reducing dependency on the grid.

Net Zero transition: Energy Action has a proven five step process to help your business make the transition to Net Zero:

STEP 1: Measure your usage and emissions: you can’t improve what you don’t measure.

STEP 2: Lower your costs: use the measured data to establish areas for improvement.

STEP 3: Consider your emission reduction options: match your appetite for renewables to your budget and timeline.

STEP 4: Procure at least-cost: let energy retailers, renewable energy producers and/or installers compete to win your business.

STEP 5: Manage: from contract fulfilment to certification management.

For more information on how we can help your metal foundry business reach its Net Zero goals, contact us today.

Sources:

1. From mining to making: Australia’s future in zero emissions metal

2. CSIRO website: Steeling ourselves: How Australia can support the transition to net-zero steel

3. ABC News website: Startup promises green steel by 2025 as decarbonisation race heats up. 8 February, 2022.

4. ABC News website: Hydrogen touted as solution in BlueScope's long road to green steel 25 October, 2021.

5. Sustainability Victoria website: Energy efficiency in manufacturing metal

6. Australian Financial Review:Powershop, United Energy, metal foundry sign up for demand response trial 11 October, 2017.

COP26 and the European Energy Crisis - Lessons and Implications for the Australian Energy Transition

You can date the change in the politics of climate change in Australia to the bushfires that swept the country in the summer of 2019/2020. In the wake of fires larger than medium-sized European countries burning for weeks, the Australian public decided that it was ready to act on climate change. The rain came. We got lucky this time.

Surveys of businesses across the country consistently reflect the importance of this issue. They show that everyone from Board members down to the employees want to change.

 This month the Australian Retailers Association has released research indicating that 63% of their members agree that urgent action is needed to mitigate the impacts of climate change. This strength of this finding prompted ARA CEO Paul Zahra to call on the government to heed the message and get serious about climate action.

The ARA research is corroborated by research from Energy Action, an energy management business that has been helping Australian businesses simplify, clean and lower the cost of their energy spending for more than 20 years. Energy Action released research in August this year revealing that 85% of employees of Australian businesses believe that regardless of what the government does, businesses need to act on climate change.

As we hurtle towards the last chance saloon of COP26 in Glasgow in November, we are watching the spectacle of the minority coalition party hold sway over the Federal Government as our Prime Minister belatedly fixes a binding - but not legislated- target of net zero emissions by 2050.

Based on reports from the National Party room this week, it appears that a strengthening of the existing 2030 commitment of a 26-28% reduction on 2005 emission levels has been taken off the table. This will be problematic for the Australian delegation in Glasgow. It conflicts with the widely accepted projections that Australia will deliver a 35% reduction by 2030. It also conflicts with the emerging consensus across business leaders that the next 10 years will shape Australia's opportunity to become a renewable energy powerhouse.

To be fair, however, the past 14 years of federal politics in Australia leaves us with no doubt that selling the vision of a cleaner world with a clear pathway to get there, is more difficult than you might think.

The politics are contentious: big changes create uncertainty, which amounts to uneven distribution of costs and benefits. The proposed changes mean new engineering solutions are required, as are social and demographic changes.

The sweep of changes is immense, from closing mines and generation assets that bring benefit to communities and the nation, threatening both regional towns and the GDP, to driving change in the skills mix that powers the workforce. The stakes are high: the process of change in our 21st-century economy inevitably creates winners and losers, which may take years or generations to unwind.

Looking beyond the politics, we have the science. Scientists have anticipated the possible increase in temperatures that carbon emissions will cause. It's been articulated time after time that these temperature changes will and are impacting people’s lives. The 2019 bushfires that wreaked havoc in Australia came from years of drought and poor forestry management. This was predictable; however, the scale and ferocity of the fires were not.

Meanwhile, in Europe and across Asia this week, economies are bracing for severe winter and a real prospect of energy shortages. Short term wholesale LNG prices in London, Amsterdam and Tokyo are tipping $AUD 40/GJ. Windfarms are failing as weather patterns change. There are predictions of people dying and factories halting production. If shortages in energy supply eventuate, they will magnify frustration, fuel inflation and cause decision-makers to turn back to emission-intensive fossil fuels to generate electricity. The politics that have allowed progress to date, may change.

