Business energy management plan
Improving how your business uses energy and keeping your electricity costs under control can be complicated. We’ve put together a step by step guide to help you develop your Energy Management Plan and become an energy guru!
Step 1. Appoint an energy ‘champion’ and engage staff
It can make sense to assign someone to lead your efforts to manage electricity costs and identify ways to use energy more efficiently. However, it's good practice for all your employees to become familiar with electricity tariffs and general energy management.
Larger businesses may choose to engage an external energy expert to help review tariffs, conduct an energy audit, implement energy saving opportunities, provide on-going progress reporting, and recommend ways to involve your staff in energy management.
Staff can play a big part in reducing your business’s electricity usage. Because of their familiarity with your business, they often have the best ideas on how to save electricity – which means it’s not just nice to have the support of your employees, it’s essential.
Enthusiastic employees, who look out for electricity waste and proactively save electricity, can help deliver savings to your bottom line. Everyday actions, such as switching off equipment at the end of the working day, can have a big impact on your electricity use – and won’t cost you anything!
Step 2. Understand your current electricity costs and usage
It’s important to gather key information about your business’s electricity usage and costs. This information will become the baseline against which you can compare your future energy usage and costs.
If you're a small business with a single premises, this will be a quick process. If you're a large business with multiple sites, this will take longer to compile. Information to collect should include:
- Each premises address / name
- Electricity account details, including electricity retailer, account name, account number and National Metering Identifier (NMI)
- Current electricity tariff(s) at each site
- Electricity usage in each billing period – in both electricity consumption (kWh) and if available, electricity demand (kilowatts kW). It’s good to go back at least 2 years so you can see how your electricity consumption and costs vary over time. If those 2 years weren’t typical of your usual energy usage, it’s good to practice to document why
- Secondary information - you may also want to keep a record of the main appliances and equipment at each site, factors that influence energy usage, ideas that have been identified to save energy and things that have been implemented.
Step 3. Review your tariff options
Once you've identified all your sites and have a good idea of the energy usage and costs, the next step is to check your electricity tariff. Even before you make any changes to your business, there could be instant savings from changing your tariff to one that better suits your needs.
The easiest way to do this is to contact your electricity retailer and ask them to compare your tariff options. If there's a better tariff for you, your retailer will advise what it is, what you could save (assuming your usage stays about the same) and how to move to that tariff option.
It’s important that you understand the structure and pricing of the tariffs as some tariffs have charges based on when you use electricity. So if you change your electricity usage patterns after you move to a new tariff, it’s possible you could be worse off on the new tariff.
A good question to ask your electricity retailer is whether there's a tariff option that could be good for you if you were to change how and when you use electricity. For example, if you were able to change using electricity from peak time to off-peak times and move to a tariff that has peak and off-peak rates.
There are also tariffs called 'load control' tariffs that give significant discounts on energy costs in return for you allowing your electricity supply to be interrupted temporarily (these tariffs are best suited to non-essential appliances – those that don’t require 24/7 power supply). These load control tariffs have been mostly used in domestic premises in the past but are being taken up more by businesses.
Whatever tariff you choose, the most important thing is to understand the tariff structures and rates and apply them effectively to your business.
Understanding electricity tariffs
Electricity tariffs generally have fixed daily charges, a metering charge and then one or more charges based on your electricity consumption*. All tariffs have a consumption charge – measured in kilowatt hours kWh.
Some tariffs known as demand tariffs, also have a charge based on your electricity *demand – measured either in kilowatts (kW) or kilovolt amps (kVA). This demand charge can be based on your single highest half hour of demand each billing period – this is known as ‘anytime’ demand. There are other variations of these tariffs, for example tariffs that feature consumption or demand charges that vary based on time of day or month of the year. Very large customers may also have capacity and/or connection charges.
A further issue to be aware of is that eligibility for some tariffs is based on your classification as an electricity consumer. Classification is generally based on how much electricity you consume per year. Small Customers are defined as those using less than 100,000 kWh/year – also known 100 MWh/year. Large Customers are those using between 100MWh/year and 4,000MWh/year. Your electricity retailer can advise you of your classification and your electricity bill may also display this information.
* Confused about consumption vs demand? A good analogy to understand consumption and demand is driving your car. The total distance you travelled (km) would be the consumption (kWh); the highest speed (km/h) at which you travelled is the demand (kW or kVA).
Put it in your calendar
Reviewing your electricity tariffs is something you should do annually, as tariff rates and structures can change regularly. Tariffs often change at the start of each financial year – but check with your retailer for details.
Do you need to change your meter?
Changing tariffs may require your electricity meter to be upgraded to a digital meter which is remotely read (meaning that consumption data is sent via the mobile phone network, rather than a meter reader visiting your premises). Your retailer will advise you of what is needed and any costs.
Depending on the condition of your meter box and switchboard, you may need to arrange work to ensure compliance with electricity standards before having a new meter installed (your electrical contractor can advise you).
Digital versus traditional meters
Older style meters may only provide high level information on your usage, like the total amount of energy used over the whole billing period (monthly or quarterly).
Modern digital meters record electricity consumption every 30 minutes which gives a far more detailed view of your electricity consumption, allowing more accurate tariff comparisons. If you don’t currently have a remotely read digital meter, it may be difficult to accurately review some your tariff options.
Your electricity retailer can advise you of your current meter type and how to upgrade to a remotely read digital meter. For some tariffs this is mandatory.
Step 4. Identify energy cost saving opportunities
How do you do this?
Following are some options for you to consider. Whichever way you go, don’t forget to engage your staff in the process – they'll not only have ideas but are crucial in ensuring that energy saving measures are implemented and sustained.
