Australia’s energy conundrum: Interview with Veolia’s Rod Naylor

Last month during the Energy Productivity Summit that featured prominent international industry leaders giving their thoughts on energy management and sustainability issues, Manufacturers’ Monthly caught up with Rod Naylor, Executive General Manager – Growth, Veolia Australia and New Zealand, to get his thoughts on the energy issues the country is facing and how Veolia’s plans fit in for the manufacturing space.

MM: How is the Australian energy industry tackling issues in terms of rising costs, security lapses and to some extent government policies?

Rod Naylor (RN): Our greatest insight is through the media and we hear the complaints about rising energy costs. We are starting to see some players in the industry looking for other solutions.

But, for me, things seem to be at a stage where we are waiting on government policy and direction and, if anything, we are probably a little frustrated that we are not getting inquiries from the industry that we might get looking for alternative and off-grid solutions to reduce the energy consumption.

So, we are not seeing great demand for the ideas of driving energy productivity, self-efficiency and even resiliency away from the grid, what we perceive is that the industry is still in a debate focused on energy supply.

 

MM: It has been reported in the mainstream news that if the energy crisis goes on, a lot of manufacturers won’t stay in Australia and start moving out. What are your thoughts on this?

RN: I have read the same thing and there are some interesting comments in the media about whether what we have now is an energy crisis or an energy market that is actually part of a global market.

If the latter is true, perhaps we do need to re-think our use of energy and the productive gain from energy.

So, if the reality is that energy is more expensive than it used to be because we’ve removed protectionist barriers, one response is the government may take is to replace those barriers with controls of gas supply and pricing.

But I see an opportunity at the other end, being a drive towards energy productivity. That answer is to be much more productive with the energy that we use, and to use it for economic purposes that are compatible with its globally competitive price.

We see an opportunity to focus on being more productive and therefore to reduce the actual energy consumption per unit of economic productivity.

If you can get twice as much value from it by being more productive, you have more chance to survive and prosper in a globally competitive energy market place.

MM: Is there an alternative option to solar energy, for example? Or do you need both?

RN: Integration is the key, but I do think that ‘energy efficiency first’ is not a bad mantra. Not having to make more energy is a better question to answer than whether you are better with gas, solar or wind [energy].

That’s not the answer to all things but I also like the idea of actually making a valid comparison of energy productivity directly against alternative energy sources in terms of cost, availability and impact.

There’s an interesting way to re-think productivity, as part of the energy mix rather than simply as an alternative. If we change our energy optimisation models to include energy productivity up against renewables, we can have a valid debate about what’s the most effective use of energy.

MM: Are there any new technologies – especially with the utilisation of the Internet of Things (IoT) – to improve energy efficiency?

RN: The adoption of smarter technology and approaches is a general theme for Veolia as it is for most companies.

We are very focused at the moment in water and energy services business, in terms of integrating a product we call ‘Hupgrade’ and the use of a optimisation platforms for Big Data to drive performance improvement.

Veolia is also very active globally in driving alternative contractual and commercial models that drive us towards performance-based contracting.

There are a range of technologies in several areas but one of the key things for us is a push towards performance contracting and alternative finance models, and selling the benefits of improvements in energy use outcomes rather than selling technology or equipment per se. That is a profound shift in thinking for Veolia that we will see much more of globally.

MM: With an uncertain market especially in the industrials, how is Veolia getting on and what opportunities do you actually see?

RN: We have built a large business in Australia with almost $1.5 billion in revenue and close to 4,000 people and we are well distributed across municipal and industrial markets.

A lot of our work over the last number of years has been focused in oil, gas and mining and we have been a very successful business in terms of environmental service in those markets.

These are very challenging markets but, with the return of commodities prices, we have seen an upturn in that market and new opportunities in mining especially, and oil and gas because in oil and gas, we offer some very complex and integrated solutions.

One of the examples is we operate all of the water recovery and salt management systems for Queensland Gas Company (QGS) now owned by Shell in Queensland.

So, providing that environmental management service – as the job of mining and producing oil and gas gets more complex and the need for environmental protection and efficiency becomes higher – we have seen an growing opportunity for Veolia in those more complex situations to manage those environmental footprints and to manage that energy-water-waste nexus.

MM: On the water waste management side of things, are there any up and coming technologies we can expect from Veolia?

RN: For the last 10 years, we have invested in waste water treatment plant resource recovery – looking at recovering energy, nutrients for food production, and even bio-plastics made from the enzymes made in waster water treatment plants.

Veolia has those technologies and, increasingly, we are seeing enthusiasm in the industry for [turning] organic waste to energy, which is getting a lot of support by utilising the assets of waste-water treatment systems to optimise and generate energy, and even importing additional organic load, where we are seeing a lot of technology on the engineering side.

What we are also seeing a lot of is Big Data used in energy and productivity optimisation. For example, we have a product caller ‘Waternamics’, which is a global collaboration with IBM geared toward the optimisation of water and waste-water cycles.

Most of our current clients are in municipal water but we also see that recovery or resources from the waste and water cycle is applicable to manufacturing and the food and beverage industry.

MM: Over the next three years, what are Veolia’s main aims in Australian manufacturing?

RN: There are a few things. There’s the opportunity to close loops and recover waste energy from process cycles. I think those opportunities lie in the food and beverage industry and part of the agricultural sector.

Another one lies in the complexity of mining, oil and gas operations. There is a lot of industry that is legislated for closure or for a substantial shift, which brings us two opportunities.

One of which is remediation by helping companies manage environmental liabilities whether they are detailing environmental impacts or even the demolition and close-down return of industrial sites to other uses, which brings in high-tech technology.

Where that also takes us is into the transformation and transition of industries to support communities and regions in the transformation in industry towards clean industry, energy productivity and a different energy economy.