Improving energy efficiency can reduce operating costs, improve equipment reliability and help businesses manage their environmental impact. However, not every energy-saving measure delivers a worthwhile financial return.
For small and medium-sized enterprises (SMEs), the challenge is deciding where to invest, what improvements are likely to deliver measurable benefits and how to avoid spending money on upgrades that provide little value.
An independent energy audit can help businesses answer these questions before committing capital.
Energy efficiency improvements range from relatively inexpensive operational changes to substantial investments in electrical infrastructure and equipment.
Common examples include:
The initial purchase price is only one part of the cost.
Businesses should also consider installation, commissioning, maintenance, equipment lifespan, downtime and any changes to operational requirements.
For example, replacing an ageing air-conditioning system may reduce electricity consumption, but the financial benefit depends on how frequently the equipment operates, its existing efficiency, maintenance costs and the cost of the replacement.
Similarly, installing solar panels may reduce electricity purchases, but the financial outcome depends on when electricity is consumed, electricity tariffs, export arrangements and the cost of the installation.
An upgrade should be assessed on its overall value to the business, not simply its advertised energy savings.
Reducing electricity consumption is often the most obvious benefit of an energy efficiency improvement.
However, electricity bills can include several different charges, and understanding these is important when evaluating potential savings.
Electricity consumption is generally measured in kilowatt-hours (kWh).
Reducing the operating hours of equipment or improving its efficiency can lower the amount of electricity purchased.
For example, replacing an inefficient motor or reducing unnecessary equipment operation may deliver savings throughout the year.
Some commercial and industrial electricity tariffs include demand charges based on the highest electrical demand recorded during a specified period.
A business may therefore reduce its electricity consumption without achieving an equivalent reduction in its electricity bill.
Conversely, managing peak demand can sometimes deliver meaningful financial savings even where total electricity consumption changes relatively little.
Understanding the applicable tariff is essential before estimating the financial benefit of an upgrade.
Energy efficiency improvements can also provide benefits beyond electricity savings.
Correctly selected and operated equipment may experience reduced wear, fewer breakdowns and lower maintenance requirements.
However, these benefits should be assessed realistically. An energy-efficient replacement is not automatically more reliable than the equipment it replaces.
Some improvements can enhance temperature control, production consistency, equipment availability or workplace conditions.
These benefits may be commercially significant, particularly where equipment failure or interruptions affect production.
In some cases, improved reliability or reduced maintenance costs may justify an investment even when the direct energy savings are modest.
Businesses commonly assess energy efficiency projects using a simple payback period.
This compares the initial investment with the expected annual financial savings.
For example, an upgrade costing $20,000 that delivers verified annual savings of $5,000 has a simple payback period of four years.
However, simple payback does not account for every factor affecting an investment.
A more comprehensive assessment may consider:
For larger investments, lifecycle costing or discounted cash flow analysis may provide a better basis for decision-making.
The appropriate level of financial analysis should reflect the size, complexity and risk of the proposed investment.
One of the most common mistakes businesses can make is investing in equipment before understanding how energy is actually used.
An energy audit examines energy consumption, operating conditions and opportunities for improvement.
Depending on the scope, this may involve reviewing electricity bills, inspecting equipment, examining operating schedules and undertaking measurements.
Energy audits conducted in accordance with the relevant parts of AS/NZS 3598 provide a structured approach to investigating energy performance.
The level of investigation can be selected to suit the business and its objectives.
An audit may identify opportunities that are not immediately obvious.
For example, a business considering a major equipment replacement might discover that changes to operating schedules, control settings or maintenance practices could achieve worthwhile savings at substantially lower cost.
An audit can help compare improvement opportunities based on their estimated costs, benefits and practical considerations.
This allows businesses to prioritise projects rather than treating every potential improvement as equally valuable.
Reliable measurements and operating information are important when estimating savings.
Without a suitable baseline, it can be difficult to determine whether an upgrade has delivered the expected result.
Where appropriate, monitoring before and after an improvement can provide evidence of its actual performance.
Equipment suppliers and installation contractors can provide valuable technical information about their products and services.
However, their recommendations may naturally focus on the equipment they supply.
Independent engineering advice provides an opportunity to assess alternatives without being tied to a particular product or installation.
This may include determining whether equipment replacement is necessary, assessing different technical options or identifying operational improvements that avoid capital expenditure altogether.
For businesses considering significant investments, this independence can be particularly valuable.
The objective should be to identify the most appropriate solution for the business, including situations where the best recommendation is to retain existing equipment.
Reducing unnecessary energy consumption can also reduce the environmental impact of business operations.
