We’ve got the electricity. So why don’t we have the electric cars?
The energy sector no longer wants to keep us in the dark. The word on the street is when it comes to electricity usage, socially- conscious goes hand in hand with financially astute. As New Zealand braces itself for massive disruption in the energy sector
Until recently, energy companies have been the one- eyed king in the land of the blind, providing consumers with confusing information and a lack of choice, while pocketing healthy profits. Not any more. A streamlining exercise by the Electricity Authority has opened up the market to competition, and the new boys are riding in on the cloud, with an iPad in their scabbard.
Here are three of the new kids on the block:
Launched in May, Electric Kiwi offers “naked electricity”, a business model structured around online tech innovation.
“We’re a tech start up as well as an energy start up,” says GM Julian Kardos. “We’re completely online, we don’t have any call centres, all payments are made using credit and debit card, and all trouble-shooting is done through live chat.”
The cost savings are obvious – fewer bums on seats means less capital outlay, and the saving is passed on to the consumer.
“This approach isn’t for everyone,” admits Kardos. “Some people like to chat about the weather.” But if you’re internet savvy you could save big, as long as you’re on a smart meter.
Smart meters mean that Electric Kiwi is able to get more information about its consumers, Kardos says.
“We’ve changed the pricing model to reflect power usage based on that information. Instead of discount incentives and different rates for different customers, we’ve given everyone access to a flat rate and the ‘Hour of Power’ – a free hour of off-peak electricity each day.”
Kardos says if you do nothing, you will save an average of 4.2%, but if you think about your power consumption and complete high energy jobs during that hour, you could save 10%-15%.
“And importantly, we’re reducing the peak load on the network and encouraging people to consume power at night when it’s mostly renewable,” says Kardos. “Our model is good for the country, as well as the individual consumer.”
Another start-up, soft-launched in Wellington last August, Flick is also using smart meter data to give customers access to wholesale prices.
“Other businesses bundle up the costs of getting electricity to your door, which makes it easy to justify price increases,” says CEO and founder Steve O’Connor, noting that electricity retail prices have increased 75% in the last ten years, while some costs for retailers have actually dropped.
“We’re offering full transparency – all we charge you for is the price for being your retailer. You pay actual market prices for the energy and network costs.”
The price of energy changes every half an hour depending on demand. Network costs passed directly through to customers also vary depending on the load they have to deal with,
The market is no longer at the feet of energy providers; we’re going to see a world where people can choose to buy energy when it’s cheapest, choose to store it or use it, choose to produce their own energy and choose to sell power back to the market for a profit.
Steve O’Connor, Flick Electric
O’Connor says. Flick gives its customers access to that information which, coupled with usage data from their smart meters, should enable them to get a cheaper price.
“We do have customers who play the game, watching the prices,” O’Connor says. “But in reality most just make a couple of simple changes. If you use your dishwasher at bedtime, for example, you will be paying up to a quarter of the usual retail price for your power without it impacting on your life.”
He says the average saving is around 17%, compared with a regular retailer. “Some customers have moved to automation to benefit from wholesale energy prices as well,” explains O’Connor. “With gadgets on timers or smart plugs, you can have complete control over your energy usage.”
O’Connor says Flick’s business model has been set up in preparation for what is to come – energy- efficient technologies becoming cheaper and therefore more accessible.
“The energy sector hasn’t really changed for 30 years, but within the next five years, we’ll see 50 years’ worth of disruption.
“People can afford solar panels now, plus Tesla has been developing a new battery that can store energy for use later on.
“The market is no longer at the feet of energy providers; we’re going to see a world where people can choose to buy energy when it’s cheapest, choose to store it or use it, choose to produce their own energy and choose to sell power back to the market for a profit.”
Utilise launched its business retail offering earlier this year. Kiwi- owned and with generation assets in Taranaki, the company calls itself a new “Gen-tailer” – an innovative retailer for business customers, with the security of a generator behind it.
Like Electric Kiwi and Flick, Utilise is able to offer the service it does because of the rollout of smart meters – power boxes which take accurate power usage readings and transmit that information in real time to the power company. Over half of all domestic electricity meters are now smart and this is forecast to be 75% by the end of 2015, and up to 95% in 2018.
Add in business and commercial customers and there are now approximately 1.2 million smart meters around.
Utilise has also benefited from the developing electricity hedge market. Once dominated by the big players, Utilise is now able to trade in this market, to the benefit of its customers, says general manager Marcus Kohn-Taylor.