In short, engineering a path of significant social and technological change against a volatile change in climate is more difficult than we all expected. In the next breath, it is obvious that delaying the change is not going to make it easier.

So, with the political and climate stakes so high, what can Australians expect out of COP26?

Australian businesses are well integrated to the global economy. We have our significant supply chain and market exposure to the US, Asia and Europe. This integration, coupled with local exposure to energy costs mean, COP26 is looming for all businesses, and many are not prepared.

The two biggest issues likely to arise from COP26 are:

1. the increased pressure on Australia to announce a plan towards net zero in 2050 (or earlier)

2. the beginning of the establishment of an international Cross Border Adjustment Mechanism (a carbon tariff).

Let’s take a moment to look at what each of these means for Australian businesses:

Pressure to adopt an aggressive trajectory towards net zero.

COP26 comes five years after the 2015 Paris Agreement, at which 190 members of the 197 original signatories to the 1994 United Nations Framework Convention on Climate Change (UNFCCC), agreed to do 2 things:

1. work together to limit global warming to well below 2 degrees and to aim for 1.5 degrees, to adapt to the impacts of a changing climate

2. meet every 5 years to review their commitment to this goal and update their plan to reflect their highest possible ambition at that time.

A recurring issue in Australian politics since the ratification of the Paris Agreement in 2016, is whether our commitment to a reduction in greenhouse gas emissions of 26- 28% below 2005 levels by 2030 is enough to limit global warming to less than a 1.5 degree increase on pre-industrial levels.

As we can see playing out in federal politics in Australia this month, pressure will be required at COP26 to push leaders to do today what can be put off to tomorrow. Collectively setting the bar at the lowest common denominator will not deliver the outcome that the planet needs.

Significant and continuous investment will be required over the coming decades to get us there. The IEA estimates the phenomenal sum of $USD 5 trillion per year will be required by 2030, and ongoing to 2050, to convert global energy systems to low emission systems.

The good news is that IEA thinks that energy systems globally can do this without carbon offsets. The bad news is that this will translate into higher energy input costs globally, and replacement costs for end-use equipment as well. Expect to hear a lot more of the buzz phrase “electrify everything” (and then combust hydrogen for what’s left).

In Australia, there are fewer constraints than some nations to supporting an entirely renewable and zero-emission energy system.. The key question is what is the pace of change that the system (including consumers) can support? On the eastern side of the country, State Governments have initiated renewable energy zones to target upgrades in transmission and distribution systems required to support intermittent power and storage. But gas is likely to be a transition fuel, even if we can wean ourselves off coal faster than predicted. As new energy storage comes online (including Snowy 2.0 in 2026 onwards), and the pace of investment ebbs and flows with access to rare earth minerals and engineering skills

We can expect one constant: international LNG prices will set the price for the firming of electricity supply for at least the next decade.

In the background, we can also see as an outcome of pressure to do more sooner at COP26 that the trade-in carbon offsets will increase in value, as will obligations on businesses to purchase them to acquit their emissions. COP26 is seeking to engage finance and develop carbon markets to further support a transition to a zero-emission global economy. The contentions around the claims of what does and does not constitute a high-quality carbon offset will also increase. This development will go hand in hand with an increase in reporting obligations to increase transparency in carbon reporting globally.

Carbon Pricing: the EU proposal for a Cross Border Adjustment Tariff

A significant proposal that will be discussed in detail at COP26 is the European Union’s proposal to implement a Cross Border Adjustment Mechanism (CBAM): a carbon tariff.

The intent of the CBAM is to reduce carbon leakage by equalising the direct carbon costs embedded in products that are produced in jurisdictions that have implemented a carbon price, with products that are exported from a jurisdiction that has no such cost impost applied.

This issues a threat to all Australian exports. The fact that Australia does not have a mandatory carbon price will leave Australian exports at a price disadvantage in those markets. As an obvious, Australian coal exports are vulnerable. If coal buying countries are required to account for the carbon embodied in the products they produce, this puts Australian coal at a price disadvantage compared to the less emissions-intensive energy generation sources.

It is also an opportunity for consideration for all Australian manufacturers. Where previously high energy costs have hampered Australia’s onshore manufacturing industry, a CBAM offers the prospect that energy costs will be equalised around the world, providing Australia with a natural advantage if we can make the leap to a low cost, reliable and renewable energy system.