For organisations working towards emissions reduction targets, energy efficiency can be an important component of their strategy.
However, environmental and financial outcomes do not always align perfectly.
A measure that significantly reduces emissions may have a longer financial payback, while another improvement may deliver strong financial savings with relatively modest environmental benefits.
Understanding these differences allows businesses to make informed decisions based on their priorities.
Successful energy efficiency improvements begin with understanding the existing operation.
Before committing to a major upgrade, businesses should consider three questions:
1. What problem are we trying to solve?
Is the objective to reduce electricity costs, improve reliability, increase capacity, reduce emissions or address several issues together?
2. What evidence supports the proposed solution?
Are the expected benefits based on actual operating data, suitable measurements and realistic assumptions?
3. Is this the most appropriate investment?
Could operational changes, maintenance improvements or a different technical approach achieve a better result?
Answering these questions helps reduce the risk of unnecessary expenditure and improves confidence in investment decisions.
Energy efficiency is not simply about purchasing more efficient equipment.
It involves understanding how a business operates, identifying opportunities and making informed decisions about where investment will deliver the greatest benefit.
Some improvements may require substantial capital expenditure. Others may involve relatively simple changes to equipment operation, maintenance or control.
An independent energy audit can help businesses distinguish between these opportunities and develop a practical, evidence-based approach to improving energy performance.
Energy Engineers provides independent energy audits and engineering assessments to help businesses understand their energy use, evaluate improvement opportunities and make informed investment decisions.
If you’re looking to conduct an audit, speak to our team today
Power factor (PF) plays a pivotal role in the efficiency of electrical systems and therefore what SMEs end up paying on their energy bills. Understanding and correcting your PF is crucial for businesses looking to enhance their energy efficiency, reduce costs, and minimise their environmental impact.
In this article we explore what it is, why it matters, and how implementing corrections can benefit your operations.
PF is a measure of how effectively the electrical power is used to perform work. It is expressed as a ratio between the actual power (kilowatts, kW) that is used to perform work and the total power (kilovolt-amperes, kVA) that is drawn from the electrical system. A perfect score of 1.0 means that all the energy supplied by the source is being used effectively for productive work.
However, in many industrial settings, equipment such as motors, compressors, and transformers often operate at less than ideal power factors—typically around 0.8 or lower. This inefficiency leads to higher power consumption and increased charges on electricity bills because utilities must generate and transmit more power to achieve the same amount of useful work.
A low factor indicates that you’re not efficiently using the electrical power you draw from the grid, leading to several disadvantages:
Factor correction involves adjusting the electrical systems to improve the ratio of working power to total power. This can be achieved by several means:
Improving your factor can yield substantial benefits for any business:
PF Correction is a crucial yet often overlooked aspect of energy management. By understanding and improving equipment state, you can enhance your electrical system’s efficiency, reduce costs, and make a positive impact on the environment.
Whether through equipment / appliance replacement or installing corrective tech, the benefits of addressing issues certainly make a solid business case. We encourage SMEs to take stock of their current scenarios and are here to help.
If you want to take the first step, contact us for a free consultation and start making an impact on your bottom line through energy efficiency.
In today’s energy-conscious world, managing electricity costs is crucial for businesses striving for both economic and environmental sustainability. One significant component of energy bills in Australia—and the bane of any business—is peak demand charges.
These charges are applied based on the highest rate of electricity usage during specific periods and can substantially inflate energy costs. Understanding and managing these charges is therefore pivotal to optimising energy expenditure and boosting operational efficiency.
Peak demand charges are incurred when a facility consumes a large amount of power in a short period, typically during high-activity hours of the day. These charges are levied to help utilities cover the cost of maintaining enough power supply to meet the maximum demand across their network. Essentially, utilities need to ensure they have sufficient infrastructure to support peak usage, which includes maintaining and operating power plants and the grid itself.
In Australia, these charges can significantly impact the energy bills of businesses. If you’re an SME – particularly in manufacturing, retail, food and beverage – you’ve likely incurred high power usage during peak times. There’s no denying that getting a peak demand charge on your energy bills can 1) raise the heart rate, and 2) put a real strain on your cash flow.
The key to mitigating these charges lies in understanding how they are calculated. Peak demand is typically measured in kilowatts (kW) and is calculated over a specific billing period by identifying the highest 15-minute or 30-minute average usage recorded by the meter.
Several strategies can be employed to reduce peak demand charges, each involving a shift in how and when energy is used. Here are some of the most effective:
This involves scheduling high-energy-use activities during off-peak hours. For instance, running heavy machinery or production cycles overnight or early in the morning can help avoid peak charges.
