Why it’s time to take control
Energy demand in Australia is expected to grow by 140% by 2050, and the cost of energy is also predicted to increase by 40% by 2030.
Electrification consultant to McMillan Shakespeare, Richard Simpson, says these figures threaten both budgets and operations. But if organisations take more control of their energy supply, they can protect both while potentially reducing carbon emissions.
“If your company is exposed to the wholesale market and prices move to $17,000 per kilowatt hour, which occurred just 2 months ago, as opposed to paying a couple of dollars for your power, all of a sudden you're paying a significant amount. This type of scenario is predicted to happen more frequently in future years, and even though it’s out of your control, the consequences can be really drastic.”
Organisations simply can’t afford the risk.
There is an effective solution with low up-front costs exists that aims to reduce an organisation’s reliance on the grid, while also helping to navigate legislated ESG reporting requirements. Introducing the Battery Energy Storage System (BESS).
It could save you money and keep the lights on
An energy solution for commercial and industrial operators, BESS is like your own onsite power plant. It’s a semi-permanent unit connecting directly to your existing energy infrastructure. Programmed to draw and store energy when it’s at its cheapest, it allows you to tap into your own supply when prices hit their peak.
“The wholesale market goes negative about 20% of the time. So that means that at no cost or very little cost, you can replenish your battery and then use that energy when prices are high. It's very simple arbitrage," Simpson says.
“If you’re in an industry where you need a lot of energy, like manufacturing, agriculture or cold storage, you don’t have much choice but to use a lot of energy during peak periods,” he adds.
And if you have a solar system, you can maximise this investment by using stored solar power during these times and even create revenue streams by selling excess back to the grid during peak demand periods.
The benefits of taking control over when you tap into the grid go beyond price, according to Interleasing General Manager Operations - Asset Management Services, Liam Day. A BESS can also help keep operations running smoothly.
“What happens particularly in the manufacturing world is even a small drop in supply, called a brownout or SAG, triggers all of the safety stops in your manufacturing equipment, and your whole production line grinds to a halt,” Day explains.
According to research commissioned by the Climate Council, hotter summers and ageing coal generators are ramping up power outage risks.
“If you’re making potato chips or producing wood panelling that needs to be kept at a certain temperature, you'll be writing off thousands of dollars’ worth of product, and it can take you hours, if not days, to get your manufacturing back up and running.”
In the event of a complete blackout, the consequences could be even more serious and costly.
How Interleasing can assist with your BESS adoption
Diesel generators are currently the most common backup power supply, but forward-thinking organisations are looking towards batteries for a smarter, simpler and greener solution to their power supply issues.
The mining industry is one example, and operators across Australia are switching to wind, solar and BESS to potentially reduce operational costs, enhance energy security and lower emissions.
But what about the upfront cost? Leasing transforms the BESS equation entirely. Instead of a $100,000+ capital outlay, organisations access the technology through operational expenses. They can partner with asset management experts like Interleasing to handle everything from business case development to installation and ongoing management.
“Interleasing works with trusted energy partners to source the battery, and they recommend units that will suit each unique requirement. At the end of your lease you can return or extend, but what happens next is managed by us. The residual risk sits with us,” Day says.
Organisations also don’t have to worry about employing an energy expert to manage the unit, as that’s all covered in the lease agreement.
An easier ESG shift
While EV transitions require charging infrastructure and behavioural change across your workforce, a BESS aims to integrate seamlessly with existing operations. Hopefully leading to less pressure on staff and minimal workflow disruption - just better energy resilience and potential cost savings from day one.
“Some companies want to do solar but can’t because their roof structure can’t accommodate it or other practical constraints. Putting in a BESS can be easier than solar, and it only takes a small amount of space,” Day says.
The actual size depends on the power requirements needed, but they start as small as 1-2 car spaces. Most large manufacturing facilities or agricultural sites would have more than enough space to spare. And by leasing, you’ve got experts working with you to make sure every part of the process is simple and tailored to your needs. Interleasing's CEO, Adam Morrison, sees this as a core competitive advantage.
“We’ve taken the stress out of building and financing it, by having the work already done for you through a listed financial services provider and energy retail partners,” Morrison says.
He adds that while it’s possible to have a BESS unit built yourself, it’s a huge time and money investment. It also means finding and funding additional expertise that most organisations don’t have in-house.
“With Interleasing, the unit comes ready to go. It will get delivered in a box, installed within a day or two, and then you're up and running. The software package and the unit are both maintained for you.”
Could BESS be best for your business?
If you’re considering a BESS and how it might work for your organisation, ask yourself the following questions:
- How much do energy spikes impact your profit?
- What would a day-long production shutdown cost your organisation?
- Are you looking for tangible, measurable initiatives to help with sustainability reporting?
- Do you want a solution that takes months, not years to implement?
- Do I have at least 1-2 carparks of available space?
If the answer to those questions is yes, it could be time to speak to an expert.
Talk to one of our experts about our flexible finance solutions that make a future-focused energy transition more accessible for your business.
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