Implementing energy efficiency opportunities permanently reduces energy usage, lowering total demand and consumption charges. This results in a downward shift in your demand profile, and provides a cost effective way to reduce the cost of network charges.

Source: Marsden Jacob Associates' analysis (2011)

Identifying energy efficiency measures requires a detailed assessment of your company’s energy use. This will provide an understanding of how energy is used within your operations, and identify opportunities to improve energy performance. Analysis conducted can also assist to identify other demand side opportunities.

Energy efficiency opportunities can involve investing in new technology, processes and practices that reduce the energy intensity of business activities.

It is important to check the implications of reducing overall usage within existing contracts, and when negotiating future contracts.

For example, some end users have ‘take-or-pay’ clauses in their energy contract. This means that they are obliged to purchase a certain minimum amount of energy. If they reduce their consumption below that point, they may still have to pay for it.

Large energy users also usually pay a capacity or demand charge as part of their network tariff. Typically, this is levied as a fixed charge on the retailer’s energy bills. In most circumstances, a user who reduces consumption will also reduce demand. However, this may not lead to a reduction in the capacity or demand charge , until that charge is due for review, which may be once every 12 months..

From time to time, circumstances may arise where the network service provider faces constraints in the local network. In this instance, the network service provider may be willing to amend the capacity or demand charge earlier than specified, or even pay for demand side response if this helps reduce network constraints.

Industry Case Study – Oxford Cold Storage - How energy efficiency can reduce network costs

Oxford Cold Storage has a policy of funding new energy efficiency initiatives that achieve a payback in two years or less.

Energy efficiency measures have included:

  • increasing the building shell thermal performance of new storage facilities by using under-slab insulation and increased building shell insulation;
  • greater protection for loading dock doors and installation of ‘air-lock’ door-closing systems that substantially reduce air loss during loading and unloading operations;
  • more efficient LED lighting systems;
  • installation of ‘voltage optimisation’, which works with ‘induction loads’ to keep voltage at an optimum level;
  • power factor correction equipment; and
  • variable speed compressor motor controls

Implementing energy efficiency measures has enabled the company to reduce their existing maximum demand of 5,616kW to around 5,200kW with their network provider. This reduction will save the company approximately$31,850 annually.

Oxford Cold Storage see the Energy Savings Scheme in New South Wales as an opportunity to implement additional initiatives with payback periods out to four years. Implementing these additional initiatives, which the company has already identified, could achieve an additional 15–20% energy savings.

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