Energy excellence
Kiwi businesses are honoured for lighting the way to greater energy innovation.
This year’s Deloitte Energy Excellence Awards recognised some of the industry’s success stories in what is becoming an increasingly competitive market. More than 650 people attended the awards, which had two new categories this year.
Consumer NZ Energy Retailer of the Year: Nova Energy
Todd-Corporation owned Nova was recognised for its product innovation and focus on value.
It is one of the fastest-growing retailers in the country, adding more than 10,000 customers over the past two years.
It has grown its customer base from just over 20,000 customers in 2008 to more than 80,000 in 2015.
Nova said customers did not want all the ‘‘bells and whistles’’ from a provider if it came with a cost premium.
With its own distribution networks in some regions, Nova said it could tailor its solutions to customer needs. It has an ‘‘optimisation plan’’ that targets commercial customers who are not on the best meter set-up for the way they use power. They can then reconfigure their meters to cut down their bills.
The awards judges were impressed with Nova’s ability to come up with new solutions for its customers.
‘‘A commitment to tailor energy solutions to best suit customer needs sees Nova offer a range of services, including an optimisation plan for customers with smart meters that sees it providing free assessments and checks to ensure that their expected savings are being achieved.’’
Gentrack Innovation in Energy Award: Flick Electric
Market disruptor Flick offers customers a plan that passes on wholesale electricity rates, plus a margin. If the spot price of electricity goes up while someone is using it, they pay more. If it drops, they pay less.
But it uses technology such as smartphone apps to warn its customers of higher prices so they can avoid the priciest times, if they want to.
The judges said Flick was an extremely worthy winner – its customers had saved an average 19 per cent on their bills since the company started. Flick has grown its customer numbers 37 per cent over the past year and increased its revenue 15-fold.
‘‘The pass-through, spot-based model is certainly a New Zealand first, and may well be the first of its kind globally,’’ the judges said.
Chief executive Steve O’Connor said his firm was going ‘‘gangbusters’’ as customers voted with their feet and switched to Flick.
People who actively managed their power use and tried to use appliances only at the cheapest times were saving up to 50 per cent on their bills, he said.
‘‘There’s more choice and real control. Rather than bill shock once a month, this is simple and gives customers confidence and much more control of about how much they are using and what the bill will be.’’
It now offers its service in every major metropolitan area in the North Island, as well as Christchurch and Dunedin. O’Connor said it was a challenge for the business to get access to rural areas, where there were fewer of the smart meters that Flick’s model requires.
But he said Flick was working to increase its coverage where it could.
Flick’s biggest hurdle had been getting customers to care about their power bills.
‘‘Consumers have tended to be quite disengaged historically, so we needed to make them aware of the value-add we are offering.’’
But he said word-of-mouth referrals were now growing quickly. People liked how transparent the Flick model was, he said, and that they could see who was charging what part of the bill. The award was recognition that the industry itself was also starting to appreciate what Flick was doing, too.
EECA Business Large Energy User Initiative of the Year: KiwiRail
KiwiRail has managed to cut its locomotive fuel use by more than 6 per cent.
Fuel is KiwiRail’s second-biggest cost, after labour. In the first full year of its Locomotive Fuel Conservation project, KiwiRail saved four million litres of diesel and avoided 10,800 tonnes of greenhouse gas emissions. The project includes a new driver advisory system.
‘‘Achieving this has not been easy. We installed the new system on 170 diesel locomotives, trained our 355 locomotive engineers and implemented operational and process changes to make sure we balanced savings in fuel use against getting the freight job done,’’ said chief executive Peter Reidy.
The system uses Energymiser technology to develop an ideal driving scenario for routes, advising drivers when to brake, when to coast and when to accelerate in order to achieve fuel savings and keep the train on-time.
National manager of service delivery Soren Low said it had required drivers to make changes to the way they operated their locomotives.
He said coasting had not been something that was typically done before.
‘‘All these things are behavioural changes and technologies, that’s how we’ve been able to make savings. A big part has been the locomotive engineers. Some of them have been driving trains for a long time and we’re coming in and saying ‘the way you’ve been doing it is suboptimal, we want you to change things’. It’s been quite a process for a number of people. There was a lag in the early stages.’’
‘The industry has never been more competitive or more innovative.’ Sue Chetwin, Consumer NZ
But he said the drivers had adjusted to the idea and it had made a significant difference.
IPENZ Energy Engineer of the Year – Rosalind Archer
Rosalind Archer is head of engineering science at the University of Auckland, and a director of listed explorer New Zealand Oil and Gas.
A specialist in reservoir engineering, she was recognised for her leadership of the Geothermal Institute, her work developing the Master of Energy Programme at the University of Auckland and her ongoing research efforts.
Archer was the first woman to become the head of an engineering department at the university.
After completing a PhD in petroleum engineering, she went to work in the United States, based in the heart of the oil operations in Texas. She came back to New Zealand in 2002 even though, she says, ‘‘oil and gas is not such a big deal here’’.
She was the only engineer working in an international team doing the due diligence work on Australia’s Gorgon CO2 sequestration project, which allowed it to go ahead.
