If you’d like to listen to the full discussion, the video is linked here.

Smart Strategies to Stay Within Network Limits

James DiLiberto, CEO of AZZO, introduced three key strategies to manage energy demand effectively:

1. Implement Energy Management Systems (EMS): These systems enable real-time load control and the integration of onsite generation—such as solar PV and batteries—helping sites operate within existing electrical limits.
2. Use Smart Controls and Monitoring: By collecting and analysing granular energy data, facilities can optimise usage, reduce peak demand, and enhance overall energy efficiency.
3. Integrate Onsite Renewables: Harnessing solar and battery storage not only cuts grid dependence but also eases the strain on legacy infrastructure, potentially deferring the need for upgrades.

Craig Morgan on the Value of Energy Efficiency

Craig Morgan, Group Sales Director at Northmore Gordon, offered further insight into how energy efficiency plays a vital role in this equation.

“When you reduce demand through energy efficiency, you’re not just lowering your bills,” said Morgan. “You’re freeing up capacity on your existing infrastructure, which can delay or eliminate the need for upgrades that often run into the hundreds of thousands—or even millions—of dollars.”

He shared examples of how Northmore Gordon has worked with industrial clients to conduct detailed energy assessments, helping them remain within the capacity of their existing transformers and feeders—thereby avoiding expensive and time-consuming grid upgrades.

A Strategic Imperative for Industry

With electrical network constraints increasingly common—particularly in older industrial estates and rapidly developing areas—these approaches are becoming critical for cost-effective growth. As Morgan noted, “In today’s energy environment, smarter use of energy is just as important as clean energy.”

The post How Energy Efficiency Prevent’s Costly Grid Upgrades at Industrial Sites appeared first on Northmore Gordon.

The path to decarbonising the electrical grid is well underway. Now it’s time to think about gas. If you have high gas consumption, there are few things you need to be considering. 

1. Make your current equipment as efficient as possible 

2. Consider what equipment can be electrified 

3. Look for biogas or green gas opportunities 

4. Green hydrogen is getting massive investment 

The Victorian Industrial sector used over 110 PJ (30 TWh) of energy in 2017 and 65% of that came from gas. The predominant use of that gas is steam boilers. The story is the same in other states. The Industrial sector is primarily fueled by gas and the commercial sector also has substantial gas usage for hot water. 

The trends bring gas into the spotlight are as follows:

1. Electricity is getting greener. In Australia, 25% of the electrical energy is now sourced from renewables. The grid emissions (the emissions factor) are dropping every year. 

2. Many companies are setting goals to decarbonize, or their customers are demanding they do. 

3. The gas is getting greener (less emissions), but it is hard and slow, however there are state and federal programs accelerating this. 

4. Green hydrogen (electrolysis from renewable electricity) is forecast to explode 

The message for C&I (Commercial & Industrial) is clear if you want to decarbonize you’ve got to look at your gas emissions as well. 

Gas Efficiency: In NSW and VIC business there are lots of old steam boilers it’s a no brainer to add economizers and O2 trim, electronic air/fuel ration and blowdown controls or to upgrade the whole unit. The NSW Energy Saving Scheme and Victorian Energy Upgrades programs provide funding for both calculated and measured savings.  For economizers up to 50% of the full costs will be cover by the programs. 

Electrification:  For hot water, we’ve reached the cutover point. You’ll now generate hot water with lower emissions by using heat pump systems using grid electricity than a gas boiler. 

• Using gas at 90% efficiency condensing boiler to put 1GJ of energy into hot water would produce 0.05523 / 0.9 = 0.0061 x 1000 = 61 kg CO2te
• To put 1GJ of energy into hot water using an electric heat pump with a COP of 5 and grid source energy with an emissions factor of 0.8 tonnes / MWh. 1GJ of energy into hot water.  (1GJ = 1/3.6 MWh x 0.8 / 5 COP x 1000 kg = 44 kg CO2te.  And when the grid reaches 0.5 tonnes / MWh this falls to 27 kg CO2te and potentially better with some heat pumps having even higher COP

The NSW ESS (Energy Savings Scheme) and VIC VEU (Victorian Energy Upgrade) have recently released new methods for Commercial & Industrial heat pumps. Dairy farms and industrial processes using large volumes of hot water can substantially lower their emissions by using heat pumps and much more so if they have behind the Meter Solar PV. 

