Sky-rocketing energy wholesale costs, renewable energy policy, and annual networks and default offer repricing are three big influences in energy costs today. Find out if they’re set to make your energy bills higher or lower – and what the outlook is for the next 12 months.
While almost everyone agrees that renewable energy is the ideal way forward, the path towards an eco-driven energy infrastructure is certainly challenging.
Globally, in 2020 around 29% of all energy produced was generated from sunlight, wind, rain, tides, waves and geothermal heat, up from 27% the year before.
But right now, green energy may be a luxury that some residents and businesses don’t have the option of considering, due to their state’s low uptake of eco-friendly energy supply. Furthermore, their attention may be focused on their bill rather than the environment, with a huge increase in wholesale energy prices set to impact the entire market – most notably two states.
Energy repricing in 2022
A huge influence on your energy bills is the annual repricing by networks (the owners of the poles and wires) and of the default market offers by the regulators, which happen every July.
Energy retailers use these two important changes to update the rates they charge, reviewing their entire energy supply chain including wholesale, operational and environmental costs.
In 2021, this saw energy prices fall. Statistics from the Australian Energy Regulator (AER) confirm that on average, in the fourth quarter of 2021, energy prices decreased in all regions except Queensland and Tasmania compared to Quarter 3 2021.
However in 2022, wholesale energy prices are soaring. The latest data from the Australian Competition and Consumer Commission (ACCC) reveals that energy is currently the cheapest it’s been in eight years, but that’s all set to change.
The global surge in coal prices is set to significantly push up electricity prices across the country, but the hit to your bottom line will be felt the hardest in two states in particular.
Queensland and NSW to feel the brunt of rising prices
Because of their reliance on coal exports, NSW and Queensland will face higher prices than other states. In Queensland, the issue has already erupted, with one retailer, Locality Energy (LPE), announcing their energy prices will literally more than double overnight.
“The Queensland wholesale electricity market is experiencing extreme and consistent price volatility that we have never seen before. This means that LPE can no longer provide competitive rates,” they stated.
“At this point in time, LPE cannot give you an exact price increase. But please be aware that we are increasing your c/kWh usage rate by over 100% by 1 June 2022.”
LPE is not planning to close, but they will “stop servicing customers in the Ergon (south east Queensland) region”, because they don’t want to “place additional financial pressure on customers.” They’re also calling on the government to look at ways to subsidise and stabilise these unsustainable wholesale energy increases, in a similar way that they have for motorists at the petrol pump, in the hope that retailers can pass the reductions on to customers.
Another retailer, Discover Energy, has let customers know their solar tariff is reducing from 16c/ kw to just 1c per kw, citing an oversupply of solar energy. The grid is receiving more energy than it can cope with during peak daylight hours and current energy infrastructure is not equipped to sufficiently manage, store and repurpose it, so retailers like Discover Energy are no longer willing to pay for it.
In addition to energy wholesale prices, other things impact your bill such as:
your current usage
contract benefits period
whether you have solar and/or gas
In the current climate, if you haven’t reviewed your business’s energy contract in the last 6 months, there could be a huge opportunity to save.
We’re calling on the Government to look at ways to subsidise and stabilise these unsustainable wholesale energy costs in a similar way that they have for motorists at the pump. This way retailers can pass on the reductions to customers.
Origin’s coal plant closure
Another influence on energy prices in 2022 is Origin Energy’s decision to close their coal-fired power plant – Australia’s largest one – seven years early.
In February this year, the energy retailer confirmed its plans to retire Eraring Power Station, which has been operating for 35 years on the central coast, in 2025, ahead of its previous retirement target of 2032.
The company will repurpose the Eraring site to install large-scale battery storage of up to 700 megawatts, in alignment with their push into renewables. Similar battery site plans are underway for the shuttered Hazelwood (2017) and Wallerawang (2014) coal power stations.
While this is undeniably a positive move towards a more renewable energy market, it highlights the risks of Australia’s clean energy transition, which is currently without a national or regulated plan for the exit of coal.