This strategy includes using alternative energy sources like generators or battery storage during peak periods. By supplementing your energy supply with these sources, you can avoid drawing excessive power from the grid during costly peak times.
Implementing energy-efficient technologies can reduce your overall energy consumption and lower your peak demand. Upgrading to LED lighting, energy-efficient motors, and HVAC systems are typical examples. It may seem simple but reviewing the power consumption star rating of appliances and investing in the more efficient options will pay off in the long run.
Participating in demand response programs can also offer financial incentives. These programs involve reducing your power usage during peak periods in response to requests from your energy provider, who may offer lower rates or other benefits in return.
Consider a local shopping centre in Brisbane. Centre management regularly finds that it is hit with substantial peak demand charges. This is due to its high energy usage during the day, particularly in the late afternoons and evenings.
In response, the centre management conducts an audit of its energy usage. The energy audit finds that implementing a combination of peak shaving and load shifting strategies can reduce charges significantly.
Firstly, the centre reschedules some of its maintenance operations that require significant power like HAVAC servicing, to off-peak hours. They also invest in the installation of a battery storage system, alongside extra solar panels on the roof to store electricity from the grid during off-peak hours and from their rooftop solar panels during the day.
This stored energy is then used during peak periods, significantly reducing the amount of energy drawn from the grid during costly peak times.
As a result of these strategies, the shopping centre sees a reduction in peak demand charges by 25% within the first year, alongside an overall decrease in energy costs by 18%.
As you may know – this kind of saving on energy alone can really transform a business’ bottom line. It just takes an investment of time and capital. But it all starts with taking stock of your current state – identifying low hanging fruit and making a business case for the more capital-intensive changes.
Peak demand charges represent a crucial aspect of energy bills that can be managed effectively with the right strategies. By understanding what peak demand charges are, why they are levied, and how they are calculated, businesses can take informed steps to reduce their impact. Strategies such as load shifting, peak shaving, and energy efficiency improvements are not just cost-effective; they also contribute to a more sustainable energy consumption model.
For SMEs in Australia and beyond, actively managing energy usage during peak times is no longer just an option—it’s a necessity for ensuring competitive advantage and operational efficiency in an increasingly energy-aware market. We provide tailored advice and solutions to SMEs in South-East Queensland to help them navigate their unique challenges and optimise their energy strategies effectively.
If you’re interested in a free initial consultation that can get your energy usage on the right track – contact us today.
Delve into how energy audits and investments in energy efficiency projects can leverage Australia’s recent pledge at COP28 to create a more sustainable and economically viable future.
The recent COP28 climate summit has marked a pivotal moment for global environmental policy, with Australia taking a significant step forward. As reported by The Guardian, the nation has pledged to triple its global renewable energy capacity and double the rate of energy efficiency improvements by 2030. This ambitious commitment not only aligns with global sustainability goals but also opens a new chapter for businesses in the energy sector.
Australia’s bold pledge is a testament to the country’s dedication to combating climate change. This commitment to significantly enhance renewable energy capacity and improve energy efficiency is not just a governmental promise. It’s a call to action for businesses and industries nationwide to raise standards in terms of energy consumption (and education).
The pledge reflects a global shift towards renewable energy and underscores the critical role of energy efficiency in achieving these ambitious goals.
Energy audits, is a specialty of Energy Engineers, energy audits will be even more crucial in to make the most of any formalised programs that come over the coming years. These audits provide a comprehensive assessment of energy use, pinpointing inefficiencies and areas ripe for improvement.
Energy audits serve as a roadmap for businesses to reduce consumption and align with COP28’s objectives. They offer a clear path to not only meet regulatory standards but also to embrace a more sustainable operational model. Which means it’s highly likely that opportunities for co-funded audits or grants will become more accessible for SMEs.
Investing in energy efficiency projects is more than a compliance measure; it’s a strategic business decision. These projects can range from simple upgrades like LED lighting or process changes to more complex system overhauls, all aimed at reducing energy consumption and costs.
The long-term benefits of these investments are twofold: they contribute to environmental sustainability and offer significant cost savings. Plus, if the objectives of Australian government’s pledge are to be achieved, there is likely to be significant incentives for organisations who undertake energy efficient practices. As well as significant penalties or deterrents for those that don’t follow suit.
So investing in energy efficiency projects essential for businesses to remain competitive and responsible in a rapidly evolving energy landscape. The message is clear – act now and save or fall behind at significant expense.