Biogas, Biomethane and Green Gas: For the process that really needs gas (e.g. steam boilers), there significant funding can be obtained from capturing or generating biogas. Biogas can come from anaerobic digestion (AD) and covered anaerobic lagoons (CALs), from abattoirs, landfills, and syngas from pyrolysis (eg burning agricultural waste in the absence of oxygen).  The VIC VEU program provides funding for switching from natural gas to biogas.  The NSW ESS supports heat recovery from burning biogas. By using scrubbers and other methods can be used to upgrade biogas to biomethane and the Carbon Farming Initiative (CFI) recently added biomethane to many of the methods to support injection into the natural gas grid. With these advancements, we are just starting to see the development of in front of the meter PPAs to supply green gas and the energy retailers would love to be able to offer it broadly. 

Green Hydrogen: There is a very substantial investment going into the hydrogen economy. The expectation is that electrolysis (using electricity to generate H2) will see the same economy of scale benefits that resulted in Solar PV dropping massively in cost. This space is a watch and see as to how the gas industry will evolve to replace natural gas (methane) with hydrogen. 

Northmore Gordon can support your business doing the activities above. Our consultants can help identify which of the opportunities above will have the highest PA payback and capture the greatest amount of funding under different programs.

More importantly, if you are feeling gassy and bloated, we’ll identify the fastest way to reduce your gas emissions. Who wouldn’t want that!!! 

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That’s why we need plumbers and other skilled trades to turn plan into action.

Even though plumbers are doing the important work of actually installing new and more efficient equipment, many of them are leaving thousands of dollars on the table when they complete jobs without capturing the accompanying certificates that they deserve.

If you’re not used to regulatory language, it can seem complicated and burdensome. But when you realise just how simple the process is — some of it being paperwork that plumbers are already required to do — you will be able to earn up to an extra $3,000 per water heater installation.

For many plumbers, this could mean an extra $12,000 in hand every week.

What are the energy efficiency certificates?

Certificates represent a reduction in carbon emissions from qualifying energy efficiency upgrades. As state and federal governments ramp up their decarbonisation efforts, electricity retailers are required to show proof of progress by submitting an annual quota of certificates.

Replacing and upgrading water heaters is a qualifying energy efficiency job… and it’s one that many plumbers do routinely.

At the state level, both Victoria and New South Wales offer certificates for replacing water heaters. The Victorian Energy Upgrades (VEU) program aims to collect 6.5 million certificates in 2021. That number is set to rise to 7.3 million by 2025.

Similarly, the Energy Savings Scheme (ESS) in New South Wales penalises electric retailers who do not meet their target certificate quotas. On top of the VEU and ESS, the federal government also offers certificates. Plumbers can take advantage of both the federal and the appropriate state certificate when providing their service.

One way or another, certificates will be acquired. Since plumbers installing water heaters have already done the intense labour, they might as well be rewarded by allowing their work to count towards Australia’s carbon reduction plan.

How to collect the water heater certificates

Regulations and political dialogue can be tedious and seem complicated. Sometimes it is.

In the case of water heater certificates, however, the process is so easy and financially rewarding that plumbers will be looking for ways to add more water heater upgrades to their weekly project lineup.

Receiving a certificate can be as simple as:

• Taking 5 specified photos during the course of the water heater installation job &
• Sufficiently filling out paperwork for provided plumbing and/or electrical services

While the photos may be a new element to plumbers’ work, they are taken on-site and require little time. The paperwork is already a job requirement, so by simply understanding the appropriate details needed for regulatory purposes, plumbers will be able to take advantage of the lucrative certificates.

With the new water heater installed, the photos taken, and the paperwork filled out, the material is submitted to a regulator for approval. Once approved, appropriate certificates will be given.

How to monetise the certificates

Due to the large number of certificates needed by electricity retailers, participants will only be able to effectively monetise certificates in the wholesale market.

This can be challenging for small business plumbers who are doing one to three water heater jobs a week.

Fortunately, there is a simple solution that streamlines the regulatory process and assures you get paid for your individual certificates.

