The complexity of the energy environment has given rise to the need for tools to help businesses manage their energy usage and bills.
BY: VAL LEVESON
Energy management service providers have sprung up in the New Zealand marketplace amidst the green revolution. Kiwi companies seeking to cut power bills can look forward to between 5 and 10% energy savings for about 1% outlay in cost of implementing the system, according to one estimate.
The increasingly complexity of the energy market – with more energy retailers in the market than before coupled with the uncertainties brought about by the government’s Emission Trading Scheme – has forced businesses to be more aware of what they can do to save on their energy bills while using this to build a “green” angle into their products.
Collating your own power bills or energy bills – to see where savings can be made – can be time consuming. “It’s all very well to tell staff to cut energy usage – but to make a real difference, you need to measure what’s going on so you can put a proper plan in place,” says Gary Walker, general manager of Energy Pro Solutions. It can take a staff member about four or five days to collate all this information. However, by using a service provider like Energy Pro Solutions, it can take just half a day, Walker says. “This means that a person can spend those four or five days looking at and implementing plans to cut power consumption rather than just collating data.”
An added advantage to being part of a scheme like this is you can sell yourself as being green, he adds. “Our mission statement is that we’re helping the planet one kilowatt at a time.”
KNOWING PEAK USAGE
Walker works mainly with large organisations with energy bills of more than $100,000 a year. Companies that subscribe are provided with a software tool – Energy Pro – that checks that billing is correct and works with a company’s accounting system. There is also access to consultants.
He says using the system can reduce energy use by between 5 and 15%, the cost of the system comes up to about 1% of your energy bill. The system helps companies make better purchase decisions. Companies can chose which scheme is most appropriate by identifying their peak usage time based on profiles created.
Paul Chapman, Manager – Energy Management Services, says: “Internationally, energy prices have been trending upwards but are also increasingly volatile. In New Zealand the effects of volatile overseas commodity prices and foreign exchange rates have added more uncertainty among exporters at a time of escalating local energy prices due to concerns of supply security.
MORE RETAILERS THAN BEFORE
“Add to this the advent of new technologies such as smart metering and the inevitable, yet still frustratingly uncertain impact of the Government’s Emissions Trading Scheme for reducing greenhouse gas emissions, and you have a highly complex and rapidly changing energy outlook.” He says there are more retailers in the energy market today than ever before. Some of the new entrants are concentrating on niche markets and offering more than just energy related services.
“At the same time traditional, larger retailers are improving their billing systems and becoming more client focused. They are simplifying their tariff structures and their commercial contracts, while simultaneously offering more flexible deals which may include additional value added services such as energy audits and improved energy management information through websites and other data feeds.”
Chapman says that for the energy purchaser, these changes are a mixed blessing. Increased choice brings the promise of energy supply arrangements with a better fit to a company’s specific needs, but also brings the increased requirement to analyse and interpret a bewildering range of financial implications and to better understand their own energy needs and options.
That’s where service providers come in. Chapman says Energy Link helps consumers to obtain the best possible supply arrangements and then supports them with a number of ongoing cost management measures such as invoice checking, performance reporting, site benchmarking and periodic assessment of viable retailer offers.
Energy Link’s energy cost management services are collected under the Ellserve brand. The company produces the de facto industry standard electricity and gas price forecasts and has market modelling software in all of New Zealand’s major generators.
COSTS VS SAVINGS
Ellserve’s cost structure is related to the complexity and size of the client’s specific requirements. The bulk of customer needs can be met with the standard Ellserve service which is paid for by monthly subscription fee and typically falls below 1% of total annual energy spend. These costs always compare favourably with the direct energy and indirect administration costs saved by using the service.
As far as the service provider market is concerned, Chapman says there are a wide range of services available in some of the areas covered by Ellserve.
“Other services on offer cover energy management areas not specifically addressed by Ellserve, typically these relate to energy audits and technology-based energy management initiatives such as those designed to make energy savings from technological adjustments to industrial processes and machinery.”
Andrew Wilson, general manager of properties at IHC, says his organization has recently got an energy structure in place. “Now we have good energy reports in place, we can examine patterns of use in our various sites and categorise them. That way we can collate invoice information and see if anything is out of kilter as far as usage is concerned.”
- Having an energy management system in place can save money and aid marketing your product as “green”.
- You need to know the full picture of your power expenditure before you can do anything about it.
- Employing a service provider to assess your energy usage can help you choose the best options, helping your bottom line.
- There are more retailers in the energy market today than ever before – it’s important to know which is best for your needs.