Energy assessments identifying big savings for big customers
ERM Power is identifying an average 27% potential savings on electricity bills for business customers undertaking an energy assessment – equating to an average $144,000 of potential savings per annum, per assessment. 
EGM Energy Solutions Megan Houghton says many of the large companies that ERM has worked with are unaware these savings are possible.
“The most obvious thing we’ve noticed is that most businesses are preoccupied with their day-to-day tasks and targets, and they don’t necessarily have the internal capabilities or resources to know when an energy management opportunity exists.
“Companies want to save money and remain competitive. They don’t want to waste money. What they don’t always recognise is that energy is probably one of the biggest controllable variable costs they can reduce to give them the easiest way to improve their bottom line and reinvest savings back into their businesses.”
Excluding raw materials, energy typically accounts for between 10-20% of the total operational cost of a site, says Ms Houghton.
“It’s often difficult to cut down labour and other operating costs. Energy cost reductions are much easier. It’s not unusual for us to identify potential savings of greater than 20% through energy productivity measures. It definitely has a big impact.”
Companies commonly make operating decisions based on immediate functional requirements, but this can be detrimental to their energy efficiency and their bottom line.
“If a company is making changes to their equipment or the way they’re running it, not for energy management, but for the fastest way to get it up and running, it can have a very negative impact on their energy efficiency.
“We’ve seen this with customers who update a piece of equipment without considering the overall system impact. It can be highly inefficient and very costly.”
It’s through energy assessments that ERM Power reveals the things customers can do differently. Ms Houghton explains that when customers make investment decisions for their site, they should consider energy efficiency and lifecycle costs as part of the operating requirement decision.
“If a company is upgrading an important piece of equipment, the upfront capital cost of that is only a few percent of the overall lifecycle cost – with maintenance and energy representing the majority of the total lifecycle cost.”
Another element that often goes unnoticed is that the solutions identified through an assessment can often be quite simple yet still result in significant savings and energy consumption reductions.
Payback periods can vary depending on the sophistication of the solution, but even simpler solutions that require a small capital outlay can deliver significant savings and short payback periods, says Ms Houghton.
“An assessment isn’t just about lighting or solar, it also focusses on the simple things that a customer can do right away. A lot of these opportunities are about getting in there and understanding what a customer needs and comparing that to what they’re currently using.
“It’s then about changing the way they operate their equipment to match the demand of their services. Motor control and changes to software and building management systems or strategies can be quite straightforward solutions that result in a healthy return.”
Unsurprisingly, the most common feedback from customers is that energy assessments reveal elements of their operations that would have continued to go unnoticed.
“Because customers get into business-as-usual mode, they don’t see how things could be done differently. A lot of the time, companies don’t have the resources available to examine the way they’re using energy, and it’s only when you break it down into the individual equipment level that you can see the comparison and start to make sense of your operations and the energy data. Energy data isn’t always straight forward for companies not operating in the industry.
“We put loggers in, we measure all of these loads, we do an energy balance of the site and we start asking questions. When we do these things, it helps customers work out where the issues are and that helps customers realise potential improvement opportunities.”
The information gathered from an energy assessment can also be highly beneficial to customers and can even improve their productivity, says Ms Houghton.
“With data loggers we try to understand how things are used over the weekend or when equipment is not needed. Often, having that information can drive behaviour changes.
“In turn, customers become more conscious of what they actually use and that can have a positive impact on the way things run.”
1 Potential savings based on 26 assessments completed since June 2017, over a range of Commercial and Industrial customers, with the annual electricity spend between $25,000 and $3,000,000. Actual savings will vary depending on energy solution measures implemented, changes in the amount and pattern of energy consumption and changes to energy rates and tariffs of individual customers.
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About ERM Power
ERM Power is an Australian energy company operating electricity sales, generation and energy solutions businesses. The Company has grown to become the second largest electricity provider to commercial businesses and industrials in Australia by load*. A growing range of energy solutions products and services are being delivered, including lighting and energy efficiency software and data analytics, to the Company’s existing and new customer base. The Company operates 662 megawatts of low emission, gas-fired power stations in Western Australia and Queensland.
* Based on ERM Power analysis of latest published information.