What is energy management?

An expansive warehouse showcasing a crane, brightly lit by LED lights

How it can help boost your business’s bottom line.

Energy is one of the most important and costly resources for any business. However, many small and medium-sized businesses are not aware of the potential benefits and opportunities that come with managing their energy more effectively. Energy management is not only about saving money, but also about improving your environmental performance, enhancing your reputation, and gaining a competitive edge. In this article, we’ll explain what energy management is and how you can implement it in your business.

Energy management is the process of planning, monitoring, and controlling the use of energy in your business. It involves identifying your energy needs, finding the best sources and solutions, and optimising your energy consumption and costs. There are five main areas of energy management and energy efficiency that you can focus on:

  • Energy efficiency: This means using less energy to provide the same level of service or output. For example, you can install LED lights, upgrade your insulation, or use smart thermostats to reduce your energy consumption and lower your bills.
  • On-site generation and storage: This means producing and storing your own energy on your premises, using renewable sources such as solar and battery energy storage. This helps you reduce the energy purchased from the grid and increase your energy independence and resilience.
  • Demand management and response: This involves adjusting your energy use based on lower cost periods or grid conditions. Demand Response is the voluntary turning off of equipment when the grid is under stress a few times a year, while demand management involves long-term changes in how energy is used (e.g. shifting usage to overnight). Demand management and response can help you save money, support grid reliability, and integrate more renewable energy.
  • Bill and tariff optimisation: This means choosing the best energy plan and tariff for your business, based on your energy use patterns and needs. For example, you can compare different energy retailers and plans, negotiate better rates and terms, or switch to a time-of-use or demand-based tariff that reflects your actual energy use.
  • Fuel switching: This means replacing your fossil fuel-based equipment and appliances with electric-powered ones. For example, you can replace your gas heating and hot water with electric heat pumps. This can help you reduce your greenhouse gas emissions and take advantage of the increasing share of renewable energy in the grid.

How can you get started?

Before you dive into more advanced energy management solutions, it is important to make sure you have the basics right. A simple energy health check can help you identify and fix some common energy issues that may be costing you money and wasting energy. Here are some questions to ask yourself:

Have you upgraded your lighting to LEDs?

LED lights are much more energy efficient and last longer than traditional incandescent or fluorescent lights. They can also improve the quality and comfort of your lighting. Many state or regional governments offer incentives to install LED lights in your business. While you may have already replaced the office and high bay lights with LEDs, don’t forget about the perimeter, exit, and security lighting. These lights can also benefit from LED upgrades and save you energy and maintenance costs.

Do you have a heat pump for heating and cooling in the office and is it relatively new?

Heat pumps are one of the most efficient ways to heat and cool your space, as they use electricity to transfer heat from one place to another, rather than generating heat directly. However, not all heat pumps are created equal. Over recent years, there have been considerable improvements in the performance and efficiency of heat pumps, and some states and regions also offer incentives to replace old units. It is also important to ensure the heat pump is appropriately sized for the space and, if possible, not installed in direct sun.

Do you turn the air compressor off when the workshop isn’t in use?

Air compressors are essential for many workshops, but they can also consume a lot of energy. Even a small air leak in a hose can have the compressor turning on overnight. A simple timer can fix this issue quickly and ensure the compressor is only on when needed. If you do have an older compressor, it may be worth looking at replacing it with a screw compressor, which is more efficient and quieter. You should also check the hoses for leaks regularly and repair or replace them as needed.

Do you turn off the zip boil unit in the breakroom turned off overnight?

A zip boil unit is a convenient way to make a hot drink in the breakroom, but it can also use a lot of energy if left on after hours and over the weekend. Again, a simple timer or programming the unit if it’s newer can have a material saving.

Have you checked your energy plan over the past 12 months?

One of the easiest ways to save money on your energy bills is to make sure you are on the best energy plan and tariff for your business. Energy prices and plans can change frequently, so it is worth comparing different energy retailers and plans and negotiating better rates. We highly recommend doing this for your home account too!


Keen to take your energy management to the next level? Click here to read another article that outlines some more advanced energy management solutions.

This article was published 09/01/2024 and the content is current as at the date of publication.