Some businesses may choose to only focus on ensuring they're on the best tariff option to save on energy costs. If this is done every 12 months (start of the financial year is a good time), it can be a good cost saving strategy.
Or, you could complete your own energy assessment in-house. We’ve compiled some energy saving tips covering lighting, air conditioning, pools, electrical appliances, economy tariffs and hot water to help you with energy saving ideas. Reviewing these tips with your staff can help stimulate ideas that could apply in your own business. You could also have a competition for staff to come up with energy saving suggestions.
External energy auditor
To really take charge of your energy costs, we recommend you do an assessment of energy management opportunities in your business. One way to do this is to engage an external energy auditor to complete an energy audit and recommend cost saving opportunities. Read more about how to choose an external energy auditor.
Eligible businesses could utilise a free walk-through style audit from the Queensland Government funded ecoBiz program, which is delivered through the Queensland Chamber of Commerce. The ecoBiz program also has a wide range of resources that can help business develop and implement their own Energy Management Plan.
Power factor specialist
If you're a large customer on a demand tariff, improving your site’s power factor may also help to lower your energy bills – you’ll need a specialist to assist with this.
It’s also a good idea to review what other businesses have done. You can view our energy savings case studies or check out more through ecoBiz. For agricultural customers, the Queensland Farmers Federation Energy Savers program has a number of case studies.
Group your ideas
Once you've compiled your energy saving ideas, you can then group them by which area of your business they impact and whether they're behavioural changes, low cost changes or longer term / higher cost savings. Summarising and grouping them can help you to implement the measures needed. A good way to summarise them is to:
- Describe the energy saving measures
- Forecast the electricity consumption (kWh) and/or demand (kW or kVA) savings
- Estimate the cost of completion (behavioural measures usually have no cost)
- Estimate the savings from the measures and payback times
- Prioritise execution
- Nominate who is going to be responsible for the application of the idea.
You may not be able to quantify everything initially. Suppliers who you ask to quote for work may also be able to provide an estimate of energy savings.
Check the best tariff for your energy saving ideas
Energy saving ideas that are tailored to how you are charged for electricity are likely to get the best result, so reviewing and understand your tariff is important. For example, if your tariff costs are mostly based on demand charges, you'll probably benefit most from working to manage your site’s demand first.
Which tariff will suit your ideas best?
The following table outlines how the various energy saving measures will benefit you based on which tariff you are on:
|Type of idea||Example of energy saving measures||Most applicable tariff|
|Reducing energy consumption|
These measures focus on reducing the total kWh (kilowatt hours) you consume. Examples include:
|Mostly consumption (kWh) based tariffs and some demand (kW or kVA) based tariffs|
|Reducing electricity demand|
These measures focus on reducing your demand (kilowatts / kilovolts amps) or moving demand to off-peak times. Examples include:
|Mostly demand (kW or kVA) based tariffs and some consumption (kWh) based tariffs|
|On-site energy generation||These measures reduce your electricity costs by generating your own electricity. The most common type is solar power but can also include things like diesel generation.||Mostly consumption (kWh) based tariffs and some demand (kW or kVA) based tariffs|
This involves ensuring you have adequate visibility of your premises energy usage. The most common options are:
Step 5. Implementing your energy management plan
Your list of energy saving measures should become the basis for your business’s Energy Management Plan. Including targets for energy or cost savings helps to focus your efforts and track how you're going.
Set realistic targets for your business – a good rule of thumb is most businesses should be able to achieve a 10% reduction with a fairly moderate amount of effort.
You should be able to implement some of your measures straight away – remembering that the best chance of success is to ensure company management are supportive and all staff are properly engaged. Staff can be kept aware of energy saving initiatives through things like team meetings, internal emails and workplace social media apps.
Other energy saving ideas that involve a cost to progress and/or changes to your business operations may need to be discussed further and approved internally before they are applied.
There may be financial incentives to help with the cost of implementing your energy saving ideas – ranging from grant funding to low interest ls – so it’s worth exploring those opportunities. We have financial incentive programs available to eligible customers in selected areas to reduce electricity usage at peak demand times. There's also a list of other funding options on the ecoBiz website.
Step 6. Tracking your progress and sustaining your efforts
It’s very important to track your energy usage and costs after implementing your Energy Management Plan. This will help you to understand if your efforts to reduce your energy usage and costs have been successful.
You can track your progress by comparing your consumption and costs when you get each new electricity bill, against the same billing period in previous years. Bear in mind that other changes in the business might cause your energy consumption to go up or down and these should be considered when comparing.
Some businesses find it difficult to maintain momentum. A good idea is to set-up a regular ‘check-in’. This could be every 3 months. A suggested agenda for this type of meeting is:
- Update on energy costs:
- Recent energy consumption and costs?
- How does this compare to same time last year?
- What has impacted our energy consumption?
- Progress against energy saving targets
- Progress on implementing energy saving measures from your Energy Management Plan:
- What’s working well?
- What could be working better?
- What’s coming up?
- Discuss any new energy saving ideas.
Where to go for further help
You can email us for general information or advice on demand tariffs or energy management. Here's some other options:
- Our website - view our Energy saving tips for peak times, financial reward ideas and our past demand management programs
- The ecoBiz program - it has a wide range of resources that can help your business create and implement your own Energy Management Plan
- For agricultural customers - the Queensland Farmers Federation Energy Savers program has a wide range of resources, case studies and fact sheets to help farmers improve on-farm energy use and reduce costs
- EnergyCut program - for more practical information, tips and tools on energy management, the EnergyCut program is a formal step-by-step energy saving program for businesses, supported with funding from the Australian Government
- Your electricity retailer - for advice on retail electricity tariffs options
- The Energy Efficiency Council of Australia - it has information and case studies on energy efficient projects completed in commercial and industrial buildings.