Manufacturing a better energy strategy

Australia’s manufacturing industry is one of the nation’s most energy-intensive. It accounts for close to one quarter of Australia’s total energy consumption.

In every manufacturer’s energy strategy there are opportunities to reshape how and when they use power. By taking greater control of their energy usage, manufacturers can reduce energy costs and create new revenue streams.

Demand response is one of these opportunities. It rewards manufacturers for reducing their demand for power during peak demand periods.

If you’re thinking about doing demand response or not sure how it works, read on.

It’s easier than it sounds

It’s natural to think your business operations aren’t flexible, especially if you have productivity-based KPIs to meet. While demand response requires some flexibility around operations, it’s often easier to implement than it sounds.

You might not need to power down in full to do demand response. It can be as straightforward as temporarily or partially reducing your operations during periods of high pricing, which often only last a few hours. You could also choose to switch over to a backup generator instead, which may be cheaper to run than purchasing power from the grid.

Manufacturers that take advantage of demand response for even just a handful of hours per year can achieve major cost savings.

Do you know the real price of power?

If you’ve looked for alternatives to standard fixed-rate energy contracts, you might have come across the wholesale energy market. The wholesale energy market is dynamic. Prices change throughout the day, month and year and can be much lower than standard fixed-rates.

While you don’t need to buy wholesale power to do demand response, the benefits are greater if you do. That’s because businesses that buy wholesale can avoid paying peak prices by maximising operations during low price periods and scale back operations when prices are higher.

For example, you could choose to schedule daily operations like charging equipment when prices are low, such as the middle of the day or after the 4-7pm evening peak.

Responding means rewards

Demand response plays an important role in our energy system. It helps to balance the supply and demand equation to keep prices down and lights on.

To help businesses like manufacturers make a better business case for demand response, there are programs in place to incentivise you to reduce energy use when demand is high.

Some of these programs are state-based or national, like the Australian Energy Market Operator’s Reliability and Emergency Reserve Trader (RERT), which calls on businesses that can provide reserve energy on short and medium notice by powering down in return for financial rewards.

If you’re based in South Australia, you might also be eligible for Flow Power’s Building Intelligent Demand Response program, which is part of the South Australian Government’s Demand Management Trials Program. This program provides funding to manufacturers to cover set up costs and control systems to automate demand response processes.

To find out more about wholesale energy and how your business could benefit from demand response, visit the Flow Power website here.