By Cameron Jewell
19 September 2013 — Australian energy management solutions company COzero is set for growth after Japan’s Nippon Gas invested an undisclosed amount of money for a 16 per cent stake in the business.
COzero, which was founded in 2007, is no stranger to good news. In 2011 the company debuted at number one on BRW’s Fast 100 list, achieving average annual revenue growth of 604 per cent for the three years to June 2011. Chief executive Nicholas Armstrong also debuted on BRW’s 2012 Young Rich List, the youngest debutant ever at 28, sharing an estimated $22 million with business partner Geoff Alexander.
However, the company has had a difficult past year. Having had a core business interest as an aggregator and on-seller of renewable energy certificates, the company became an example of how changing government policy can affect business viability after the federal government prematurely ended its solar credits program in 2012.
The company was forced to close its Melbourne office and slash its staff from 25 to 12.
And the axing of the carbon price was a major concern for the company.
“If they scrapped it completely, we’d really struggle to have a business,” he told the Sydney Morning Herald last year.
The company has since put more focus into its energy management solutions for commercial business and industry, and things are looking up.
“This has been a good year,” Mr Armstrong told The Fifth Estate.
They’ve put on five staff and are aiming to increase by an additional five by the end of the year, taking them back to 25 all up.
It shows energy efficiency is where the business opportunities for sustainability now are, as the savings speak for themselves, and the industry is less dependent on government support.
Mr Armstrong said his company’s EnergyLink technology could save businesses between 20 and 50 per cent on energy costs, depending on how inefficient their sites were.
“It’s basically a real-time monitor and control solution for anyone who is using more than around $20,000 on power a year,” he said.
The ideal clients, he said, were people in the property sector who might have multiple sites and who want to get real-time visibility over what their portfolio of properties were doing.
The technology is a combination of software and hardware – a series of smart meters is installed, which allow businesses to monitor and control electricity use at a circuit and appliance level using a real-time software program.
For NSW, Mr Armstrong said, energy savings certificates could be generated by measuring against a baseline. While this was easy to do for things like commercial lighting – which can be seen by the huge number of LED upgrades – getting an accurate measure of energy saved by cleaning out a HVAC filter or upgrading a chiller, for example, was more difficult. Having these measured by a dedicated smart meter opened up the opportunity for accurate baseline measurement, and the generation of certificates could then be used to offset capital expenditure, Mr Armstrong said.
“The real advantage of this system is that its significantly cheaper than what has been available,” he said.
Payback can be quite quick for large energy users, even without energy savings certificates.
Another trick up the company’s sleeve, which Mr Armstrong said would allow it to create more savings for its business, was becoming a certified energy retailer.
The investment by Nippon Gas was helping support their push into the retail market.
Mr Armstrong said as a retailer the company would aim to deliver time-of-use priced electricity to property portfolio owners through EnergyLink and aggregate load over different sites to get them a better deal, with cheaper running costs perhaps able to attract higher rental yields.
Japan offers opportunities
With the Japanese electricity market deregulating over the next three years, and the country experiencing electricity shortages and fossil fuel price spikes due to the shutdown of its nuclear power industry, COzero is hopeful of Japanese market opportunities for Australian energy management products and services in the medium term.
“They understand the technology and the need for it,” Mr Armstrong said.
He said the Japanese were very innovative with energy management, and even had behaviour change programs on display when he was there for a recent meeting.
The Cool Biz campaign encourages offices to increase their HVAC thermal range to 28°C in summer, and for workers to dress down, leave their suits at home and instead have open-necked short-sleeved shirts.
President and chief executive of Nippon Gas Shinji Wada said in a statement that COzero had a strong track record, innovative products and a professional management team, and that Nippon Gas was looking forward to working closely with the group.
“We believe that COzero’s smart energy management technologies will be successful in Australia and may directly translate to the Japanese market and other markets around the world,” he said.
Mr Armstrong said for the time being he was focused on the Australian market, as there was “a lot of inefficiency”, but he was hoping that more quantifiable data for his company’s technology would be garnered over the next six to 12 months and this could help with possible future expansion.