Right now, some consumers are benefitting, as renewable energy grows as the cheapest form of electricity generation. But we’re at risk of future closures without clear government policy and oversight, which is having significant impacts on electricity prices, and on regional economies that depend on coal.
Get an obligation-free energy review
At Make It Cheaper we constantly review the energy market, working with businesses to help them take control of their energy bills and achieve potential savings. Contact us for an obligation-free review today on 1300 957 721.
As a recurrent expense, your energy costs can add up fast. In deregulated regions with many providers, you can reduce your energy expenses. You only need to switch to a cheaper provider.
Often, this starts with comparing rates between different providers. Once you identify a cheaper provider, you can start the paperwork. You need to cancel with your current supplier and sign a new contract to secure these rates.
How Does Comparing Electricity Plans Help Your Business?
Comparing electricity plans can find you a competitive provider in your state or territory. If you do it alone, this is not a straight forward process. To compare energy plans, you must understand what goes into your bill.
Who Is the Cheapest Electricity Provider in Australia?
There is no specific answer to this question. Every supplier will base their charges on several components.
Finding the cheapest suppliers will require actual calculations. You need to compare each component against other energy providers. You then calculate the totals to find the cheapest rate including if there are discounts and the time of day you use most of your energy.
While looking to save on your energy usage, you need to look beyond the headline discounts. The actual tariff rates might differ. A huge discount or welcome credits rarely translates to the largest long term energy savings for your business.
The quickest way to find savings with a free comprehensive comparison, is by providing Make it Cheaper with a recent bill so they can give you an accurate assessment of the offers in market.
Understanding Energy Comparison: Electricity Plans, Tariffs and Discounts
In Australia, your business energy plan will fall in a regulated or deregulated market. Typically if you are a business in a deregulated market you can switch between suppliers to enjoy better rates.
Deregulated states and territories include:
New South Wales
South Australia
Victoria
Australian Capital Territory
South East Queensland (Including Ipswich, Gold Coast, Brisbane and Sunshine Coast)
In regulated regions, you have fewer choices for market comparison. Most of the rates fall under government regulation.
If you are in a deregulated region, you need to compare energy plans from different providers. Make it Cheaper does the comparison for you for free. But first, it is helpful you need to understand what determines the rates you pay.
Understanding Tariffs and Discounts from Energy Providers
The amount you pay in your energy plan comes from a variable usage charge and a fixed daily supply charge. The structure of the variable usage charge will vary based on your business energy plan:
Single rate SME electricity tariffs – This is a standard kWh rate. It stays the same at all times throughout the year.
Time of use SME electricity tariffs – Here, different kWh rates apply. The rate will change depending on the time of day you consume energy. There are different rates for ‘peak’ and ‘off-peak’ hours. You’ll also have ‘shoulder rates’ for hours between the peak and off-peak times. The definitions of these times will vary by provider.
Controlled load tariffs – This is a special tariff for metered appliances. It applies to appliances that only run at off-peak hours such as an electric hot water heater.
Understanding these tariffs and the impact they will have on your electricity and gas bills will save you money.
You should audit and identify business patterns and energy consumption habits. This will help you determine the best energy provider for you in your region.
In addition to tariffs, you can also take advantage of discounts. You will find varied discounts from different energy providers.
Most energy companies offer two major types of discount plans:
Conditional discounts – You can only enjoy these discounts if you meet certain conditions. A simple example is ‘the pay on time discount’. You will only enjoy this discount if you make all your payments on time.
Guaranteed discounts – These apply automatically throughout the contract term. They do not depend on a special set of conditions. Remember once your contract term expires often your discounts can too- so it is important to get an energy comparison when ever your contract expires.
These discounts will vary by retailer. Nonetheless, you can use them to maximise on your energy savings.
Saving on Electricity: Compare Different Plans and Make the Switch
While running a business in Australia, your electricity and gas bills can add up fast. Make it Cheaper can help you compare electricity plans and switch freely between different providers.