How Northmore Gordon makes the certificate process easy

At Northmore Gordon, we have the capacity to aggregate large enough quantities of certificates to participate in the wholesale market.

That means we want to make it as easy as possible for plumbers to get certificates and be fairly compensated for their critical work.

To streamline the certificate process, Northmore Gordon:

• provides training on what photos to take and what information needs to be included on paperwork
• shares an app outlining a step-by-step certification process so that plumbers don’t have to worry about missing something
• manages all of the third-party regulatory relationships once plumbers’ photos and paperwork is completed

Dealing with regulation is what Northmore Gordon does, so we want to remove the headache and uncertainty plumbers feel towards certificates and replace it with a steady cashflow.

A cashflow that you deserve for helping the state meet its carbon emissions goals.

When it’s all said and done, plumbers have already put the work in. Northmore Gordon is here to make sure that the work is properly recognised and that plumbers receive the payment they deserve.

If you provide water heater upgrades or other energy efficiency services, give us a call today on 1300 878 500 so that we can get you set up to make an extra $3,000 per installation.

The post Proven Way To Make An Extra $3,000 On Every Water Heater Installation appeared first on Northmore Gordon.

Similarly, Measurement & Verification (M&V, also known as MRV) protocol assures performance of energy conservation measures (ECM) and significantly improves businesses’ capacity to realize energy savings —  savings that result in lower energy costs and fewer expenses on operations and maintenance.  

Considering the pivotal role that Measurement and Verification (M&V) plays in guaranteeing energy and cost savings, it’s important to maintain the diligence, rigor, and transparency that make M&V so reliable and effective.  

Given the worldwide disturbance caused by the Covid-19 pandemic, we want to share insight from one of Northmore Gordon’s Principal Consultants, Alan Wang. Interviewed last week, Wang addresses the importance of recognizing Covid’s impact on M&V and what we can expect for its future. 

Q: FIRST, WHAT DOES M&V ENTAIL?  

AW — An M&V method is a well-defined, transparent means of measuring and verifying performance of an energy conservation measure (ECM) so as to identify the true energy savings the ECM brings the facility. Using a statistically valid modelling approach — such as linear regression modelling or estimate of the mean to model baseline conditions — M&V reveals true energy savings of an ECM under normal operating conditions of the facility.  
 

Q: WHAT ARE THE RELEVANT STANDARDS FOR M&V?  

AW — M&V measures must adhere to rigorous and well-defined standards in order to maintain reliability and credibility. The International Performance Measurement and Verification Protocol (IPMVP) has become the international gold standard for M&V. The IPMVP offers a versatile and flexible framework which allows for energy consumption estimates to be made using a proxy. This, however, is not permitted under any of the Australian M&V measures.  

In New South Wales, the Energy Savings Scheme (ESS) uses a couple of methods (PIAMV and MBM) which are both M&V based but operate under stricter guidelines than the IPMVP. Under Victoria’s Victorian Energy Upgrades, there is a similar M&V based program known as Project Based Activity (PBA).  

Q: HOW HAVE THE M&V METHODS RESPONDED TO COVID?  

AW — IPMVP released a Covid guide late last year which has enabled businesses to adopt adjusted guidelines for their Covid impacted facilities. The IPMVP Covid guidelines allow businesses to be flexible with their ‘Covid impacted period,’ allowing businesses to backcast or forecast the Covid impacted period to baseline or operating conditions so as to minimise the issues coming from Covid between those affected dates.  

In Victoria, there was a six-month delay for the release of the finalized Covid guidelines. That put a delay on the release of M&V certifications, some of which were delayed by as much as 18 months.  

New South Wales was not heavily impacted by Covid. There were few cases, but we do anticipate consultation for Covid guidelines to start in the near future and for final guideline papers to be released in the first half of 2022.  

Q: HOW HAS COVID IMPACTED CONDUCTING M&V FOR INDUSTRIAL BUSINESSES?   

AW — The widespread impact Covid had on consumer lifestyle caused significant changes in industrial production. Some manufacturers needed to increase production to match growing demand while others decreased production in response to lower demand or disruptions in their supply chain.  