The COP28 pledge is not just a governmental commitment; it’s a catalyst for business opportunities in the energy sector. This pledge is likely to increase demand for energy-efficient technologies and services, offering a lucrative market for businesses in this space. This may lead to some opportunistic ‘cowboys‘ entering the industry, so it will be important to partner with a reputable energy consultant.
But, this pledge also look set to benefit SME through increased funding, grants and support for energy efficiency projects as investors and the government look to back environmentally conscious initiatives.
Adapting to new energy efficiency standards may present challenges for some businesses – in cost, effort, and time to value. However, these challenges also bring opportunities for growth and innovation. New ways of working, new energy-efficient equipment, and government funding nationwide are sure to follow.
Businesses can better navigate these changes by staying informed about new technologies, leveraging government incentives, and seeking expert guidance. A first step, as we always say, is to conduct an energy audit. This will ensure organisations invest in the right areas and not only comply with new / future standards but thrive.
If you’re ready to take your business to the forefront of energy efficiency and sustainability, Energy Engineers is here to help. Contact us today to get started.
In this article we discuss how to avoid energy auditing cowboys and access proper, qualified advice.
Energy audits play a crucial role in helping businesses identify opportunities to improve energy efficiency, reduce costs, and enhance sustainability. However, the effectiveness of an energy audit largely depends on the expertise, qualifications and motives of the auditor conducting the assessment. In recent years, the rise of uncertified or unlicensed energy consultants – often referred to as ‘cowboys’ – has created challenges for businesses seeking reliable and accurate energy audits.
These so-called cowboys lack a proper understanding or care for the established energy audit standards in Australia, putting businesses at risk of receiving inaccurate or misleading information. There have been cases where a cowboy had installed energy saving equipment that did save energy, but the cost was so high, it never payed itself back.
So how can you spot the signs of an energy auditing ‘cowboy’ and avoid the potential consequences of engaging their services? Here are few telltale signs.
Certification from recognized organisations, such as the Energy Efficiency Council(EEC), or better still the Association of Energy Engineers (AEE) demonstrates that an energy auditor has undergone rigorous training and adheres to the highest industry standards. Licensing requirements for energy auditors in Australia ensure that they possess the necessary skills and qualifications to conduct professional and accurate energy assessments to conduct professional and accurate energy assessments.
For example to become qualified as an Certified Energy Manager, a Bachelor’s Degree in Engineering is such a requirement to start the course. A ‘cowboy’ may not have these certifications or licences, or any relevant degree which is a significant red flag.
Experience is a crucial factor in determining the quality of an energy audit. A reputable energy auditor will have a strong portfolio of work, showcasing their expertise and ability to deliver tangible results. Cowboys, on the other hand, may have limited or no experience in conducting energy audits. Or only offer one solution, such as LED lighting.
Verify the auditor’s experience by assessing their portfolio, case studies, and client testimonials. Reach out to references provided by the auditor to confirm their claims and gauge their level of expertise.
Reputable energy auditors understand the importance of setting realistic expectations for energy efficiency improvements and potential cost savings.
Cowboys, however, may overpromise results, offering unrealistic guarantees in an attempt to secure business. Be cautious of sales pitches and proposals that seem too good to be true, as they likely are.
Dont be taken in by the free audit by a supplier of say power factor correction units, this may not be an holistic audit but rather a power factor assessment, this is only a small part of an energy audit.
Thorough and accurate reporting is crucial to the success of an energy audit, as it provides businesses with the information necessary to make informed decisions about energy efficiency upgrades.
Cowboys may provide insufficient or incomplete reports, lacking the necessary detail to help businesses identify and prioritise energy-saving opportunities. Recognise the signs of inadequate reporting, such as missing data, lack of analysis, or unclear recommendations.
Cowboys’ lack of knowledge and expertise can lead to inaccurate audit results and misguided recommendations. These inaccuracies can have severe financial implications, as businesses may invest in energy efficiency measures that don’t deliver the expected results.
Furthermore, incorrect recommendations may negatively impact business operations, leading to inefficiencies and increased energy consumption and unrequited capital expenditure. .
Engaging the services of a cowboy can result in non-compliance with regulatory requirements, which may lead to legal and financial repercussions.
Businesses are responsible for ensuring that their energy audits meet the necessary standards, and failure to do so may result in penalties or fines. Additionally, engaging a cowboy can damage your business’s reputation, as clients, partners, and stakeholders may question your commitment to sustainability and industry best practices.
Begin by utilising industry resources and directories, such as the Association of Energy Engineers or Energy Efficiency Council, to identify certified energy auditors in your area.