Benefits of Switching Your Electricity Plan
You will enjoy several benefits, such as:
Reducing Your Energy Bills
“We have used Make It Cheaper for several years now, with great results. Each time we have received great service and achieved excellent savings. Most recently Lucy Block worked with the retailer to reset our demand charges, reducing our fixed charges by over $150K – a fantastic result! Would definitely recommend Lucy and the team at Make It Cheaper!”
Most Australian businesses pay more than they have to on their electricity, gas and utility plans.
Your energy-saving plan begins with:
Understanding your energy usage and what goes into your plan.
Comparing plans from different energy companies.
Using the information to switch to the provider with the cheapest plan.
Discovering Eco-Friendly Options
Some electricity/gas companies now offer renewable and sustainable energy options. There are more energy companies using wind, hydro, solar and biomass. These renewable sources benefit the environment.
While switching, you can ask for a cleaner and greener energy provider, often these are more expensive than other plans, however you can ask your energy expert for their advice.
Eco-friendly plans helps improve your sustainability practices. You can even use this information to appeal to the environmentally-conscious customer.
Bundling Up Services
The energy plans comparison process will often combine your gas and electricity bills. By combining the two, you can use the information to streamline your consumption. mMake It Cheaper will use information from your business to create a custom bundle deal. This plan will offer you big savings on your energy bills. It will also give you access to heavily discounted bundle rates.
Improving Your Service
While making the switch, you can choose:
A competitive service provider
An energy company with better customer service
If you are not happy with your service provider, consider making the switch today. You can weigh available information to find the energy provider with the best service for you.
The Cost of Switching
It is easy for your business to compare and switch their electricity and gas providers by using a free energy comparison service like Make it Cheaper. While comparing your energy plans, you only need a recent electricity and or gas bill.
At Make It Cheaper we use the actual readings on your bill and compare them to different energy providers. We will then recommend the best and cheapest energy provider available on our panel.
If you choose to make the switch, we will take charge of the entire process. We will handle all the paperwork and calls from the energy company. The best part is, this service is free. This saves you time and money.
Finding a Better Electricity Deal for Your Business
Your bottom line will appreciate the cost-saving benefits of comparing energy plans and switching to a cheaper provider.
Make It Cheaper makes it easy for you to switch by providing you with all the information you need to make a decision.
Our team of energy savings experts will help you:
Assess your bill to understand your current energy plan.
Compare different energy retailers to find a competitive plan for you.
Make a recommendation to help you make a decision.
Handle all the calls and paperwork from the energy retailers needed to make the switch.
If your business is ready to enjoy energy savings, contact Make It Cheaper today. You can call us at 1300-957-721 or contact us online now for free.
Looking to save on your business energy bill?
We find savings for 4 out of 5 businesses. See how much your business could save.
There is no doubt that energy is a complex category and when it comes to commercial energy and MultiSites it can be even more confusing. MIC Energy Brokers is here to help demystify commercial energy jargon and to help secure competitive energy rates for your business, that will help save you time and your business money.
Network Tariff Reviews or NTR’s
You may have seen Network Tariff charges on your energy bill, so what exactly are they?
Network Tariffs have been a regulated charge set by the network distributor and approved by the Australian Energy Regulator (AER) since 2014.
These charges cover the creation and maintenance of the poles and wires that deliver electricity to your business.
For large market or commercial customers, these tariffs are “passed-through” from the distributor and will appear as a separate line item on your energy bill from your retailer.
Tariffs can change by your network distributor, usually at the start of the Australian financial year for most states or in Victoria on January 1st.
However, it is unlikely that your retailer will proactively review these charges and, in some circumstances, a one-off event that increases your demand/load could increase your Network Tariff charges, resulting in you ending up on the wrong tariff and end up that you may be overpaying, this is due to your network tariff being unique to the energy requirements of your business. As tariffs are unique to each site, if you have multisites this further complicates the energy landscape,
How often should I get a tariff review?
Network tariffs can be changed once a year. MIC Energy Brokers believe that reviewing your network tariff annually is beneficial as although routine price changes only occur once a year, your business’s energy profile may have changed which could impact what you pay for your network tariff charges.
If you are in Victoria, we recommend that we review your charges in February, or in other states in August, this is so that we have a recent bill with any annual price changes that have been made by the network distributor.