For example, one of our clients is a coffee pod manufacturer that saw a 400% increase in production because of heightened demand for coffee at home. Although this was great for the manufacturer’s revenue, the production increase posed a huge problem for M&V measures. The increased production heavily skewed the amount of energy consumption per product produced, lowering our confidence in the energy KPI. This abnormal production volume necessitated some timeline adjustments to the baseline and operating period in order to claim the savings of the certificates, and not all anticipated credits could be claimed.   

In another example, an abattoir experienced reduced production and delayed fuel delivery. Without normally delivered fuel, the abattoir went through month-long stretches without showing much fuel consumption. This change in activity significantly impacted the energy KPI, making M&V measures a real challenge. 

Q: HOW HAS COVID IMPACTED CONDUCTING M&V AT BUILT ENVIRONMENT SETTINGS?  

AW — With lockdowns instituted during Covid, many people were not going into work at retail settings. In several cases, a lower occupancy led to decreases in energy consumption, which resulted in M&V delays in order to gather sufficient data to assess true energy savings from the ECM.  

It’s easier to anticipate the impact of Covid on built environment settings than on industrial operations because occupancy is the primary factor impacting built environment whereas the industrial sector is affected by a wide range of interconnected variables that are difficult to predict. 

Covid does impose a number of challenges for M&V. Fortunately, there are different modelling techniques and other flexible guidelines which allow M&V experts to adjust timelines and carry out their Measurement and Verification measures.  

There will be issues going forward as Covid persists, but energy efficiency improvements are arguably the most impactful start for businesses striving to reduce energy demand, save money, and lower their carbon emissions.  

At Northmore Gordon, we are well aware of the challenges, and we are ready to help businesses carry out energy conservation measures and the appropriate M&V method to make sure they effectively decarbonize and capture their true energy savings. 

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The post Webinar – Introduction to Certificates and Carbon Credits with Measurement and Verification (M&V) appeared first on Northmore Gordon.

This announcement increases the previous targets for 2022 to 2025, announced in 2016, by 0.5% per year, meaning the 2025 target has increased from 8.5% to 10.5% of electricity supplied. This rate of increases continues year-on-year through to 2030, targeting savings of 13% of all electricity supplied to end customers. In line with previous target setting, the goal for 2030 to 2050 is currently set at 13% per year, but as the government has done before this likely to be reviewed at the five-yearly target setting. Importantly, this is the first time a target has been set more than ten years in advance and indicates that the ESS is likely to be a key part of NSW goal to achieve net-zero by 2050.

The final certificate target for 2020 is yet to be released by the regulator as the annual compliance deadline doesn’t fall until April, but the 2019 target was 4.6M ESCs. The creation for 2020 activities to date is 3.7M ESCs, down 24% on 2019 with the 2020 compliance surrender yet to be completed. If the 2020 target is similar to 2019, there will be a surplus of 4.3M ESCs – or another way to look at it the program is 11 months ahead of the target.

Looking forward it is hard to know what the annual ESC target will be, as the future energy consumption is not known, but based on the latest NSW consumption forecasts by AEMO out to 2030, the 2021 target could be 5.5M ESCs increasing to 8.4M ESCs per annum by the end of the decade.

During 2019, activities under the ESS saved 2.8 TWh of electricity, 520 TJ of gas, avoided 2.6M tonnes of green house gases, and saved NSW consumers $235M. The cost of the program to electricity customers was estimated to be $88-112M representing a return on investment of 109%. These savings also contribute to demand reduction across the state reducing the cost of transmission and distribution assets.

The Energy Savings Scheme is a market-based mechanism that was implemented in 2009 with the goal to provide financial incentives for business and residential consumers to undertake energy efficiency upgrades. The approved activities cover “deemed” upgrades – where there is a pre-determined level of savings based on the upgrade and is available for specific technologies – there is also the technology-neutral “Measurement and Verification” approach. Whilst an M&V approach is more complex and takes longer to complete it enables the full value of the savings to be realised. The program supports many types of upgrades ranging from industrial boilers, refrigeration, improving NABERS ratings, air-conditioning and HVAC, LED lighting, high-efficiency appliances, and many bespoke upgrades in the commercial and industrial sectors. The NSW government has continued to make the ESS an integral part of their energy strategy, expanding the program into the Energy Security Safeguard which will incorporate a future demand response mechanism.

