Soaring Energy Costs shuts SA recycling facility: Five Ways manufacturers could possibly avoid the same fate
An Adelaide recycling business Plastics Granulating Services (PGS) has been forced to close due to rising energy costs and power bill increases of $100,000 over the past 18 months. According to managing director Stephen Scherer, 35 jobs were lost as a result of the closure.
The latest victims of a national energy market in crisis.
Earlier this month, Australian Textile Mills (ATM) requested voluntary redundancy applications from 20 of its Wangaratta factory staff.
The company cited rising energy costs as a major factor in this decision.
Rising energy costs amid power reliability concerns is a result of over-zealous retirement of coal powered plants and underinvestment in substitute generation capacity; this has created an imbalance of demand and supply in the National Electricity Market. The State of the Energy Market Report published by AEMO reported that more capacity was withdrawn from the market during 2011-2016 than was added through new investment over that period.
Consequently, wholesale energy costs have skyrocketed in the last 18 months and especially since the Hazelwood plant closure.
This coupled with spiralling gas prices and seemingly unreliable renewable sources, are shaping into a perfect storm with damaging effects to the economy.
If the last 18 months weren’t bad enough, large market energy costs are set to rise even further over the next 12 months starting July 1.
The 2018 Large Market Electricity rates – the contestable charge accounting for approximately 45% of the total amount on most energy bills – are expected to increase by 230% in South Australia alone, rising from 7.78 c/kWh to 25.64 c/kWh. While Victoria and the ACT will both see a 170% bump in large market electricity charges, rising from approx. 5 cents to more than 15 cents per KW hour. New South Wales is set to rise by 138%.
Unsurprisingly, industry and many other large energy users are facing an extremely difficult situation and will need to find a way to afford higher energy bills. Cost pressures and intense competition in manufacturing are well noted and even a marginal increase in energy costs will put a severe strain on cash flow and profitability.
Energy Efficiency Council’s CEO Luke Menzel broadcasted an alert and whitepaper following its National Energy Efficiency Forum in Melbourne on 28 June, stating
we need to urgently improve energy efficiency to make electricity secure and affordable and deal with rising gas prices’ if we are to ‘keep the lights on and manufacturing open.
Fortunately for manufacturers and other large energy users, there are at least FIVE ways to minimise the impact of soaring energy costs through energy efficiency.
Minimise Energy Costs and Bill Shock with these FIVE Energy Savings Strategies
- Get an Energy Efficiency Opportunity Assessment done by an energy efficiency expert – this detailed report establishes baseline performance and highlights areas for efficiency gains.
- Design and implement energy efficiency upgrades to plant and equipment – efficiency experts at a trusted energy services company can design and implement a holistic package of efficiency upgrades. The solution would typically involve energy savings that pay back the total investment over an agreed timeframe, usually 5 – 8 years for comprehensive projects. In most cases the savings in energy costs are greater than the costs to upgrade the infrastructure and with innovative financing many firms are experiencing positive cash flow, reduced energy costs and new equipment.
- Use energy analytics and energy management reporting for continuous improvement – engage an energy services company with dedicated account management and best in class analytics software delivering regular reports and recommendations for device-level efficiency enhancements.
- Have experts validate and manage your energy bills – consolidate multiple bills into a streamlined report and regularly verify all tariffs and charges; giving you peace of mind that your bill is fair dinkum and above board.
- Procure the most competitive energy rates – energy procurement experts at a trusted energy services company can analyse, review and negotiate the best deal in the market.
Using these five strategies will help minimise the impact of soaring power prices and help manufacturers and other large energy users become more efficient and more sustainable (environmental and business sustainability).
Ecosave is a 15 year experience energy services company with expertise in these five areas.
Ecosave’s holistic solutions and services come with guaranteed energy savings. Savings are guaranteed and services are rendered at fixed prices.
Read case studies on how Ecosave has helped large energy users in manufacturing, government, education, health care and more.
To discuss how Ecosave can help your business save energy, save money and save resources, book a complimentary consultation with one of our energy efficiency experts. To book your consultation, call Mark Krywienko now on 1300 55 77 64 or send an online message here.