Secure your free Energy Tariff Review
Whether or not you are a customer of MIC Energy Brokers, we are happy to provide you a complementary network tariff review. To get in touch email call our commercial team on 1300 957 721.
Using Make it Cheaper’s expert service to find a better deal for your business energy is one way to help cut the cost you pay for gas and electricity and add welcome dollars to your bottom line, but you should also look to reduce your energy usage wherever possible.
By following our energy saving tips, businesses can significantly cut the cost of their utility bills with little effort or expense. Not only will you reduce the cost of powering your business but you’ll also improve your green credentials and reduce your carbon footprint.
Air conditioning
It’s important to choose an air-conditioning system suitable for the size of space you are trying to cool. The power of air-conditioning systems are measured in Kilowatts, it’s recommended that you use 125 Watts per square meter of floor area to be cooled (in living/work areas).
When purchasing large electrical items ensure you pay attention to the energy rating labels found on all air-conditioners, fridges, freezers, dishwashers, clothes washers and clothes dryers. These labels use a star system to grade efficiency. They also estimate how much power the appliance is likely to consume in a year. This should give you an idea of the running costs.
Energy saving recommendations
Use the Recycle function on the air conditioner. Cooling air from inside uses less power that cooling hot air from outside
Service the unit. Clean the filters and vents, ensuring there’s no build-up of dust and debris, this will ensure the system runs efficiently.
Air-conditioning alternatives
There are several alternatives to traditional air-conditioning which can be viable options.
Evaporative air-conditioners cost 80% less to run than conventional a/c units and cost half as much to purchase. They work by passing the warm air from outside through a series of wetted filter pads which cool the air via evaporation before passing it into the room to be cooled. As well as cooling, these types of units increase the humidity in the air, which is useful in drier climates. Capital cities where they work well include Perth, Adelaide, Melbourne, Canberra and Hobart, central Australia is also very suitable.
Reverse cycle units – As well as being able to cool during summer months, reverse cycle air conditioning units can warm a premises during the winter months. They do this by extracting heat from the outside air (even on mild winter nights) and passing it through a condenser. The heat is extracted and used to warm the insides of the house. Reverse cycle units are very economical when it comes to warming a room.
Ceiling fans are very cost effective solutions. Ceiling fans run at a fraction of the price (2 to 3 cents per hour) of air conditioners and can provide a welcome relief on a hot day. Sometimes however a fan just isn’t enough, so a way to save money is to run your air-conditioning unit at the same time as the fan but raise the thermostat 10 degrees. The room will remain cool and your air-conditioning appliance will use less power.
Lighting
There are many ways you can save money when lighting your office or home business. With the introduction of new energy efficient light bulbs it’s possible to reduce the amount of energy used by up to 80%
Ideas for saving money on lighting
Install motion sensors to turn lights on and off depending on whether someone is in the room.
Where appropriate, install light sensitive sensors to turn lights on at dusk and off at dawn.
Incandescent lighting uses 80% more power when compared to Compact Fluorescent light (CFL) bulbs which also last 8 times longer.
Fit energy saving light bulbs. They last 10 times longer than ordinary light bulbs and can save $80 over the lifetime of the bulb.
Review the space you’re trying to light. Fluorescent lighting might be more suitable for large spaces.
Clean the light fittings, this produces a brighter light and increases the life of the bulb.
Where appropriate fit skylights, a free and natural way to light a room.
Refrigeration
When purchasing a fridge or freezer you need to ensure you buy one suitable for it’s purpose. Over filling or under filling a fridge / freezer leads to inefficiencies and greater energy consumption.
When choosing a fridge or freezer, look for ones with high energy efficiency ratings, the more stars the better.
Fridge freezer checks and quick wins
Position freezers and fridges out of direct light.
Ensure there is suitable air flow (at least 80mm round all sides) around the appliance.
Check the seals on doors and closing mechanisms are all in good condition.
Defrost the freezer regularly to avoid the build up of ice.
Ensure fan belts aren’t perished and the motor is aligned.