“Energy retailers take the risk away from their customers by purchasing electricity hedges. If there is a drought and spot market prices spike, businesses don’t face that extra cost.”
Utilise says historically, large industrial users have benefited from customised prices, which are aligned to the electricity spot market. But other businesses have paid a more expensive flat rate, as have residential consumers.
Kohn-Taylor says Utilise uses smart meter technology, combined with its own bespoke software, to analyse each customer’s usage and then offer them a unique, personalised tariff.
“It takes about 20 minutes, and while we still build the risk into our pricing so the customer doesn’t have to factor that in themselves, we’re able to offer a streamlined tariff that is closer to the wholesale price, even for smaller companies, based on the actual energy they use and when they use it.”
Take the Rushworth Café in Auckland’s Wynard Quarter, for example. Co- owner James Gardiner switched to Utilise because he was frustrated at his power bill.
“Our chillers run 24/7, but we were paying a peak rate even at night. I thought there had to be a better structure.”
Utilise installed a smart meter, and Gardiner now gets a discounted power price overnight.
“It will save us about $1500 annually – a big gain for a small business.”
The energy sector hasn’t really changed for 30 years, but within the next five years, we’ll see 50 years’ worth of disruption.
Steve O’Connor, Flick Electric
With gadgets on timers or smart plugs, you can have complete control over your energy usage.
Steve O’Connor, Flick Electric
Three energy efficient appliances that could save you $$$
All the rage in Europe and America this year, smart thermostats have hit the market to help homes and businesses automate their heat provision and reduce energy output – and maybe even help companies move to a more sustainable heating and cooling regime.
First unveiled in 2011, the Nest learning thermostat, for example, doesn’t just respond to the way you’ve programmed your needs – it actually learns what your needs are and preempts them.
Nest is Wi-Fi- enabled and connected to the internet, and the smart thermostats use sensors to detect whether you are actually in a room or not, and learn your schedule so you don’t have to manually set the heating to come on at a particular time.
In New Zealand, where thermostatcontrolled central heating is still not the norm, Mitsubishi Electric has unveiled a Wi-Fi heat pump control app. The idea is customers can control several heat pumps from one app on a phone or tablet, with no expensive hardware needed – apart from the pumps themselves.
They can also change the set up and temperature of each pump remotely.
Trish Stenzel from New Zealand distributor Black Diamond Technologies says Wi-Fi Control is geared for small to medium-sized commercial buildings including offices, motels, and schools.
“Once each heat pump is fitted with an adapter, building managers can control and customize the heating and cooling needs of multiple units, not just in the same building, but across a number of locations, through one app.”
So a business headquartered in Takapuna but with a factory in Papatoetoe can control both systems from one mobile phone.
Stenzel says the technology has been designed specifically for the New Zealand market and can be retrofitted to most Mitsubishi Electric heating and cooling products, including ducts systems, as long as they are less than five years old.
Unlike the Nest thermostats, the Mitsubishi Electric app can’t learn your habits, but you can programme in usage parameters, setting heat pumps to a particular pattern.
SEE THE LIGHT
Are you still using traditional lightbulbs? The UK’s Telegraph newspaper, with the help of comparethemarket.com, calculated that replacing ten 60w ordinary bulbs with 6w LED lights could save you nearly $500 a year.
And even though they’re more expensive than other types of lightbulb on the market, the energy savings are so significant you would have paid off your investment within five months. The bulbs themselves last on average 18 months.
If you upscale their calculations to a large office, your savings could well enter the four figure mark, not to mention the huge reduction in your carbon footprint.
DON’T BE FRIGID
If your business uses industrial refrigeration units you’ll know how energy inefficient they can be. This is because of the way units work, with the thermostat asking the compressor to run until the minimum temperature is achieved, and then the compressor’s energy use increasing exponentially as the bottom of the temperature control band is approached.
Vancouver-based company Smartcool has developed two products (known sexily as ECO3 and ESM) which can be used with an existing refrigeration system, to optimise its cooling cycle, reducing energy output by around 15%.
The devices are placed between the compressor and the thermostat, where they actively monitor and analyse the system.
They then use that information to adjust the length of each cooling cycle to make sure it uses as little electricity as possible.
Worth changing: Co- owner of Rushworth Cafe James Gardiner switched to Utilise because he was frustrated at his power bill.