The matter of carbon leakage is one that COP26 will seek to implement new rules on. However, it is unlikely that the EU CBAM will be accepted at COP26. This is partly because its principle of discriminating between products based on their input costs is at odds with a number of the key principles of the World Trade Organisation (WTO), regardless of how they may have been produced. Indeed, it is unlikely that the EU has proposed the complex set of rules with an expectation that they would be accepted at COP26.

More likely is that the EU has proposed the CBAM system, replete with blank schedules on carbon pricing methods and exempted countries in order to spur negotiation on the issue. Whether this can be achieved over 10 days in Glasgow, remains to be seen.

Find out more as it happens

Join us for an early wrap of COP26 on the 11th of November, as we discuss with Alfa Energy, our partners in the UK, the up-close view of COP26, and also European energy pricing. We will try and dig into the news from Glasgow, and the lessons we can draw from the UK energy transition.  You can register for our free webinar by clicking here.

Net Zero: How to Move Intentions into Action

As more businesses chart a course towards net zero emissions, we look at some of the steps to actually get there.


Almost a third of Australia’s 300 largest listed companies have now committed to net zero carbon emissions. The rate of business-led net zero commitments has also accelerated in the light of the alarming report delivered by the UN's Intergovernmental Panel on Climate Change (IPCC).


Pledging to net zero emissions is an encouraging step, following up with an action plan is the hard part. We look at five key elements of implementing net zero plans to help businesses take the next steps.


Measure


Achieving net zero emissions by the intended target date starts by understanding your business’ current carbon footprint. This means measuring your energy and emissions data across all sites and energy suppliers.
There is a difference though between energy intensity and emissions intensity. For example, a building may have low energy intensity as measured by the NABERS energy intensity framework and benchmarking tool. However, if the same building is heavily reliant on coal-fired energy sources, it will not have low emissions intensity.


Reduce


As Dr Alan Finkel noted in the July edition of Quarterly Essay that 82% of Australia’s emissions in 2020 are related to fossil fuel combustion. This included electricity (34%), stationary energy (20%), transport (18%) and fugitive emissions in fossil fuel extraction and transport (10%). Businesses must thus examine energy usage, including when and where it is being used. Simple changes like motion-sensing lighting and opting for cost-effective, energy-saving equipment can reduce both emissions and running costs.


Renewable energy


Replacing energy generated by fossil fuels with renewable energy should be a cornerstone of businesses’ net zero plans. Our clients have recently discussed how current low pricing large-scale generation certificates can help them to reach their net zero energy targets ahead of schedule.


Renewable energy options include onsite solar. Because these don’t have standard network supply charges, again, they can reduce both emissions and running costs. Through our Solar Auctions, businesses can have reputable suppliers bid competitively for their required system spec delivering further cost efficiencies.


Procurement


Innovative low emissions procurements options are emerging. For example, we have launched Green Auctions, a cost-effective way for businesses to secure a renewable-backed energy supply agreement (RESA) and speed up their transition to net zero. Businesses can now leverage a standard energy supply agreement to access 50% to 100% firm priced renewable supply.


Some of our clients say that the type of energy they purchase and their upgrades to property and equipment are also opportunities to drive change through their investments and to signal to the energy market that emissions reduction is the intent.


Offsets


Many businesses may have some residual emissions that are either very difficult to eliminate or outside of their control. This is where carbon offsets may help. These involve buying offsets from companies planting trees to absorb carbon or installing renewable energy, for example.


However, the price of carbon offsets remains low due to supply outpacing demand in previous years. This, it is argued, can make offsets more appealing than other more impactful pathways to deeper emissions reduction.
While carbon offsets can also help channel money into new technology, it is important to scrutinise their credentials. For example, would these projects have been financed without an offsets market and therefore do not offer additional environmental benefits?


Stakeholder engagement


Energy Action’s net zero plan also captures waste, paper usage, business travel and catering. Eventually, it will extend to events and conferences and our employees’ commute to work. But to ensure that energy initiatives are ongoing, stakeholder engagement and strong governance are imperatives.


Energy management policies that guide procurement teams through minimum performance or emissions reductions standards are emerging as one way to achieve organisational alignment. If you are considering how to formulate and implement these policies, we encourage you to attend our energy management webinar on 7th October.

