From EEX.gov.au published on April 12, 2013

Getting a handle on how energy is priced, consumed, sourced and regulated is a must when it comes to negotiating a new energy supply contract and implementing demand management practices which will best support your business.

Understanding the Energy Market and Demand Profiles

The price businesses pay for energy is influenced by their demand profile and when and how they access the network. The more energy you use and the more volatile and unpredictable your load, the more energy retailers will charge.

Oxford Cold Storage Case Study

Oxford Cold Storage is Australia’s largest family owned cold storage company and works closely with intermediaries to monitor charges and assist with energy procurement. To reduce its network costs, the company decreased its demand profile whilst increasing its storage capacity by 62% by introducing the following energy efficiency measures:

• Increasing the thermal performance of new storage facilities using under slab insulation and increased building shell insulation
• Air lock door closing system to reduce air loss during loading and unloading
• More efficient LED lighting systems
• Variable frequency drive speeds to meet changing refrigeration demands

The company has a policy of funding new energy initiatives that achieve a payback in two years of less. It also ensures its main site does not exceed its total demand level by introducing monitoring systems and technologies which allows freezers to remain switched off for up to 24 hours and halve its load within 15 minutes.

Companies such as Amcor and Oxford Cold Storage are focusing on a number of energy saving strategies to rein in their costs and improve their bottom line by:

• Identifying energy saving measures so they use less and pay less
• Managing and reducing their demand profile by shifting, shedding and shaving their energy loads to off peak times when prices are lower, or minimizing their demand profile at peak times
• Negotiating cheaper prices from energy suppliers through close monitoring of the market to get the best and most flexible deal.

Managing your overall energy demand by changing consumption in response to real time energy electricity prices, can generate savings and potentially extra revenue if you have onsite generation capacity or the capacity to sell back unused energy.

By adopting energy efficiency improvements, Oxford Cold Storage Company reduced its annual cost of electricity by close to $1 million. Over the past five years the company (also) increased storage capacity by 62% without increasing electricity use.

– Gabor Hilton, Engineering Manager, Oxford Cold Storage

However, you can’t manage what you don’t measure which is why understanding how energy is used across your business operations is critical to improving performance.

Having detailed data on how and when energy is used allows companies to forecast their maximum consumption on a daily basis, identify where they can reduce demand on the network and get the best deal from energy providers.

The Energy Efficiency Exchange (EEX) website at www.eex.gov.au covers many aspects of the Energy Procurement process including:

• How the energy supply chain works and its key players
• Information sources to track energy price movements
• How to measure current and future demand profiles to negotiate new contracts
• The pros and cons of short vs. long term contracts
• The benefits of load shifting, load shedding and peak shaving to reduce demand profiles and costs
• New technologies and processes adopted by industry sectors to increase energy efficiencies to minimize network demand
• What the energy procurement tendering process involves from assessing proposals, undertaking audits, and evaluating your energy profile to secure better terms and conditions.
• Revenue opportunities by providing ways to sell capacity to demand side aggregators at peak times.

This article is re-published thanks to the creative commons license under which it was originally published.