11 hours ago
- Business
- AU Financial Review
Energy-as-a-service lowers power costs without capital outlay
The service provider handles everything from installation to maintenance, allowing businesses to enhance energy reliability and efficiency, while remaining focused on their core operations.
Origin, in partnership with engineering and technology firm Climatech Zero, is aiming to help businesses make this transition.
'Energy-as-a-service is an innovative option now available to businesses,' says James Magill, executive general manager at Origin Zero.
'The benefit for them is the guarantee of energy savings and that the company providing the energy service is there throughout the journey, rather than just going to a site, fixing or fitting something and leaving.'
'Costs are reduced and then smoothed out for the business and the risk is on the provider of the energy-as-a-service, allowing businesses to focus on their core operations. '
Many of the financial advantages of this approach are the result of shifting spend from capital expenditure to operational expenditure, with businesses paying a fixed monthly or annual payment spread out over the length of the service.
This contrasts with the traditional model of upfront equipment purchases plus ongoing maintenance costs.
Instead of buying and maintaining compressed air systems, for example, a manufacturer could pay a fixed fee for guaranteed compressed air volume, with the service provider handling all equipment and maintenance.
'We're accountable for delivering results and the customer only pays for the performance they receive, which removes the risk for the customer,' Magill says.
Visy – an industry-leading, Australian-owned packaging and recycling company – has worked in partnership with Climatech Zero since 2019 on a range of energy initiatives, which has delivered 13 projects across 11 sites.
Sustainability is central to Visy's operations, with this partnership helping Visy meet its energy, emissions, production and financial goals.
Discussions around the energy-as-a-service model began in 2023, initially focused on compressed air systems, with Visy rolling out its first two sites in 2024.
'After partnering with Climatech Zero for its energy-as-a-service model for our
compressed air assets, we've seen fantastic energy efficiency improvements of more
than 25 per cent in the power required to deliver our compressed air needs,' says
Ryan Santowski, Visy's group general manager – energy, waste and water.
'Our reliability has improved, allowing us to focus more on what we do best, Australian manufacturing. We've seen the energy-as-a-service model provide high asset reliability, combined with high energy improvements.'
Climatech Zero, in which Origin has a 20 per cent equity stake, provides tailored engineering solutions for industrial customers that complement Origin's capabilities in grid-scale and on-site energy solutions.
The partnership will help the companies deliver end-to-end energy and decarbonisation strategies for businesses.
'Origin brings deep expertise in both behind-the-meter and in front-of-the-meter services, including solar, demand response and market integration,' says Climatech Zero co-founder and managing director, Peter O'Connell.
'We focus on optimising the mechanical systems and controls that drive industrial energy use,' says Climatech Zero co-founder and managing director.'
'There's a big energy efficiency opportunity for Australia and we're excited to be part of this transition.'