The Time is Now - Why You Should be in the Market for Solar Today

The time to contract for solar energy is now. Rebates for installations in Victoria will reduce for solar installations completed after January 2022.

There has always been a compelling argument in favour of installing solar panels sooner rather than later: the sooner you get your system installed, the sooner the price of your energy bill will drop. Your carbon emissions are also reduced immediately.

Also in the mix is the volatile value of the various Government rebates available for your project. There are various state and federal rebate and subsidy programs that may be available to support your solar projects. The specific issue of timing differs from state, but the theme is the same: the longer you wait, the lower the value of the rebates available to support your project.

Solar in Victoria:

The Victorian Energy Efficiency Certificate (VEEC) scheme, which provides substantial funding for solar installations, will reduce for installs completed after January 2022.

This presents Victorian customers with a once-in-a-decade opportunity to implement large solar systems on their roof (or ground) this year. Due to the skyrocketing price of VEECs, we are now seeing the payback on a large solar system (>500 kW) of 3-4 years.

The VEEC rebate drops by 20% on 31 Jan 2022. This reset is expected to decrease the net payback on projects installed after January next year by up to 10 per cent. To make the most of the rebates, you must contract now to complete your installation before the reset comes into effect.  

Beyond Victoria, the Federal Government rebate supports solar installs below 100KW, the upfront Small-scale Technology Certificate (STC), and the certificate scheme supporting installations greater than 100KW and the Large Scale Generation Certificate (LGC) will be one year closer to their sunset date of 2030. The way both of these schemes work is that your project is rewarded for its deemed or actual solar production over the scheme's life so as each calendar year ticks over and the reward period is shortened, the rebate opportunity is reduced.

Other incentives to move now to contract include the opportunity businesses now enjoy to claim solar as a tax deduction. Where a small business is operating remotely, a solar system under $20,000 can be claimed under the instant asset write-off scheme.

The Outlook for Solar Remains Hot

The Australian Energy Regulator (AER) released its 2021 State of the Market report earlier this month. Observing that in 2020 more than 2500MW of behind-the-meter solar capacity was added to the market. A statistic that really indicates scale to this number is that in  2021, 24% of energy consumers across the National Energy Market have installed behind-the-meter solar.

This growth in the market is projected to continue on this steep trajectory, even as the rebates roll off. According to the AER, there is an estimated between 13 and 24 GW of behind-the-meter solar capacity forecast to be installed over the next 20 years.

It's easy to see why there would be such a growth in the use of solar. Energy Action has been in the commercial and industrial solar market for the past decade,  and we have seen the market mature considerably. Incremental advances in equipment performance, coupled with the emergence of a highly experienced body of installers with a legacy of high-quality projects, means that procurement can now match the right kind of installer and installation for the right type of situation.

 The Quickest way to get From your Desktop to Solar Power

With current COVID-19 restrictions adding extra complexity to the task of scheduling a solar install, the reality is that a solar install before the end of January is a tough ask. In addition to the challenge to sort through the myriad of offers you are probably receiving from installers, technical and quality issues need to be addressed. 

One of the easiest ways on the market to make the transition to solar power is via Energy Action's Solar Auction Platform.

Our online reverse auction process for solar is currently achieving reductions of 16% from the first bid to the last bid. From the highest initial offer to the final accepted offer, the whole process has led to an overall reduction of 42% in cost for the participant.

All we need to get started is a copy of a recent bill, your meter information and available rooftop configuration to determine your requirements. We can provide initial offers for your acceptance within a week from Qualified suppliers and then help you drive the margin down through our Solar Auction process.

Click here to learn more about Energy Action's reverse auctions for solar.

It's crucial to note solar installation projects take up to four months to build, so now is the time to assess the savings solar will deliver for your site and then procure with our Solar Auction process.

And for your grid-supplied energy, Energy Action's Green Auctions provide businesses with a means to enjoy the benefits of a firm price renewable energy supply to meet net zero obligations, where multiple renewable energy retailers competitively bid for a business' contract.

To find out more about these options, contact Energy Action today on 1300 964 589, or get in touch with your account manager.