Where necessary provide exit pipes or vents for hot air exhaust.
Fit air curtains in walk-in cold rooms to reduce the transfer of air.
Don’t re-stock during the hottest part of the day.
Keep the appliance well stocked. Fill any large spaces with empty cardboard boxes (reduces the loss of cold air when opening the door).
Climate Control
Controlling the room temperature is key to saving money on your energy bill. For optimal energy savings it is recommended you cool your environment to 25ºC in summer and heat it to 20ºC in winter.
Every 1 degree increase in thermostat setting in winter will use 15% more energy. Every 1 degree decrease in summer will use 10% more energy.
Climate control quick wins
Restrict who can adjust the thermostat.
Locate the thermostat away from drafts, direct sunlight and mechanical equipment (photocopiers, computers etc).
Only cool or heat areas that are being used frequently. There’s no point heating or cooling an area that’s rarely used (storage rooms, cleaning rooms etc).
Windows – Fit reflective film, external shutters and internal blinds to reduce the amount of sunlight entering the building.
Double glazing – if you’re building a new property look to incorporate suitable glazing.
Fit draft excluders and auto door shutters. Sealed doors are better for cooling in the summer and keeping heat in during the winter.
Ceiling insulation is an essential part to cooling your property in the summer and keeping it warm in the winter. Correctly installed loft insulation can keep indoors up to 10 degrees cooler during summer months.
Consider fitting suitable roof tiles to reflect the sun’s rays or have the roof painted with heat reflective paint. This will reduce the amount of heat absorbed into the building during summer months.
Office Equipment
An average home business can save up to $200 by addressing appliances that are left on standby when not in use. Obviously the savings are even greater for small businesses with more employees and commercial premises.
LCD screens, air conditioners, photocopiers, computers, scanners, dishwashers, dvd players, TV’s are examples of appliances that tend to be left on standby. Getting into a habit of fully powering off these devices when not in use is a great way to save money on your bills.
Office equipment saving ideas
Modern computers have the ability to hibernate or standby, use these settings from control panel to save power during inactivity
Turn off PC’s and LCD screens at the end of the day
Turn off printers and copiers at the end of the day
When available utilise the sleep or power save options on photocopiers and printers
Print on both sides of the paper.
Have your employees ask themselves “Do I really need to print this document?”
Turn lamps and lights off at the end of the day
Use laptops instead of desktop PC’s, they use 80% less energy
Ink jet printers use 90% less energy than laser printers
Solar Power
Once setup, solar systems can provide your business with free electricity. You save money straight away on your bills and in some states you’ll be paid for any excess energy you generate and feed into the national grid.
Solar can be used to heat water as well as generate electricity for the rest of your business.
Solar water heaters
Heating water can be one of the biggest energy users in a home and also a small business, solar water heaters can significantly reduce this cost.
The government provides substantial incentives for installing solar systems, these include;
50% tax reduction off the cost of a solar system purchase (30% for businesses with turnover greater than $2mm). This is achieved using the governments small businesses general tax break
Renewable Energy Certificates (REC’S) which accompany solar system purchases and are tradeable.
Solar credit program for installing grid connected systems.
Feed in tariffs – In some states it’s possible to connect your solar system to the grid and be paid for feeding electricity in.
Other benefits include:
Solar can save you 50 to 80% of your water heating energy consumption (based on Government approved TRNSYS modelling).
Reduce your home business greenhouse gas emissions by 3-3.5 tonnes per year.
Solar energy generation
As well as using solar to heat water, solar can be used to generate your business electricity. Businesses that choose to install these solar units will benefit from free electricity.
In certain states you have the ability to feed any excess electricity into the grid. You will receive renewable energy certificates as part of the feed-In scheme that you can then sell.
Water
There are many ways you can save water and reduce the size of your bills in your business and home business.
Heating water uses the most electricity in a household and can also be a significant cost to businesses. Recent studies show that nearly a third of the average households energy use goes on heating water.
Commercial and small business water saving suggestions
Have your boiler and heating system regularly serviced.