Also research they are in your area, in Queensland there are only few Certified Energy Managers, but they are worth your time. Check local government resources to verify the licensing requirements for energy auditors and confirm that the auditors you are considering meet these criteria.
Leverage your professional network and industry associations to seek recommendations for reputable energy auditors. The experience of others in your industry can provide valuable insights into the quality and professionalism of potential auditors.
Utilize social media groups and online forums to ask for recommendations and gather feedback on specific auditors.
Request proposals from multiple energy auditors to evaluate the scope of services, pricing, and timelines. This comparison will enable you to identify the best fit for your business’s needs and budget.
Assess the quality of communication and professionalism demonstrated by each auditor throughout the proposal process, as this can be indicative of their overall approach to conducting an energy audit.
Before engaging an energy auditor, review their portfolio, case studies, and client testimonials to assess the relevance and success of their past work.
This will give you an idea of their expertise in your specific industry and their ability to deliver tangible results. Confirm the authenticity of client testimonials by reaching out to the references provided, if possible.
Hiring a certified and experienced energy auditor is essential to ensure that your business receives accurate and reliable information about its energy usage and efficiency. By following the steps outlined in this blog, you can avoid energy auditing ‘cowboys’ and find a reputable professional who will help your business achieve long-term energy efficiency and cost savings.
We think you’ll find Energy Engineers meets all the criteria (and we’re definitely certified!). So if you’re considering an energy audit, or don’t yet know where to start, contact us today.
Small and medium-sized enterprises (SMEs) are always looking for ways to reduce their costs and improve their bottom line. Energy consumption is a necessary (but controllable) cost that is often ripe for improvement.
By implementing energy-saving measures, SMEs can reduce their energy consumption and lower their energy bills whilst contributing to a more sustainable future.
Here are 6 Tips from the Energy Engineers team to take impactful action and save on energy costs:
The first step to save on energy costs is to conduct an energy audit. An energy audit is a comprehensive assessment of your energy usage and equipment performance, designed to identify areas of improvement and energy-saving opportunities.
By understanding how and where your energy is being consumed, you can identify areas where you can reduce your energy consumption and lower your energy bills. There are many companies that provide energy audit services, and you can also conduct a basic energy audit yourself using free online tools. Though the tools are only as good as the person filling in the data.
Lighting can accounts for a significant portion of a business’s energy consumption. Upgrading to energy-efficient lighting, such as LED lighting, can help to reduce energy consumption and lower your energy bills. LED lighting lasts longer and consumes less energy than traditional lighting, reducing maintenance costs and energy bills.
Though the majority of lights are LED these days there are many different types of qualities and more efficient LED to be aware off these days.
Heating, Cooling, and air conditioning (HVAC) systems can also consume a significant amount of energy. By optimising these systems system, you can reduce energy consumption and lower your energy bills.
Simple measures such as cleaning and replacing air filters and adjusting the thermostat, can help to improve the efficiency of your heating and cooling systems.
Another gain of optimising these systems is wasted energy recovery. With the right systems in place you can reconvert energy into use, eliminating the need to draw more costly power.
Switching to renewable energy sources, such as solar power, can help to reduce your energy consumption from the grid and so lower your energy bills. Though it does not lower your energy usage, and if your usage is outside of the sunhours it might not help much.
Solar power is becoming increasingly affordable, and there are government incentives available to businesses that install solar panels.
If you’re considering solar – make sure to reach out to our sister company about tailored renewable solutions.
Many businesses leave equipment and appliances running when they are not in use, contributing to unnecessary energy consumption and higher energy bills.
By powering down equipment and appliances when they are not in use, you can reduce your energy consumption and lower your energy bills.
This simple behaviour / process change has a minor, but compounding, effect on reductions to overall energy usage.
Implementing an energy management system can help you to monitor and control your energy consumption, identifying areas where you can reduce your energy usage and lower your energy bills.
An energy management system can also help you to identify equipment and appliances that are consuming excessive amounts of energy, allowing you to take corrective action.
SMEs can make significant savings on energy costs by implementing any of the above energy-saving measures. To make maximum impact it’s important to understand how each would contribute to your situation. This helps you prioritise and achieve optimal ROI.
That’s why an energy audit is typically the first step in any energy efficiency project. You’ll be able to identify the low-hanging fruit and build a logical roadmap for improvement.
If you’re a Queensland SME looking for energy efficiency advice (or know a business in need) reach out to Energy Engineers team for an obligation free discussion.
Have a question? Want to organise an energy efficiency audit? Simply fill in our form and we’ll be in touch soon.
Have a question? Want to organise an energy efficiency audit? Simply fill in our form and we’ll be in touch soon.
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