Energy prices are sky-rocketing but research shows not many companies are turning to energy audits to help stem the cash drain.
According to new research by Energy Action only around 30 per cent of companies that took part in the research said they would be “very likely” or “extremely likely” to consider an energy audit.
Chief executive Ivan Slavich said the results were “quite frustrating”.
There are usually two reasons people will get “excited” about energy – when it is not there, and when prices go ballistic.
It has gone “ballistic” in some cases.
Bills for some had gone up by $10 million or even $12 million a year, Mr Savich said.
The survey involved 93 firms ranging from single-site small-scale energy users with bills of under $100,000 a year to large, multi-site companies with bills of over $500,000 a year.
Most respondents – 86 per cent – said they expect prices will continue to increase over the next six to 12 months.
The top concern about energy for 57 per cent of the companies was high prices, and the potential for bills to force them to reduce investment in people and growth.
“While the focus amongst many market participants is on securing short term energy supply and managing potential shortfalls, this is far from topping the list of concerns for businesses.
“Commercial users are more concerned with managing the current price environment, which has immediate implications for the sustainability of a business and they expect the situation to worsen.”
Only one in four said their top concern was the long-term stability of the energy market, and only nine per cent said their top concern was sufficient political and market support for increased use of renewable.
Most respondents said they were waiting for prices to come down rather than take the pro-active step of renegotiating contracts.
Action now
Mr Slavich said companies need to take action now – by ensuring they get the best price for their energy, improving their energy efficiency and becoming more self-sufficient with solar.
He said that he has found that generally, across the board, the “really big” energy users are much more proactive.
“The people looking at the price rises and taking action are the big users.”
It’s the smaller users with an annual consumption of between 200 gigawatt hours and 50 megawatt hours that are not always as proactive.
For those coming off contracts in recent months, prices rises have been 60- 80 per cent higher in new contracts.
There are four things business should do to reduce the impact of energy prices, he said:
- Go through a competitive energy procurement process. And don’t wait for the contract to end – start now. There will be a big expiry of contracts at the end of this year, so businesses need to go to market now as “November will be bedlam”
- Manage energy contracts more effectively – particularly as about 10 per cent of energy bills are actually incorrect. Network tariff reviews often reveal wrong bills, perhaps because the consumption pattern has changed from what was in the contract, which then puts the company on the wrong network tariff
- Energy efficiency – turn the lights off. Switch out lights for LEDs, power factor correction, check HVAC changes, voltage optimisation and look at heating and cooling. Ensure buildings are airtight. Look at windows, sealing and insulation; in some buildings this can result in a 50 per cent reduction in consumption
- The fourth thing businesses should do is become more self-sufficient behind the meter with solar. There is an “explosion” of interest in this from clients. The increase in grid prices means the payback time for solar has dramatically improved, from around eight to 10 years to between three and five years. That makes it a no-brainer. You can reduce consumption by 30 to 50 per cent; add solar and get 20 to 30 per cent of your energy. That’s a saving of 70 -80 per cent on current power usage in total.