How SMEs Can Manage and Reduce Energy Consumption

solar panel - energy consumption

The energy crisis is seeing record-breaking energy prices, placing increasing pressure on energy consumers across the market from individual homes to SMEs and large corporations to manage and reduce energy consumption. The Australian Energy Market Operator (AEMO) alongside the Australian government are urging homes and businesses to try to conserve power and switch off unnecessary lights and appliances to ease the pressure on the market and avoid blackouts.

A combination of factors is driving this energy crisis such as Russia’s war with Ukraine, Australia’s ageing coal infrastructure, changing and extreme weather events, plus Australian “gas and coal companies charging very high prices for their products because that’s what they can sell them for into international markets.” Tristan Edis, Renew Economy. The AEMO is so concerned it has taken the unprecedented step of freezing the east coast wholesale energy market to allow them to control supply and prevent generators from withdrawing their availability. To dig deeper into the stats, check out this insightful explainer in Renew Economy.

So how can SMEs manage and reduce energy consumption to help mitigate these cost pressures?

Here we explore options available for businesses to manage and reduce their energy consumption, including how to create energy efficiencies, save costs for themselves and others, plus we identify a range of government programs including grants available to support business with their costs.

Manage and Reduce Energy Consumption: Understanding Energy Usage

Assessing energy usage not only refers to understanding the amount of energy consumed, but also when and how it is being used; what energy is charged and how; and what the available options are to reduce it. Businesses can gain a granular understanding of their energy usage through detailed data analysis, allowing them to identify energy use patterns along with seasonal and daily variances. This enables them to focus their efforts on actions that bring the most cost-effective outcome.

Practical and tangible solutions do not necessarily mean high upfront capital costs. Some of the most common energy management solutions include:

  • Energy management training: Training key personnel within organisations can help overcome the lack of knowledge in the underlying principles of energy management, improve in-house skills, and shift energy-consuming behavior. Training will also provide SMEs with tools to assess their high-level energy needs, and the avenues to seek more specific advice when needed.
  • Load-shifting: When possible, varying the time of energy consumption, i.e., when equipment is operated, can better align with a lower cost tariff or maximise solar self-consumption. For businesses with more complex energy consumption, load-shifting can have a major impact when it reduces peak demand and the associated costs.
  • Equipment maintenance and upgrade: General maintenance of equipment such as pumps, hot water systems, air compressors, chillers, etc. can significantly reduce billing costs. For medium-sized businesses, submetering will provide further insights into energy consumed by critical equipment.

Energy Grants and Funding

Companies looking to implement cost-saving measures and transition to renewable energy options should explore available federal government and state grants. These grants can provide invaluable financial support and incentives to offset the initial investment costs associated with renewable energy projects. By leveraging these grants, businesses can not only reduce their environmental footprint but also achieve significant long-term cost savings. Access the Australian Government Grants and Funding page here.

Energy Measurement and Verification

The relevance of measurement and verification processes (M&V) among SMEs is often overlooked. Measuring energy savings goes beyond metering. The ability to track energy saved over time by the implementation of energy efficiency projects relies on both accurate measurement and repeatable methodology. There are many variables that can affect the energy consumption in a business, such as weather, unusual events, number of employees, leakages, production faults, and many others including the abrupt and disruptive external pressures we are currently seeing affecting the local and global markets. Consequently, energy savings can be erroneously calculated when ignoring any of those variables.

M&V protocols provide certainty on the amount of energy saved as results are real and verifiable. M&V help to obtain useful data to share across all stakeholders, prepare business cases for project funding such as grant applications, participate in existing energy efficiency schemes as well as keep a transparent record of the reduced emissions from energy efficiency.

The Overlooked Benefit of Energy Efficiency in Businesses

The positive impacts that building energy efficiency and energy management capability in the business sector have on the residential sector are often overlooked. Beyond individual savings in energy costs, businesses’ ability to improve their energy efficiency is not only a key element in reducing GHG emissions but can also play a role in stabilising energy prices, with significant implications for vulnerable customers such as low-income and remote households.

The underlying principles of energy management allow businesses to take control of the entire energy cycle across their operation. This includes from where energy is sourced, to how much and when it is used, which ultimately improves network stability by helping balance electricity supply and demand. Considering network charges makeup approximately 40-55% of energy bills, reductions in both overall and peak energy demands within the electricity network will reduce the associated costs passed on to consumers, and enable the ongoing delivery of clean, affordable, and reliable energy.

Need Advice to Manage and Reduce Your Energy Consumption?

We provide a range of specialised services for business to manage and reduce energy consumption and promote energy efficiency such as assessing energy efficiency and productivity, and conducting energy audits and energy management training. We also provide guidance and advice to access federal and state government grants and funding. Get in touch to learn more.

Also check out our article Five Ways to Reduce Your Carbon Footprint Through Energy Management – Ndevr Environmental Consulting