Energy Efficiency is a Jobs Machine - and Local Governments can Start It Up

There's been a lot of talk recently about how to kickstart Australia's economy in the wake of the COVID-19 pandemic, particularly in the energy sector. The momentum towards renewables is unstoppable. However, there is another, often unsung, side to the energy transition: how efficiently and productively we use our business energy. It isn't as sexy as solar panels on roofs, or as obvious as wind turbines sitting on rolling hills, but it is crucial, and importantly it is a real jobs machine. Let's learn more about energy efficiency in the sections below.

At its heart, energy efficiency is the art of making buildings healthier, cheaper to run and more comfortable. The data shows that a major drive to improve the energy efficiency of buildings and industry across the nation could deliver more than 120,000 job-years of employment.

Efficiency retrofits and new builds consistently top the charts in comprehensive analyses of energy-related stimulus options by organisations such as the International Energy Agency, the International Monetary Fund and Australia's own Beyond Zero Emissions and Climate Council.

A major push to upgrade Australia's buildings has been backed in by everyone from the Australian Council of Social Service to the Business Council of Australia - not two organisations that you often see on the same page.

But wait, there's more. As energy efficient buildings are more comfortable, people are healthier and happier and as industry is more productive, businesses are more competitive. Plus, energy efficiency saves money, making our companies more resilient to economic shocks.

So, what's not to like? Nothing. I've been working in this space for a while, and I've seen the potential for local councils to drive the energy efficiency revolution.

When I worked for Salix Finance in the United Kingdom, I supported councils in rolling out their energy efficiency programs, including street lighting LED upgrades that cut electricity bills in half.

In Australia, Orange City Council is leading the way.

It is about to save $170,000 in annual electricity costs, as well as $34,000 in maintenance costs, just by upgrading to LED lighting in all of its buildings.

So, if the savings are so significant, how can councils get their ratepayers onside for investments in super sensible - but not very sexy - upgrades to light bulbs, appliances and insulation?

The key is to turn the invisible, visible.

Many councils in the UK use the energy savings to upgrade parks, playgrounds and other public facilities, helping attract new businesses and jobs to the area.

Some councils also use savings to support local businesses and households to improve their own energy use, making them more resilient to economic upheaval and easing the horrible phenomenon known as "bill shock".

Indeed, the most effective council-wide energy efficiency strategies are the ones that combine both council facilities upgrades and programs to support local businesses and households.

CitySwitch is a great way to do this.

This national program, spearheaded by Australian capital cities, represents more than 600 organisations, 16 per cent of Australia's office space, a million people and $1 billion of spending power.

Businesses signing up to CitySwitch agree to an energy rating assessment that allows them and their tenants to see their energy consumption.

They can also receive advice on behaviour change and simple upgrades.

The COVID-19 pandemic, while devastating, has also provided us with a circuit breaker. We have a chance to rethink our priorities, and the future we need to build to be able to thrive. It may not be high profile and exciting, but investing in energy efficiency will get us back to work quickly, and help secure our economic future.

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This article was first published by Holly Taylor for the Energy Efficiency Council via youngwitness.com.au and has been published by Energy Action with their approval.

If you would like to sign up for the Energy Efficiency Council newsletter please fill out this form and join their mailing list

Reimagine Savings with Energy Efficiency Incentives

Climate change is becoming an increasingly more critical issue for the planet and its inhabitants. It is well understood that a solution to climate change cannot be implemented over-night and requires an immense amount of support from government, businesses, organisations and individuals around the world. In Australia, the last few years have seen an increase in federal, state and local government support for combatting climate change through energy efficient incentives nationally and in their respective states. Read on to learn how you can reimagine savings with energy efficiency incentives.

Overview of commercially viable incentives for businesses.

  1. The federal government stimulus package - available for energy efficiency investments*
  2. Federal government Large-scale Technology Certificates (LCG's) & Small-scale Technology Certificates (STC's) for solar PV systems
  3. State government funding including
    1. the Victoria Energy Upgrades (VEU) and Energy Saving Scheme (ESS) in NSW for LED lighting upgrades
    2. the Business Recovery Energy Efficiency Fund in VIC
    3. Retailer Energy Efficiency Scheme (REES) in SA
  4. Funding through an Environmental Upgrade Finance (VIC) and Building Upgrade Finance (NSW)

The Federal Government's stimulus package consists of an instant or accelerated asset tax write off to help your company save money during the current, unpredictable environment. All assets (under $150,000) installed before the 30th of June 2022 will benefit from accelerated depreciation deductions enabling businesses to deduct 100% of the cost upon installation*. For a 250kW solar system, you can reduce your FY21 tax payable by approximately $60,000, plus get additional energy savings on top of that!

