Cost‐effective solar power system for your business

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Cost‐effective solar power system for your business

Cost‐effective solar power system for your business

The deployment of grid‐connected photovoltaic (solar PV) systems continues to grow at an impressive rate. In 2018, there was a 30% increase in systems implemented and it continues to move forward. Most of this growth involves residential systems, which have an 80% share of the connected capacity in NZ. Where's the growth in commercial solar pv systems? Why are the industrial and commercial sectors lagging behind? The following article was written by Perry Hutchinson, who holds a Master of Engineering Studies in Renewable Energy Systems and has 30+ years of experience designing and implementing industrial electrical systems. One benefit drives decisions about solar PV for industrial/commercial use... Commercial Solar Power System Cost The New Zealand Smart Grid Forum identified that although residential consumers consider a range of potential benefits ‐ such as energy independence, environmental impact and a desire to participate in the technology ‐ sound economics is what drives industrial and commercial consumers. So the challenge in photovoltaic design is to present solar as a viable business investment in New Zealand, even though we lack the government subsidies and generous feed‐in tariffs enjoyed in many other countries. What is a feed‐in tariff? Feed‐in tariffs (FIT) offer you a defined payment for the energy you feed into the grid from your solar PV system. In New Zealand, this can be as low as $0.04/kWh. When generous feed‐in tariffs are available, the key constraint to system size is essentially the available space for the PV array; for viable projects, the bigger you build it, the greater the return. However, having low feed‐in tariffs changes the whole approach to system design. There is a tipping point where increased size (and increased investment) actually results in diminishing returns. Forget feed‐in tariffs. Focus on offsetting electricity costs The viability of a PV system (photovoltaic system) with low feed‐in tariffs depends on offsetting electricity cost. And offsetting electricity cost depends on discovering the optimal level of self‐consumption. There is a tipping point for self‐consumption with on‐grid PV systems. This is the maximum size of the system where we still achieve 100% self‐consumption. Building the system larger than this results in some of the PV generation being fed back to the grid and therefore, self‐consumption starts to fall. Generation Profile for commercial solar power systems But with the generation profile changing ‐ not only seasonally, but also daily and hourly ‐ what is this optimal level of self‐consumption? A system size maximised for 100% self‐ consumption in summer will fall short of that in winter. Conversely, a system size maximised for winter will over‐generate in the summer (and lower self‐consumption as surplus is fed back to the grid). Load Profile for commercial solar power systems In addition to this, load profile must also be considered. What if the load is biased towards the morning or biased towards the afternoon? This could impact the optimal direction you orient the array (the azimuth). For example, a more westerly orientation may be better for load profiles with an afternoon bias. Tariff Structures for commercial solar power systems Tariff structures could have a similar effect. We have worked with clients with quite complex tariff structures that could influence array configuration. For example, high morning tariffs could mean a more easterly orientation is better. Obviously, each situation is unique and requires something more than an “out of the box” solution due to the complex interplay between these constantly changing variables – the solar resource, load profile and tariff structure. Our approach to getting Solar Power right Traditionally, a project’s net present value (NPV) is used to evaluate and prioritise projects. NPV takes into account the time value of net cashflows over the life of a project by applying a discount rate. But rather than treating this as an “endpoint” calculation, at Pacific Energy we use NPV to optimise the PV design. We model a system on an hourly basis over a year using NIWA weather data, the tariff structure and load profile from the time‐of‐use meter as the key inputs. The model then finds the optimal combination of size, tilt and azimuth that maximises the NPV of the project over its 25‐year life. The maximised NPV reflects the optimal level of self‐consumption for the system which in our experience can be anywhere between 85 – 95% on an annual basis. This provides the starting point for more detailed design to be undertaken. For solar projects, Total Utilities partners with Pacific Energy whose focus is on bringing sustainable energy projects to life. By combining sharp economic analysis with a deep understanding of industrial power systems, they design and specify viable and pragmatic solutions that optimise energy use and reduce carbon footprint. They are experts in system analysis and provide unbiased, independent advice for investment decisions.

