Many businesses around Australia still rely on the grid for their electricity needs. How can an energy hedge reduce costs over time? More
Managing costs is the key to business success, but in some cases it may be difficult or even impossible to forecast electricity costs year on year, let alone account for tariff fluctuations within a single day.
Australia's coastal areas have an 80 per cent chance of exceeding median temperatures this summer.
Variability in business expenses can add significant stress to the process of managing an enterprise. With summer now well and truly here, most businesses will face increased electricity use as rising temperatures demand more of cooling systems.
The Bureau of Meteorology reported that Australia's coastal areas, where most of the major population centres lie, have up to an 80 per cent chance of exceeding median temperatures this summer. What can businesses do to promote energy security and reduce the cost of keeping cool over summer?
Energy hedge solves power security issues
Unfortunately, businesses that rely solely on grid energy don't always have complete security when it comes to the prices they are charged. For some organisations, fluctuating energy prices can create unnecessary risks and make it challenging to achieve power security.
Variable prices for any of the resources businesses depend on create extra challenges. In these cases, it's important to consider the viability of off-grid power generation solutions which can operate independently and reduce an enterprise's dependence on conventional electricity.
Capstone microturbines operate on natural gas or other biogas alternatives, meaning businesses are able to generate their own electricity and offset fluctuating grid prices.
What is a hedge?
In this case, the term "hedge" refers to the type of investments microturbines are for businesses looking to reduce their dependence on fluctuating grid electricity prices. By investing in a microturbine, businesses are reducing the risk of being overwhelmed by grid electricity costs and providing an energy efficient option for their own power needs.
The aim of an energy hedge is to provide an alternative to grid electricity that boasts fixed operating costs so businesses can turn to them with confidence. It also intends to make organisations less reliant on the fossil fuels normally responsible for the fluctuating prices of grid electricity, while offering further efficiency benefits as well.
How do co- and trigeneration fit in?
These processes allow microturbines to be much more than just a power substitutes, and can drastically reduce carbon emissions for organisations that choose to use this functionality.
When microturbines are producing electricity, they also create waste heat. Through the processes of co- and trigeneration, businesses are able to put this waste heat to good use, allowing them to get the most out of their investments.
Trigeneration uses waste heating for cooling purposes.
In the case of cogeneration, the waste heat from the microturbine is used solely for other heating purposes within a structure. Commonly, this includes use in general heating or in hot water systems.
This is particularly useful over the winter months or in other situations where a business's need for efficient heating increases, as it provides power security and an efficient method of alleviating the costs associated with heating.
Trigeneration operates on the same principles as cogeneration but with added functionality. In these cases, the waste heat can be used for both heating and cooling, providing businesses with further options to increase the energy efficiency of their operating procedures.
While cogeneration provides a notable boost to power security, organisations looking to create an effective energy hedge in Australia's diverse climate should consider the additional functionality offered by trigeneration. With the country's hot summer days often giving way to cold evenings, it's important that businesses are able to bring energy efficiency into to a range of their operating practices.