Small-scale Technology Certificates (STC’s) and Large-scale Technology Certificates (LGC’s) are federal government incentives for solar installations. STC’s are for solar systems under 100kW while LGC’s are for those 100kW and above. Incentives available depend on the value of the certificates at the time and the value of the certificates depend on market demand. Every new solar system that gets installed should qualify for either STC’s, which businesses get as an upfront discount to subsidise the cost of your solar system, or LGC’s. STC’s and LGC’s are created per megawatt hour of eligible electricity generated/created so the size of your solar system will determine how many certificates are generated.

The Victorian Energy Upgrade (VEU) and Energy Savings Schemes (ESS) issue certificates (VEEC's and ESC's respectively) that subsidise the cost of LED lighting upgrades in VIC and NSW, respectively. Like STC's and LGC's, VEEC's or ESC's for LED lighting upgrades have a value that depends on market demand. Currently, the value of VEEC's and ESC's are at an all-time high, and in some instances, quality LED lighting upgrades can be free or heavily discounted. Both come as an upfront discount and subsidise the cost of your upgrade.

The South Australian Retailer Energy Efficiency Scheme (REES) provides funding to local homes and small businesses for energy-saving practices such as upgrading your lighting to LEDs. This incentive is only available from select energy retailers and their contractors.

The Business Recovery Energy Efficiency Fund in VIC has been implemented to help VIC businesses become more efficient and improve competitiveness, including but not limited to the installation of "energy efficient equipment" and "replacing emissions-intensive equipment with low-emissions alternatives.

If you do not have the capital to pay for installing these products, there are several different finance options available that provide cash flow positive solutions from day 1. Options can include:

  1. Building Upgrade Finance (BUF) or Energy Upgrade Finance (EUF), obtained through some local councils, are allocated as an operating expense and paid off through rates. The loan is available for solar, LED and battery storage and stays with the property.
  2. Power Purchase Agreements (PPAs) made between a business and a PPA provider who installs a solar system. The business buys electricity generated by the system through the PPA provider at an agreed reduced rate and duration. At the end of the agreement, the business may purchase the solar system for as little as $1!
  3. A lease agreement for solar, some with $0 upfront payments, can be taken out over a specific period. At the end of the period, the business will own the asset while saving money from reduced energy bills.

When choosing an energy efficiency company to partner with, there are a few significant considerations: financial backing, experience, accreditations, safety procedures, reliability and quality of products. Accreditations, such as Clean Energy Council (CEC) Approved Retailers, ensure the company adheres to the Solar Retailer Code of Conduct and other industry requirements. The retailer's safety practices reflect the values of the company and the importance they place on their and your, staff safety. Some companies will come with additional backing through shareholders and partners and provide peace of mind that they will be a substantial and long-term partner, in particular, to honour warranties on products that can be up to 25 years. Lastly, the quality of the products. Check that the products offered are Tier 1 and approved by the Clean Energy Council to ensure the highest quality and longest life so you can save money now and into the future, worry-free. Warranties should be important to businesses. Look for products that have Australian offices and with local warranty and customer service support.

Energy efficiency does not have to be difficult, but doing your research and going with the right company will save you money, time and effort and, importantly, reduce carbon emissions!

*Subject to terms and conditions. Please speak to your financial advisor or accountant regarding the above information.

The above article was submitted to us  by Cherry Energy Solutions. Click here to visit their website and find out more about their services.

Guide to government & industry programs for energy-efficient businesses

With the volatility in recent energy prices, it’s timely to remind our clients that in addition to, and parallel with, the services provided by Energy Action, there are a range of industry and government programs available to support businesses to understand their energy use and implement energy-efficient practices, systems and technologies.

Both national and state-based incentive programs may be available to assist businesses to reduce their energy and environmental footprint, some of which are set out below.

Please contact your Energy Action representative for more information.

National Australian Renewable Energy AgencyThe $3.2 billion Australian Renewable Energy Agency (ARENA) is an independent Commonwealth authority, supporting innovations that improve the competitiveness of renewable energy technologies and increase the supply of renewable energy in Australia. ARENA invests in research, development, demonstration, deployment and commercialisation of renewable energy and related technologies.

