Energy used to be seen as a relatively low, stable expenditure for companies, but due to steadily rising costs now has a significant impact on profits. ClimateWorks Australia’s new report, Energy Management and Company Competitiveness, finds that improving energy performance can reduce the increase in energy costs by about half for the most affected companies.

The report builds on previous analyses conducted by ClimateWorks Australia using data from the Energy Efficiency Opportunities program (now closed). The previous research showed that while energy efficiency improvements were being identified and implemented by many companies, much more could be done. Limited capability and low motivation were identified as two major factors impeding better energy performance.

The latest research used these findings to develop a methodology to assist companies to gain a deeper understanding of energy risks and the opportunities associated with energy performance.

‘For over 70% of these companies, energy costs are greater than 10% of their EBITDA [earnings before interest, taxes, depreciation and amortisation],’ said Amandine Denis, ClimateWorks Australia’s Head of Research.

‘The report provides a five-step assessment methodology for companies to help understand their energy costs, exposure to future energy price rises, how much more energy can be saved and the impact of those savings on financial performance.’

The methodology was applied to a sample of 50 large industrial companies to assess the magnitude of risks and opportunities across sectors. The findings are presented in the report.

See other EEX articles on ClimateWorks Australia’s ‘Tracking Progress towards a low carbon economy':