Set the thermostat so it’s not too hot, the recommended setting is 60°C/140°F
Ensure there is suitable insulation around the boiler and along the pipe work to keep the heat in.
Where appropriate install an “On-demand” boiler. These heat the water when it’s required. These are suitable for both offices and homes.
Choose the right size system according to the premises.
Fit flow controllers, regulators and aerators to taps to limit the supply flow.
Fit flow sensors to taps so they only run when objects / hands are placed under the sensor.
Toilets can use up to 12 liters of water per flush, fitting dual flush cisterns or restricting the amount of water in the cistern will help.
Where possible fit urinals as opposed this uses much less water.
Maintenance check for leaking water pipes and dripping taps (a leaking tap can waste more that 2,000 liters of water each month.
Check your water meter regularly and compare usage to other companies in your industry.
Ask employees for their ideas on how best to save water in the business. Run incentives and publicise internally about the need to save water. This will raise awareness throughout the company of the need to save water.
Water saving measures for home businesses
Where appropriate install an “On-demand” boiler. These heat the water when it’s required. These are suitable for both offices and homes.
Have your boiler and heating system regularly serviced.
Set the thermostat so it’s not too hot, the recommended setting is 60°C/140°F
Ensure there is suitable insulation around the boiler and along the pipe work to keep the heat in.
Many business owners are often on the wrong energy deals for their business due to a lack of understand of their bills and their business’s energy requirements. The first thing to do to combat this is to better understand your gas and electricity bills.
Kilowatt Hours and MegaJoules
Your electricity usage is measured in Kilowatt Hours (KWh) and your gas will be measured in MegaJoules (Mj). To come up with the right level of kWh and Mj usage on your bill, your supplier will take your last, lower meter reading away from the current meter reading, providing you with a usage amount for that period. Sometimes, the kWh usage will be converted to MWh (Megawatt hours) – simply, there are 1,000 kWh in one MWh.
Billing period
For a typical medium sized business, using between 20,000 and 160,000 kWh you are likely to be billed quarterly, but you may receive a monthly bill. For any business using more than 160,000 (160MWh), you will be billed monthly.
Usage breakdown
Most of the time, your usage is not charged back to you at a flat rate. Suppliers often create tiers of usage, and therefore tiers of pricing. You may be charged a low $ per kWh for the first 4,000 kWh of usage in a year, and then significantly higher price for the remaining usage. This means that it’s not good enough to accept a set of prices, and take the suppliers word that it’s cheaper. Our advice is to always calculate what a typical bill will be with the new prices compared to the old to properly assess how competitive or otherwise the deal is.
Peak vs. off-peak
Coupled with the usage breakdown, your kWh charges could also vary depending on the time of day you use the electricity. Simply put, using electricity at 4pm on a weekday could be much more expensive than 4pm at the weekend, not to mentioned charges being a lot cheaper at 4am in the morning.
Daily charges
You will always have a daily charge for the provision of electricity and gas to your business. These costs can vary massively between suppliers, especially when some supplier may look to re-coup margin through these charges not typically scrutinised by a business owner.
Discounts
You may find that you have certain discounts on your business energy bills – they typically come in two forms:
Pay on time: paying your bill within 10 days of receipt.
Contract term discount: by committing to a supplier for 2 or 3 years, you may be offered additional discounts. In fact, if a supplier wants you to be a ‘loyal’ customer and give up your freedom to change suppliers for a period of time, we’d always recommend looking for an attractive discount incentive.
How are my energy bills calculated?
For each unit – Mj or KWh – of usage, every supplier has a specific charge. These charges will vary depending on the total amount of energy you use during the course of a year. There are even some charges that apply depending on the time of day you use your electricity or gas, whether you’re a business or home user. Keep in mind charges fluctuate, there are no pre-paid plans or electricity cap rates.
Switch and Save with Make It Cheaper
We work with leading retailers to find you a competitive deal for your business, then do all the legwork on the spot so you start saving, fast. Get in touch with Make It Cheaper today for a free energy review.
Looking to save on your business energy bill?
We find savings for 4 out of 5 businesses. See how much your business could save.
