New energy technologies like solar, storage and electricity management systems are creating more opportunities for small businesses to protect themselves from increasing power prices. The electricity supply industry is a complex and changing landscape of risks and opportunity requiring guidance to navigate.

The challenge

Small-medium businesses (SMEs) operate in a challenging environment with thin resources and tight budgets. Increasing electricity prices and changing tariff structures can create confusion and high costs for small businesses, while alternative technologies are becoming an increasingly accessible means for SMEs to take control of their energy costs.

Every SME is different and the challenge is identifying what would work best for any particular situation and providing the framework for businesses to understand how to access opportunities.

The response

Pulling the right information together for SMEs requires detailed analysis of the different business types and their electricity demand patterns. It also requires insights into the impact of different tariff designs and technology costs and opportunities for demand management.

In order to fully understand these issues the CEC has engaged Entura to produce a comprehensive technical report to inform stakeholders of the opportunities for demand-management in small-medium businesses. The report is aimed to more technical adept stakeholders and includes analysis of the technical and regulatory environment and opportunities and risks for SMEs.

In addition to the technical report, the Moreland Energy Foundation has produced a guide to enable small-medium businesses to investigate demand management solutions. The guide is specifically designed to address the knowledge barrier for businesses implementing these solutions, including a steep-by-step process that covers everything from understanding energy use through to evaluating the business case and how to access it.

Technical report downloads

Outcomes for various industry stakeholders

Consumers and electricity industry stakeholders should consider the following outcomes from these key reports.

  • Electricity prices are on the rise and bills are becoming an increasingly important consideration for small-medium businesses. Once implemented improvements to the way you use and generate your electricity can be an easy way to help reduce your operating costs and environmental impact.

    There is no one-size-fits-all solution and business operators should read the consumer guide to understand their own specific circumstances and to identify the solutions that may work best for them. The process set out in the guide includes:

    1. Understand consumption patterns
    2. Understand technology options
    3. Weigh up the options
    4. Understand electricity tariffs
    5. Seek help
    6. Analyse business case
    7. Overcome barriers to implementation

    Small-medium business operators should also take particular note of the terms of their electricity supply contract and be aware of the risks of changing tariffs.

  • Engaging with the SME sector on complex issues like electricity supply can be challenging. The time-poor nature of many operators means that simple communications tools are critical to identifying the opportunities for renewable energy and demand management solutions.

    The SME guide for businesses is designed to enable these stakeholders to provide information to small-medium businesses in enable them to make decisions that work for their particular situation.

  • While one of the underlying principles of electricity charging is that the consumers can respond to prices low flexibility to change consumption and low resources expose SME businesses to higher risks than other customers.

    It is critical that this customer group is able to fully understand and implement the right opportunities to manage their costs. The technical report outlines the kinds of risks that these businesses would face under changing tariff structures and how any investments in demand management may be impacted. In addition the SME guide provides a worked example of the kinds of information that these customers need to be more fully informed on how to manage these risks.

    Government stakeholders should consider these reports when engaging SME businesses in the future.

  • The Technical Report outlines a number of characteristics of SME businesses and the outcomes for these customers under changing tariff structures. Importantly it also identifies the opportunities for SME businesses to respond to tariffs and costs. Given the current agenda of tariff reform DNSPs should take account of this work in order to understand the potential impacts of various tariff options.

The role of this study in the FPDI program

This task fits within the FPDI project’s ‘Storage and Demand Side Management’ work stream which has the objective of addressing the technical and information barriers to the uptake of storage and demand side management technologies.

It provides a comprehensive assessment of the risks and opportunities for small-medium businesses with regards to managing their electricity costs. It also provides a comprehensive and accessible information platform to translate these risks and opportunities directly to this important customer group.