For further information refer to Australian Renewable Energy Agency.

Clean Energy Finance CorporationThe Clean Energy Finance Corporation accepts proposals from organisations seeking finance for investment-ready renewable energy technology, low emissions technology and energy efficiency projects. Funding will be invested in the areas of low emissions technology and energy efficiency related to energy conservation or demand management outcomes.

For further information refer to the CEFC website.

Commercial Building DisclosureCommercial Building Disclosure is a national program designed to improve the energy efficiency of Australia’s large office buildings. Most sellers or lessors of office space of 2,000 square metres or more are required to obtain and disclose a current Building Energy Efficiency Certificate (BEEC) under the Building Energy Efficiency Disclosure Act 2010.

A BEEC is comprised of a NABERS Energy star rating for the building, an assessment of tenancy lighting in the area of the building that is being sold or leased and general energy efficiency guidance.

For further information refer Commercial Building Disclosure.

National Australian Built Environment Rating SystemThe National Australian Built Environment Rating System (NABERS) is a performance-based rating system for buildings that uses a star system to rate a building on the basis of its measured operational impacts on the environment. The NABERS system now extends to 6 stars and is a simple indication of how well a commercial building manages the environmental impact of the resources used compared with similar buildings.

For further information, refer the NABERS website.

NSW Energy Saver ProgramUnder the Energy Saver Program, opportunities identified through energy audits on small to medium sized NSW businesses may be eligible to generate tradeable certificates under the NSW Energy Savings Scheme. Audits can also be used to generate a NABERS rating in relevant businesses. The program also subsidises specialist audits for different types of technology and equipment such as lighting, industrial refrigeration and HVAC, to facilitate adoption of cost-effective, commercially proven energy-efficient practices and technologies.

For further information refer the NSW Office of Environment and Heritage website.

Environmental Upgrade AgreementsThe financing of sustainability improvements to many existing buildings in New South Wales is now easier with Environmental Upgrade Agreements (EAUs). Under the agreement, owners of non-strata commercial and light industrial buildings can access funds from a finance provider for energy, water and other environmental improvements.

For further information refer the NSW Office of Environment & Heritage website.

Queensland ecoBizThe ecoBiz program supports Queensland companies to measure current energy, water and waste use, identify opportunities, and plan and implement energy-efficient business practices.

For further information refer to ecoBiz.

Watt SaversWatt Savers aims to assist small to medium enterprise and community organisations in South East Queensland to save money and greenhouse emissions. The program includes fact sheets, telephone advisory services, workshops and information on accessing finance and funding options.

For further information, refer to the Watt Savers website.

South Australia Solar Cities Business Energy Efficiency ProgramSolar Cities Business Energy Efficiency Program is part of the Adelaide Solar City project and is designed to assist small to medium and large companies, as well as business tenants and organisations to cut power consumption, increase profitability and reduce the production of greenhouse gases.

For more information on Solar Cities, visit the EEX website.

Victoria 1200 Buildings ProgramThrough the 1200 Buildings Program, the City of Melbourne is seeking to catalyse the environmental retrofit of 1200 non-residential buildings, which represent 70% of the commercial building stock within the municipality.

The program is managed through a strategic partnership between the City of Melbourne and the Sustainable Melbourne Fund (SMF) which offers environmental upgrade agreements to eligible building owners.

For further information refer to the 1200 Buildings Program website.

Victorian Energy Efficiency TargetVictorian Energy Efficiency Target (VEET) is a ‘tradeable certificate’ scheme aimed at increasing consumer energy efficiency, reducing emissions and promoting investment, employment and innovation in energy efficiency industries. Accredited installers offer householders and businesses around 30 prescribed energy efficiency activities designed to reduce their energy use. The installers can convert these to Victorian Energy Efficiency Certificates (VEEC). The VEECs are typically sold to large energy retailers in Victoria which are required by law to surrender a certain number each year.

For more information refer to the VEET scheme website.

Northern Territory ecoBiz NTecoBiz NT is a program for small to medium businesses in the Northern Territory to assist them in addressing energy and water use, materials management and consumption. It is based on a six-step process which includes an audit of resource usage and an assessment of relevant energy-efficient practices with the ultimate aim of reducing business costs and improving efficiency.

For more information refer to ecoBiz NT.