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Q&A: How Can Australian Manufacturers Take on Efficiency?

The New South Wales (NSW) Government in Australia has announced $16.7 million in funding to help manufacturers drive the value of their energy efficiency programs. The objective of the program is to help manufacturers install energy efficient equipment and energy metering and improve their manufacturing processes. In a brief interview on this new opportunity, Australian energy efficiency expert, Paul Lang, answers key questions we hear from manufacturing clients regarding the trend toward energy efficiency upgrades and how to take advantage of the new grant opportunity.

  1. What are the key trends in the Australian energy market today, and why the big focus on energy efficiency among commercial and industrial (C&I) companies?

The closure of two coal power stations in recent years resulted in a dramatic spike in wholesale electricity prices at a time when natural gas prices were also increasing due to a tightening gas market. This has led many C&I customers to revisit existing energy efficiency opportunities and investigate new opportunities with the view to reducing their energy bills.

  1. Lack of funding appears to be a roadblock for many companies today. What are some ways to overcome this barrier and move more projects forward?

A recent survey of over 300 energy & sustainability industry professionals, conducted by Greenbiz & Schneider Electric, found that access to funding and capital is often perceived as a barrier to implementing energy efficiency projects. The research indicates, however, that the true barrier is not in the availability of CapEx, but rather in demonstrating clear ROI and effective engagement of executive leadership.  Put another way, the challenge isn’t access to capital – it’s the ability to build a solid business case that wins approval of stakeholders from top-floor to shop-floor.

Adopting an enterprise approach is one way to make businesses cases more attractive to executive leadership, and to the individual facility managers. Unlike the traditional approach where projects are implemented on a case-by-case basis, an enterprise-wide approach looks at a portfolio of energy savings opportunities across all sites and businesses. By leveraging shorter payback of OpEx measures, you can bring more CapEx projects into the mix while maintaining internal hurdle rate requirements. Grant funding is a great way to further reduce payback periods of energy efficiency projects. For example, NSW is launching an energy efficiency grant for manufacturing in February which offers funding for efficiency projects and metering.

  1. Can you tell us more about the NSW grant opportunity?

The NSW government is dedicating $16.7 million in funding to support industrial manufacturers implementing energy efficiency projects. Companies can use the grant for projects ranging from simple metering to more complex efficiency projects, such as CHP. The grant also offers matching funds, up to $12,000 per site for storage solutions. The deadline to apply for the first round of funding is 31 July 2019. To learn more about the projects, how to apply and for expert support, read our recent blog on the opportunity.

  1. When it comes to making the most of energy & sustainability investments, what are best practices to consider once projects have been implemented?

The traditional approach to energy conservation, including the “once and done” mindset, does not work to achieve today’s ambitions in energy and carbon reduction. To sustain results and protect energy efficiency investments in the long-run, companies are increasingly employing  energy monitoring techniques.

Energy monitoring is a cost-effective way to maximize ROI of energy efficiency projects. By simply adding a few additional metering points, companies can gain a better understanding of site-level energy usage to identify new energy savings opportunities. For example, by analyzing energy usage with weather and production data, Schneider Electric helped an auto parts manufacturer identify energy waste at their plants. Comparing performance of like-sites will reveal leaders and laggards. And in the case of laggards, that’s where your next big energy savings opportunities may lie.

To learn more about how your company can maximize the NSW grant opportunity to improve energy efficiency programs, we invite you to contact us.