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Energy efficiency equipment payback drastically reduced.  The payback period for many capital equipment purchases can be drastically reduced (40% or greater).  Be it Boilers, Chillers, HVAC, UPS, Motors, VSD, Compressors and Blowers.

The Federal Budget announced on the 6th of October that nearly all businesses will be able to fully deduct capital equipment purchases in operation by June 2022. If you couple this with the state based energy savings scheme (NSW, ESS, VIC, VEU) then a business can substantially reduce their energy costs, and achieve a much shorter payback.  With the added bonus of the higher reliability and lower maintenance that comes with new equipment.

Take for example the upgrade of a 6MW Gas-Fired Steam boiling is using say 45,000 GJ PA at recent prices of say $11.00 per GJ and hence $500,000 PA in gas charges.  The upgrade to a new high efficiency boiler with economiser, O2 trim could cost around $800,000.  The efficiency gains from moving from a 30 year old boiler to a modern one could be as high as 30%, but we’ll use a 25% reduction in gas usage for this example and hence annual gas savings of 11,250 GJ PA. Prior to the Federal Budget (and after June 2022) a new boiler asset would need to be depreciated over 20 years.

The figures for the new boiler commissioned by June 2022 are as follows

• Immediate tax writeoff 30% x $800,000 = $240,000
• Compared with tax write off over 20 years = $12,000 per annum 
• Energy Saving Certificates = $110,000
• Capital Costs (after tax writeoff and certificates)
  • $800,000 – $350,000 = $450,000
• Annual Gas Savings of $11.00 x 11,250 = $124,000

Compare the three scenarios

No tax cuts & not claiming environmental certificates

• Simple payback = $800,000 / ($124,000 + $12,000) = 5.9 years

Using tax cuts & not claiming environmental certificates

• Simple payback = ($800,000 – $240,000) / $124,000 = 4.5 years

Using tax cuts & environmental certificates

• Simple payback = ($800,000 – $240,000 – $110,000) / $124,000 = 3.6 years

Hence by performing the upgrade with the new Federal Budget changes reduces the outlay by more than 25% and brings down the payback period substantially. Also be aware that with the changes that allow companies to offset future losses against past profits for the financial years of 2020-2022 means that you can carry back losses (ie the capital cost) to reduce last year’s tax bill as well.

Boilers are one asset type that uses a large amount of energy and has the potential to save substantial energy, but the same applies to many other equipment upgrades that will drive substantial energy savings.  Consider these aging assets for replacement by using the immediate tax depreciation and NSW Energy Saving Scheme or Victorian Energy Upgrades to drive much short payback periods.

• Gas-fired Steam Boilers in Industrial process
• Gas-fired Hot Water Boilers for Commercial Buildings
• Chillers for Commercial HVAC
• UPS and CRAC upgrades for Data Centres
• Air Compressor upgrades
• Variable Speed Drives for large motors and fans (very fast payback)
• Warehouse and Orchard Coolroom upgrade 
• Installation of Large Scale Solar PV in Victoria under the VEU
  
  

All these assets can claim energy savings certificates using the Measurement and Verification methods under the different state-based schemes as well as under the Australian Carbon Farming Initiative (Carbon Solutions Fund).

Image courtesy of: couriermail.com.au

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ESS Commercial Lighting Requirement Changes – Effective November 1, 2018

A summary for the ESS Rule change effective from November 1, 2018.  Any existing activities must be registered with IPART prior to the 1st of November in order to claim the existing ESC quantities.

• There is now a cap on the Nominal Lamp Power (NLP) for High-Intensity Discharge (HID) Lamp i.e. Mercury Vapor Lamp, Metal Halide Lamp for use in indoor spaces at 400W. Lamps with a higher NLP can only be claimed at 400W.  Outdoor fittings on the external faces of buildings can be claimed at the full wattage.
• The table below shows how the asset lifetime values have been manipulated to stimulate growth in underserved areas. A discount rate has been applied to most metro installs to promote more regional installs. While car parks and certain types of factories have been bumped up to stimulate more installs in metro and regional areas.

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