Realistic energy management solutions can help save money.
COMPANIES in Australia have experienced price spikes in energy costs
in the past decade that seem to just keep rising. So giving them the opportunity to manage these increases is a vital step the Federal government and state governments are taking through grants and programs. But experts in the Australian energy sector say more should be done to support businesses such as manufacturers who need to be well-equipped to deal with surges in the market that are changing quicker than they can adapt.
Energy Efficiency Council CEO, Luke Menzel, said electricity prices and gas prices went up rapidly a few years ago and many manufacturers found themselves caught up in those increasing costs. “It happened very suddenly from the perspective on energy users, and much of these price rises occurred because of policy failures at a political level. All of
a sudden energy prices ramped up,” said Menzel. A 2017 report by the Australian Competition and Consumer Commission, Retail Electricity Pricing Inquiry, indicated that retail electricity prices increased by 80 to 90 per cent in the past decade. Menzel said in order to manage these price hikes, and a spike in gas prices, governments need to step up.
“Manufacturers shouldn’t be suffering. Governments should play a larger role to ensure manufacturers are supported through this transition.”
“The government in Australia that is really leading the way on this is the NSW government. They established a support program for NSW companies to upgrade their operations so they can deal with higher energy prices. We think that’s an opportunity for state governments, and ideally a Federal government, to look at what NSW is doing and scale it up,” said Menzel.
The NSW government implemented a manufacturing efficiency funding program, which offers more than $16 million in funding to help manufacturing businesses save energy and money.
The funding helps manufacturers upgrade energy monitoring systems, replace or retrofit old, inefficient equipment, install new energy efficient equipment, and improve manufacturing processes. Successful applicants get up to $120,000 in matched funding per site, to implement a project that saves gas or electricity.
Adopting renewable energy
The Federal government has energy initiatives in place such as one that helps small business owners and households. Under the Small-scale Renewable Energy Scheme program, candidates that install a small-scale renewable energy system – such as solar, wind or hydro – or an eligible hot water system, may receive help with the purchase cost.
The Ecoeffiency Group director, Penny Prasad, said businesses and governments need to have stronger focus on renewable energy and the importance of this. “For businesses, all they can do is be really on top of where their energy is coming from now and what they can do to be more efficient.
“There’s a transition going on and there needs to be a bit of vision and more strategy so that it’s not hitting business as hard,” she said. Many companies are getting behind renewable energy to benefit their business and the environment. For example, organics recycling, composting and renewable energy manufacturer Peats Group, opened a fourth compost and renewable energy manufacturing site in May. Located in South Australia, the opening of the site comes about 12 months after the Australian government funded its $222.3m Regional Jobs and Investment Packages program – awarding Peats with one of nine grants for an advanced composting and renewable energy facility. It is projected to create 60 part-time jobs over the next two years. The renewable energy plant will be fully operational by mid-2020. While some companies have access to grants and programs, Prasad said companies need to take action regardless for the cost and environmental benefits avaliable now. “Things need to settle down with the energy market. It’s going to be a really bumpy ride. But meanwhile, there’s so much that can be done with energy efficiency,” said Prasad. She highlights solar energy as one source of energy businesses can take on.
Prices slowly declining
While experts agree there is scope for companies to benefit from renewable energy and government initiatives that will help lower costs, there is also some light at the end of the tunnel for businesses regardless of what they do.
According to the Australian Minister for Energy, Angus Taylor, government pressure on retailers resulted in lower power bills from January 2019 for residents in NSW, Victoria, South East Queensland and South Australia. He said energy retailers including Origin, Energy Australia and AGL lowered their standing offer price in the new year. The government estimated that with this pressure on energy retailers, households and small businesses are paying up to 15 per cent less on their electricity bill.
The Clean Energy Council of Australia estimated that prices are expected to fall by an average of 6.2 per cent over the 2018-19 and 2019-20 financial years.