Independent energy production is the way forward, says innovation expertPosted on September 3rd, 2019 in Insights by AUSPACK
It’s no secret that Australia’s climate is warm and dry – and getting warmer every year – which makes it difficult to store and transport certain types of food.
Brett Wiskar, chief future officer for Wiley, spoke at the 2019 AUSPACK Business and Industry Conference about the energy challenges and opportunities facing Australian businesses.
The current energy situation
Australia has some unique energy problems that many other countries don’t have to worry about. The challenges for the food and associated industries is wide, impacting supply chains, logistics, packaging, delivery and end storage.
While some food can be stored at room temperature, others need specific conditions. Chilled, cold or frozen temperatures may be required, and these demand large amounts of energy. Which, of course, results in a large bill.
On top of that, a large part of Australia’s grid power comes from coal, which has huge environmental consequences.
Brett said, “From a business perspective, I’ve got to consider where that energy comes from and the price of that energy.”
“Our consumers care about the environmental and sustainable footprint of the businesses that they interact with. So, at some point in time, they’re going to ask questions not only about what’s our packaging made of, but what’s the environmental impact of that packaging and the logistics and of keeping the food cold.”
“Where we generate our income from has a direct impact on the price that we pay for that energy. The price that we pay is starting to change. It’s starting to become terrifying.”
How can businesses protect themselves from rising energy costs?
While grid electricity is expensive and getting more expensive, one solution that manufacturers and food producers around Australia are coming up with is the idea of producing their own energy.
Coal-fuelled power is not changing. It’s expensive to obtain and process, and there’s no innovation in the industry to make it provide more power than it has done in the past.
However, other forms of energy are becoming both cheaper and more effective. Solar, for example, is becoming a lot more feasible for domestic and utility-scale purposes, but it’s rarely taken up for commercial or industrial purposes. This is normally because it’s not seen as core to a business.
However, there are some instances when companies are doing it and doing it well, particularly with solar thermal.
Brett gave the example of Sundown Farm, a South Australian company that grows 15-20% of the country’s tomatoes, that invested in a solar thermal project that not only desalinates ocean water for the plants but can also provide electricity around the clock.
He said, “We have capacity to do all sorts of interesting and innovative things. The price of solar thermal is dropping dramatically. It’s not going to be as cheap as solar panels, but it’s going to be more cost-competitive than coal.”
“The advantage that it has over traditional solar is that I can generate that energy and I can store it and use it later on. That makes us independent of the grid, gives us capacity to be autonomous and not be constrained by those costs.”
Selling power to the grid
To make large scale investments to produce your own power is not a cheap endeavour. Companies across Australia are spending millions of dollars to create solar farms and the like, but in most cases they’re only using the power five days from seven.
That means that their investment is sitting dormant two days a week.
Some have found, however, that by finding a partner to manage their power production, they can cover their own needs and then sell surplus energy to the grid to make the most of the investment.
Brett said, “There’s starting to be companies that are coming to market that are saying ‘if you can make the asset grid-facing, and you give us access to the asset including the storage’ they’ll actually play on the short-term power market, on the spot market, with your asset for you, and they’ll actually monetise it.”
“You’ll have seen press around the Tesla battery in South Australia at the start of last year generating $2million in a week. That’s how they did it.”
Three key takeaways:
- Energy prices are set to continue rising, which can be a major outgoing for businesses in Australia in the food industry.
- The Australian energy market is ripe for disruption and innovation.
- Companies can make the most of their own energy production by selling power back to the grid at optimal times.
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