Financial Sustainability: Improve business opportunities with correct electricity tariffs

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Financial Sustainability: Improve business opportunities with correct electricity tariffs

Continuing from our previous blog, this discussion looks at managing types of energy supply costs to obtain best value for money.

As part of the energy management process, you need to make sure the most appropriate electricity tariff is being used at your premises.  To minimise electricity charges, you need to select the most suitable electricity retail and network tariff and establish a consumption pattern to take advantage of both tariffs.

Electricity network service providers or electricity retailers cannot suggest the correct network tariff for you, because they do not have an in-depth knowledge of your premises.  The responsibility to choose and use the best electricity network tariff rests with you,  with expert advice from your trusted energy adviser.

A knowledge of electricity network tariffs is important to the economic viability of your premises.  Some clients may adopt the ostrich attitude when it comes to paying electricity accounts.  They do not question whether there are savings available by making network tariff changes or changing over to more energy efficient supplies or practices.  Some clients forget that money spent on energy costs cannot be spent on business opportunities.

Network tariffs usually comprise fixed supply costs which is independent of consumption, much like a fixed telephone line rental charge and a variable charge based on energy and demand consumption patterns.  Further information is available from your local network service provider. 

An example of the cost breakdown at Energex for the electricity network in south-east Queensland is found on their types of network charges form.

So which tariff to save money on ?

Which tariff to choose and save money on, depends on your premises or building electricity signature, comprising:

  1. Energy consumption (kWh)
  2. Energy time of use pattern
  3. Maximum or peak demand (kW or kVA).

All three items above need to be examined to determine which type of electricity tariff offers the greatest financial advantage.  With a basic understanding of electricity tariffs and energy consumption patterns, clients on:

  • Flat volume or quantity tariff can save money by using less energy e.g. switch equipment off when not needed or change over to more energy efficient practices or equipment.
  • Time-of-Use volume tariff can save money by using less energy and moving site operations away from peak energy time periods.
  • Demand type tariff can save money by using less energy, moving site operations away from peak energy time periods and reducing site maximum demand.  Reducing maximum demand involves energy management techniques such as load reduction, load shedding, load shifting and where appropriate power factory correction. More on this in future blogs.

Please contact Susmet for an electricity tariff analysis on your site or building premises.

Disclaimer: This blog is part of a continuing series discussing sustainability and energy management issues. Contributions featuring achievements, techniques, products, and processes are welcome. Please feel free to contact Susmet to suggest ideas on future issues.Whilst every effort is made to see that no inaccurate or misleading data, opinion or statement appears in this blog, Susmet accepts no responsibility or liability whatsoever for the consequences of any such inaccurate or misleading data, opinion, or statement.   

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