Guest Post – Understanding Network Tariff Optimization

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11 Jan 2022
5 min read
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Recently, I was pouring over a video discussing the potential of clean and renewable energy in a more vulnerable, risk-ridden future. While I know exactly how we can all benefit from clean energy, given my line of work, watching videos like this are a boost of motivation on days when it’s hard(er) to roll out of bed.

As I watched, I began recollecting a recent conversation I had with a potential client, who, truth be told, wasn’t blown away by the appeal of more sustainable power consumption. I remember that at the end of that conversion, the only thing he was interested in was how much money he could save – “I’ll be honest with you, I’m only interested in the cost-saving potential of solar systems. Tell me how much I can save and let’s see how we can take this conversation forward.”

The truth is that many people don’t have the time to think about the future when they’re struggling today. That’s why my pitches always highlight the cost-saving potential of renewable power.

An important part of the process of converting clients to green energy these days is network tariff optimization. Given that the last few weeks have involved plenty of conversation on my end on this front, I thought it might be useful to examine some of the finer elements of network tariff optimization.

This is especially important as the Australian Energy Regulator lays down their final regulatory proposal on Friday, 5th June 2020, which will include changes to cost components like peak and off-peak windows, tariff classes and structures and more.

What are network tariffs, and why are they important?

Network tariffs simply refer to the cost electricity consumers are charged to finance the cost of building, maintaining, and operating the poles and wires that deliver electricity to consumers. This also includes the cost of operating the grid and is billed to you via your direct energy retailer.

For businesses, optimizing network tariffs to improve cost savings and ensure you’re not spending money needlessly is essential. A large business whose annual electricity consumption is greater than 100 MWh will have its tariff calculated based on demand. The network tariff for a smaller business, whose energy consumption is less than 100 MWh, is calculated based on energy.

That being said, back in 2017, Energex started offering a voluntary demand tariff for small businesses based on the maximum kilowatt demand, which is measured as a single peak over a 30-minute period during the peak charging window within a monthly billing period.

This is available only for businesses with consumption amounting to less than 100,000 kWh per year and can’t be used in combination with Business flat (NTC8500).

How does Energy Partners help you optimize your network tariff?

At Energy Partners, we work with businesses to make their operations greener and more cost-efficient. In this process, we also help them optimize their network tariffs.

For bigger businesses on demand-based network tariffs, we begin by analyzing 30-minute interval data to understand specifics of their energy consumption. My team and I believe that this kind of knowledge gives clients more power over their spending because they understand their reliance on the grid and its impact on the network.

As part of this process, we also work together with clients to come up with a strategy to regulate their demand and create meaningful cost-saving opportunities through network tariff optimization. We also help them access voluntary tariffs and help them further optimize these to improve savings.

When it comes to smaller businesses, we ask companies to consider the option of renewable energy and reduce their reliance on the grid. One thing we talk about is their ability to become energy independent and reduce the costs associated with network tariffs.

Regardless of your energy consumption, solar power is undoubtedly more cost-efficient than the default network tariff (Business Demand (NTC7100)) Energex will apply this year.

Optimize your network tariff with Energy Partners for great cost-efficiency

At Energy Partners, our goal is to help you enjoy energy independence and efficiency. The first step for many, in this process, is optimizing their network tariff.

Get in touch with our team today to find out how you can drive down operational costs and enjoy a network tariff that works for you and your business.

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