Meaning business on energy efficiency

As energy costs increase, national emissions reduction deadlines loom and environmental concerns grow, now is the time for businesses to take decisive action on energy efficiency.

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There are more than two and a half million small-to-medium business owners in Australia, spanning all industries and supply chains. The sector’s viability is critical to the country’s economy. As businesses continue to operate in a high-inflation, high-cost environment, opportunities for business owners to reduce costs and improve cash flow remain a priority.

" According to the Energy Efficiency Council, simple energy efficiency measures can help businesses reduce energy use by between 10 and 80 per cent.”Fortunately, some of the best tools to help businesses lower their energy usage and cut emissions are often the most cost effective. Energy efficiency, electrification and renewables have a role to play in every business, as outlined in ANZ and the Energy Efficiency Council’s latest report, Putting Energy Efficiency to Work for Business

Energy efficiency means getting more out of every unit of energy. This can be as simple as replacing lightbulbs with modern LEDs or adding building insulation to lower demand for and costs of heating and cooling.

For Will Bowden, a fifth-generation farmer managing the family’s 15,000 hectare property in Bothwell, Tasmania the installation of moisture probes and flow meters to detect water level changes in his dams was a simple measure to save energy by eliminating unnecessary pumping.

According to the Energy Efficiency Council, simple energy efficiency measures can help businesses reduce energy use by between 10 and 80 per cent. And it can be a great place for SMEs to start because the initial investment can be small and the money invested in energy efficient measures may pay for themselves.

The first step for businesses is to understand where, when and how energy is being used. Data and insights can drive decisions on how best to use and manage energy. Expert advice can also be integral in helping businesses identify and undertake targeted energy upgrades by establishing an energy management system.

Global businesses which implemented such systems achieved an average 7 per cent improvement in energy productivity, according to a recent Climate Group report. Further, the Climateworks Centre found savings generated from investment in energy productivity can increase annual profits by 2 to 10 per cent.

Zero carbon energy

Colormaker, a paint manufacturer in Brookvale, New South Wales is a case in point. The company’s Managing Director David Stuart says bringing in an expert to develop an energy management plan was pivotal in cutting their energy bills and emissions. “Investing in a new compressor resulted in a 23 per cent reduction in electricity usage across the entire site.”

Electrification is another option to help supercharge energy efficiency and involves replacing fossil fuel-powered equipment (such as gas) with modern electric alternatives. As more electricity comes from renewables like solar and wind, electrification will help ensure zero carbon energy is used for the required jobs.

Businesses can also save money by considering a range of options for sourcing their energy. While electrification and on or off-site renewable electricity generation may be an option, it also makes sense for businesses to try for a better deal from their energy provider, considering almost all businesses still rely on grid-supplied electricity.

Different industries require different approaches to energy upgrades but what they have in common is the need to make energy efficiency a priority. A range of government grants and programs to support investment in cheaper and cleaner energy can make the transition easier.

Large corporates are also supporting SME energy efficiency investments. For example, ANZ and the Clean Energy Finance Corporation delivered the ANZ Energy Efficient Asset Finance program which offers discounted finance to SMEs to invest in activities to cut their emissions. 

As the world continues to address climate change challenges, energy efficiency has an important role in reducing emissions. Modelling commissioned by ANZ and the Energy Efficiency Council found energy efficiency can deliver up to 18.5 per cent of Australia’s 2030 emissions reduction target at comparatively low cost, and 13.5 per cent by 2050.

While governments push to further reduce emissions, much of their focus is on large corporates. However, small-to-medium businesses that act now will be better prepared to respond to any future regulatory changes.

Clare Morgan is Group Executive Australia Commercial at ANZ and Luke Menzel is Chief Executive Officer of the Energy Efficiency Council.

Access the ANZ and the Energy Efficiency Council’s latest report, Putting Energy Efficiency to Work for Business

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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