Gippsland Water Case Study
About Gippsland Water
Gippsland Water was looking to improve control over its energy expenditure in light of predicted rising future costs and an obligation to meet an emissions reduction commitment to the Victorian State Government. The water sector is responsible for 24% of the Government’s annual emissions, making it the largest single sector contributor to its emissions.
On 14th March 2018, the Hon. Lisa Neville, State Minister for Water, issued a “Statement of Obligations (Emission Reduction)” to several Victorian water authorities, requiring them to deliver net zero emissions by 2050 and interim emissions reduction targets by 2025.
To meet its obligations, Gippsland Water set a target of a 10.7K tCO2e reduction in its emissions by 2025. This represented a 23.7% reduction in its emissions at the time. Gippsland Water identified energy usage as the biggest source of its emissions and determined that the reduction target could be achieved by reducing energy usage by 20%, as well as sourcing 20% of its energy from renewable sources.
Gippsland Water was looking to gain access to energy data and develop insights to give it an accurate view of its current energy usage and provide an evidence base to support broader cultural change within the organisation.
Key considerations for Gippsland Water:
Gippsland Water wanted to continue to prioritise the delivery of service to its customers while developing an objective approach to managing energy tradeoffs.
Gippsland Water needed strategies to more effectively balance appropriate expenditure on energy management with other capital expenditure priorities.
Gippsland Water has a 10.7K tCO2 emissions reduction pledge to achieve by 2025. Achieving this target was a critical requirement of its energy management strategy.
The ERM Approach
ERM Power was engaged to assist Gippsland Water to identify major streams of opportunities to pursue and develop a comprehensive energy strategy and roadmap with the objective of improving energy costs within a 3 year period.
ERM Power was tasked with facilitating an energy strategy process that addressed the following:
- Defining 3 to 5 year targets for reductions in electricity costs, electricity volumes and emissions
- Identifying major initiatives to pursue with a focus on Gippsland Water’s top 30 sites, which were responsible for 83% of Gippsland’s energy consumption
- Modelling and analysis to assess the impact of current and potential future initiatives
- Determining the CAPEX requirements for each initiative with the goal of achieving a sub-5 year simple payback on the portfolio of initiatives
- Developing and implementing an energy management system to track progress towards annual targets, including a dashboard of key performance indicators and assessments of energy productivity relative to water flows at key sites.
ERM Power's three-phased Advise methodology approach:
ERM analysed the current state of energy consumption and established the foundations required to develop a future state energy strategy.
This involved defining project scope, site visits and discovery workshops to understand business operations and energy requirements.
A comprehensive energy strategy and roadmap was then developed, turning the insights and assessment into clearly defined actions.
This stage involved prioritisation, input workshops, business case development and the identification of potential delivery partners and an implementation plan.
ERM then worked to define future state energy targets and requirements and identify potential opportunities to improve energy sustainability and reduce costs.
This involved co-design workshops to define future energy state and a feasibility study to understand the practicality of available options.
ERM Power and Gippsland Water site operators and engineers developed seven priority initiatives for the organisation to consider. All priority initiatives were incorporated into Gippsland Water’s board-approved Energy Management Strategy. Highlights of these priority initiatives included:
- Development of an approach to data for decision-making at four key sites, by gaining access to energy data and developing insights that would support broader cultural change
- Reduction of Gippsland Water’s energy costs through demand response. ERM’s strategy included reconfiguring large back-up diesel generators to operate parallel to the electricity network. Demand response enables the automated curtailment of electricity usage across its water network and large sites at times of peak demand. Demand response works to create new revenue streams for the organisation, as Gippsland Water is paid to run their back-up generators and curtail electricity usage at times of high wholesale electricity market price events, or when requested by the local electricity distribution network operator
- Delivery of a scaled LED lighting program. Gippsland Water had upgraded to LED lighting at its head office but hadn’t upgraded its depots. By replacing inefficient existing lighting across 25 sites, ERM discovered the potential for Gippsland Water to materially reduce emissions
- Development of a lower cost approach to delivering ground-mounted solar projects. Gippsland Water’s previous capital costs for ground-mounted solar were uneconomical for the organisation. ERM developed an approach to materially reduce the payback periods of ground-mounted solar, to enable this asset type to meet internal investment hurdle rates and unlock further projects.
ERM experts uncovered $32,500 in savings through Network Tariff Optimisation.
ERM identified lower cost approach to ground-mount solar
Delivered 25 potential site upgrades
ERM Power’s high level of expertise streamlined a logistically complex process for Gippsland Water. ERM Power was able to provide the organisation with detailed recommendations on how best to deliver key energy initiatives within six months of commencing strategy development and assist in delivering projects and savings.
In addition, through Network Tariff Optimisation, an analysis that ERM runs three times per year for optimising tariffs, ERM Power’s energy experts were able to uncover $32,500 in electricity savings for Gippsland Water. ERM Power also established a process for Gippsland Water to effectively measure and verify their energy efficiency advances through the implementation of ERM’s Greensense View software.
Greensense View was set up to track interval water and electricity data from 30 key Gippsland Water sites, as well as enable simple portfolio reporting across their suite of over 400 sites.
The combination of water and electricity data into a single tool provides simplified baseline performance monitoring capability, enhancing and simplifying Gippsland Water’s ability to compare sites and address performance issues.
ERM Power’s unique, holistic approach to energy assessment successfully positioned Gippsland Water to be able to move towards implementing key energy initiatives within six months of commencing the initial assessment.
Download the Gippsland Water Case Study
ERM Power’s advisory team assisted Gippsland Water to develop a plan to gain control over energy expenditure and to meet emissions reduction commitments. Download the Gippsland Water case study now to find out more.