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Businesses in Australia’s manufacturing sector account for 5.8% of economic output, 6.3% of employment and 6.7% of exports – but almost 20% of energy usage.
These statistics underscore just how energy intensive the manufacturing industry is. With large premises and heavy machinery running for long periods, energy bills are almost inevitably a major contributor to overheads for manufacturers, especially those in the commercial and industrial (C&I) category.
To understand how to manage the unique energy concerns of businesses in this sector, we spoke to Laura Manerowski, our senior C&I account manager at Zembl.
What are the unique energy considerations for C&I manufacturing businesses?
Operating in the manufacturing sector presents both challenges and opportunities for large businesses. One of the challenges relates to peak power usage. Because manufacturing businesses tend to run a lot of heavy machinery and equipment – which often gets turned on all at once – they are prone to costly kVA spikes.
“Say, for example, the first person comes in at 7am and turns on the aircon, the lighting and all the machinery on the premises,” says Laura, “then in that moment it’s going to create a really high demand in terms of the energy that needs to be pulled into the property.”
Network companies don’t like it when businesses create spikes like this, because a sudden surge in demand increases the amount of electricity they need to hold in reserve for peak periods. Accordingly, some networks penalise businesses for kVA spikes by raising their ongoing demand charges.
“Each network is different,” explains Laura, “but with some companies, if you reach a kVA spike just one day of the year, they will actually bill you at that peak demand for the remainder of the year.
“Different networks operate differently, and it also depends what tariff code the customer is on, so the key for manufacturing businesses is to make sure they’re on the best tariff code and that they understand their peak usage patterns to avoid unnecessary spikes.”
Another important consideration is to find a retailer that offers competitive rates at the right times of the 24 hour cycle. “Depending on what they’re manufacturing, these businesses tend to be heavy users at peak and shoulder timings,” says Laura, so choosing a plan because it offers low off-peak rates makes little sense.
The typical operating hours of manufacturing businesses also present an opportunity for energy savings, because they may be able to make their own electricity while the sun shines. “Manufacturing businesses generally have large, warehouse-type premises with lots of roof space, and that – combined with their typical operating hours – means solar is often an attractive proposition for them.”
A final consideration relates to internal energy efficiency. Due to their heavy reliance on machinery, manufacturing plants can waste a lot of energy as “reactive power” (versus “active power,” which is what actually powers machinery). To overcome such wastage issues, manufacturers can install power factor correction equipment.
How does Zembl support C&I manufacturing businesses?
Zembl can help large manufacturing businesses to meet the unique challenges and leverage the opportunities of their sector.
“What Zembl will essentially do,” explains Laura, “is to work out your load profile and how that’s best priced. We’ll do network tariff reviews to make sure you’re not overspending on those charges, and we’ll work out your peak demands so that you’re not being overcharged for one-off kVA spikes."
“Based on all that analysis, we’ll provide an in-depth market proposal that includes all your charges and forecast spends, so you can factor them into budgeting.”
Zembl can help you get big energy bills down
When you choose Zembl for energy procurement you’ll feel our energy well beyond signing your energy contract, with ongoing service to help you know more, use less and pay less for your energy, for your full contract duration. This includes:
- Zembl Energy Consultants – a team of local, expert people at your service.
- Energy intelligence – AI-powered insights from your own usage data to uncover and maximise your efficiency opportunities.
- Energy efficiency – using your energy insights and our exclusive partnership with energy efficiency specialists Ecovantage, we’ll help power your business’s transformation to today’s most energy efficient options – which could realise huge efficiencies on your business’s future bottom line.
If you’d like to learn more, simply leave your details in the form below and one of our consultants will get back to you promptly.
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