The project is intended to significantly reduce CO2 emissions by injecting the CO2 that is separated from the gas stream underground, instead of releasing it into the atmosphere. It is predicted it will sequester 100 million tonnes of CO2 in its lifetime.
Over her career, Archer has moved from a petrol focus into geothermal energy – in which she says New Zealand is the envy of much of the world.
She has been internationally recognised as a distinguished member of the Society of Petroleum Engineers and was the first New Zealand-based engineer to be awarded this title. Archer is also working with the Ministry of Foreign Affairs and Trade on exporting New Zealand’s geothermal expertise to developing countries as part of its aid package.
Other winners
The Energy Technology of the Year award, sponsored by Crown-owned Callaghan Innovation, was won by Auckland-based Petromac for its wire-line conveyance system. Petromac was acknowledged for the ‘‘world-class’’ Kiwi ingenuity of its technology, which is enabling drillers and well operators to survey wells made difficult by ledges, washouts and high-deviations from vertical.
The company was launched out of a shed in Auckland, but the judges said Petromac’s conveyance system had been described as a game-changer by leading petroleum industry operators.
The technology was developed to address the deployment limitations of conventional wireline logging tools in wellbores and is tapping into a market worth USD$8 billion annually. The company has international patents in place and is ready to expand into new markets.
Linda Thompson, Fonterra’s energy manager, was named Young Professional of the Year for her role with Fonterra’s energy portfolio, working to using resources efficiently and sustainably.
Key initiatives championed by her team included participating in the spot market to reduce electricity purchase costs, dual-fuelling select manufacturing sites to increase energy security and achieving notable energy savings at targeted sites.
The judges praised her focus and attention. She was new to the sector when she took up her role in 2012.
This year’s Editor’s Award went to Morrison and Co executive and former Trustpower chair Bruce Harker.
Energy News editor Gavin Evans told guests that Bruce’s contribution to the sector had spanned the very early development of spot wholesale pricing, through to the commercialisation of new retail models and the development of renewable generation on both sides of the Tasman.
His review of ECNZ’s handling of the 1992 hydro crisis helped shape the break-up of ECNZ and the development of the competitive wholesale market. He went on to play a key role in the development of Infratil’s Australian operations, including the very successful Lumo retail business in Victoria, and the expansion of Trustpower’s wind and hydro interests in New Zealand and Australia.
‘‘Where policymakers have talked about leveraging this country’s experience with competitive markets and renewables, these companies have actually got out there and done it.’’
From 2000 until 2015 he served on the board of Trustpower, the last nine years as its chairman.
The Energy Project of the Year award went to OMV for its Maari Growth Project.
The $500 million project doubled production at the offshore Taranaki oil field, increasing its reserves and lowering its operating costs.
The judges were impressed with the complex and dynamic nature of the $500 million Maari growth project, which comprised a series of sub-projects that were all interrelated and requiring simultaneous execution.
In a New Zealand first, two rigs were deployed at the same time, to drill four new production wells and two near field exploration wells. Some 21.5 kilometres of new wells were drilled. Critical to the success of the project were several downhole firsts, including the use of foam cement, inflow control devices and chemical tracers.
Invercargill-based PowerNet received the Community Initiative of the Year Award for a health and safety programme. It aims to have someone trained in first aid in every Southland home.
‘‘A recent example of its success, a 16-year-old student who had completed the course was able to recognise that his neighbour was
having a heart attack and provide first aid until help arrived,’’ the judges said.
Contact Energy received the award for the Health and Safety Initiative of the Year. Injuries reported in the year through June 2015 were less than half those a year earlier after the firm reduced the compliance focus of its health and safety strategy in favour of a broader focus on behaviour and staff empowerment.
‘‘One of the biggest revelations was recognising that people are human, they will make mistakes and that is okay. The important thing is to reduce the impact of those errors on people, plant and the environment,’’ the judges said.
Competition welcomed
Consumer NZ chief executive Sue Chetwin said the industry was becoming much more competitive, which had forced retailers to become more innovative to attract consumers.
‘‘The last 12 months has seen a step-change in the energy retailer sector. More companies are providing more and different ways for consumers to not only get but monitor their energy use. The industry has never been more competitive or more innovative. That makes our role as a watchdog even more crucial.’’
She said she had concerns that some of the new start-ups could find the going tough.
Over the past ten years, the number of customers who have accounts with small and medium retailers has increased from fewer than 50,000 to more than 170,000.
Chetwin said a number of the new entrants had complex online sites that were expensive to build and run. Some would probably find it hard to continue to attract customers and remain profitable in the small New Zealand market.
But she said that should not deter consumers from moving to a small start-up. ‘‘If anything were to occur, it’s not the end of the world, you can just find another provider. It’s not like the lights would go out. The Electricity Authority has an extensive system in place.’’
Chetwin said consumers had been the big winners as the industry went through significant change. The energy component of prices has remained static or fallen.
‘‘But let’s not get carried away, this is after years of it going up in leaps and bounds.’’