On 18 September, Melbourne’s North Food Group (MNFG) and NORTH Link partnered with Procurement Australia and Victoria State Government to host a “reduce your energy cost – energy group buying forum”. Over 30 attendees, MNFG partners included, were informed on collaborative group purchasing methods that could reduce operational costs.
The past decade has seen electricity prices increase by 80 to 90 per cent with spot prices doubling in the past two years. This has resulted in electricity costs being the third highest operational cost for many businesses. Gas spot prices have too followed trend, doubling in the past two years.
According to a report prepared for Energy Consumers Australia 2017, on average, Australian small to medium enterprises’ (SME) using 40,000 kWh per year, saw an increase in their electricity bill of 16 per cent since April 2016. Meaning, annual electricity bills averaging $9,500 for Victorian SMEs.
This is why the recent World Economic Forum Global Risks 2018 report highlights energy costs as the leading concern for businesses in Australia within the next ten years. Australia was the only country in the report to rank energy prices accordingly.
Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims recently emphasised, “Many medium-sized food and non-food manufacturers have seen prices increase by 20 per cent recently or 100 per cent over last five years”.
While these numbers do sound frightening, the federal government is planning to place more of a focus into renewable energy to hopefully reverse the trend.
In the meantime, government initiatives and group buying opportunities are available for businesses to benefit. As was the aim for the group buying forum on 18 September. attendees were educated on tools they can utilise to tackle skyrocketing energy bills.
Neil Banerji from Procurement Australia (PA), and Carl Daley from Savvy Plus Consulting, spoke to attendees about the large potential cost benefits associated with group buying. As Victoria’s largest energy aggregator, PA connects business with sellers.
Attendees were presented with two options businesses can utilise to aid their energy bill woes:
- Firstly, businesses can join group buying at a fixed rate for two to three years.
- Secondly, businesses can join what’s called progressive procurement. Meaning, rather than a fixed rate for a fixed term, business can join a community that buys energy ongoing and as market price fluctuates.
NORTH Link, MNFG and Procurement Australia are working together to develop a process whereby businesses can access these options.
Peter Hansford and Andrew Rothberg from the Victorian Government, begun the forum by discussing key actions government are putting in place to reduce energy costs through sustainability. Exciting visions for green energy aims for energy production to be 25% renewable by 2020, increasing to 40% by 2025.
Ten steps were then laid out to give business guidance on what they can do to reduce energy costs. Step 3 gave insight into consistently reviewing your business energy consumption to find where energy can be saved. Step 7 highlighted use of an embedded network or microgrid that can be shared with neighbouring businesses.
For more information on how you can personally reduce your businesses energy costs, check out the vic gov website here.
Several government initiatives and grants were brought to attention, demonstrating to business that there is help:
- Energy efficiency best practice guidelines helps guide business in understanding where their system is limited and how it can improve, and where new systems can be implemented.
- Gas efficiency grants is a matched funding project that assists with the cost of a variety of gas related projects.
- Victorian Energy Upgrades provides business with access to discount energy-saving products and services.
- Navigating a dynamic energy landscape is a briefing that delivers advice on how to access expert support and take control of energy consumption.
MNFG General Manager, Operations Tony Coppola encouraged businesses to take advantage of all options including available government services.
“In addition to finding the best price, it is also important to implement other strategies such as energy audits and improving existing lighting systems,” he said.
“RMIT University is offering MNFG and NORTH Link partners the opportunity to engage their students free of charge. Students will undertake tasks such as energy audits and improving existing lighting systems,” he said.
This forum is a huge value add for partners who attend. Events such as these are anticipated in the future to benefit businesses involved in the MNFG community. Keep an eye out for events, as for the most part they are free to attend.