Energy Savings in a Rising Market

Energy Savings in a Rising Market

The retail price of energy for large commercial customers in New Zealand will remain elevated in 2020-21. So what are you going to do about it? New Zealand’s large commercial market for electricity and natural gas has been on a roller coaster ride for the last 2 years, the likes of which have not been seen before. There are numerous drivers that influence market movements. Fundamentally though it comes down to the balance between availability of supply and user demand. Oil, gas, thermal and hydro The Government’s decision to ban future offshore oil and gas drilling put an end date on New Zealand being able to meet all of its natural gas requirements. The closer we get to the end of current supply the higher the price will climb. Supply issues with our largest field, Pohokura during 2018/19 and reduced gas production overall has more than doubled gas spot pricing from 2016/17. In dry years, the electricity system relies on natural gas and coal to provide security of supply. This is for both base load and peaking generation. With little to no new renewable base load generation planned in the immediate future, the market price is largely driven by the use of thermal based generation. As consumers of electricity and natural gas, we have no control over the market. However here are a few prudent measures that can be taken to mitigate cost increases in a rising market. Strike while the iron is hot Electricity and Gas procurement should not be a once in a 2- or 3-year event. Leaving purchasing decisions to the last minute can have significant negative consequences. You may only have limited options, having to accept what the market is offering or move to expensive default rates. If there are short term constraints in the market, then pricing may have been more cost effective 3-6 months ago. Aligning your procurement strategy with a specialist energy consultant provides independent advice and a view of wider market considerations. This is particularly important when setting budgets for the following year. Have I got a deal for you? Incumbent retailers will at times be proactive in offering “deals”. However, this is usually from their view of the world and can be part of a defence strategy to sidestep customers reviewing the wider market. In a rising market, we typically see a significant accordion effect. This is where the difference in prices offered can range more than 20%, even among the large generator retailers. Without context, pre-emptive renewal offers can at times be viewed with suspicion. A specialist energy consultant can vet such offers quickly. Understanding the market means pricing is checked against offers they are currently seeing. Advice can then be provided whether to accept the offer or go to market. The mystic art of Power Factor Often missed on large commercial invoices are power factor related penalty charges. These are billed by the electricity retailer on behalf of the local network distribution company. Not all networks charge large commercial customers for poor power factor, but when they do the related charges can be avoided with correction equipment. (See: what is a power factor correction unit?) There are a multitude of off the shelf solutions out there, however employing a specialist power factor company that designs solutions specific to requirements ensures you get the best bang for buck on your investment. If correction equipment is already installed, make sure that this is added to your maintenance plan. If well looked after, correction units should last 10 years or more. They are susceptible to heat degradation. A quick check to make sure that air extraction fans on the units are work correctly and filters are kept clean can extend the life of the unit. Rectifying power factor related issues can also help reduce peak KVA demand and associated costs if these are being billed by the local network company. The secret life of kilowatts Do you know how much energy your business uses when you are not there? Energy monitoring combined with energy data analytics will help you identify energy wastage. Monitoring electricity use with real time energy analytics can also alert you to potential issues during operational hours. This will allow you to act immediately rather than just seeing the impact on the monthly invoice the following month. With the rapid evolution of the internet of things, energy monitoring as a service is more cost effective than ever. Are the good times over? Unless there are structural changes in the market, Total Utilities does not see the retail price of energy for large commercial customers doing anything but remaining elevated (+/- 25% higher for electricity and +/- 45% for natural gas) compared to the 2013-2018 period. A combination of dry weather, growth in the New Zealand population, general growth in usage and Government policy have put this in place. Having an Energy Strategy that aligns with your business strategy and planning ahead, being proactive in minimising wastage and understanding where savings can be made will minimise the impact of rising prices.

Drive energy efficiency through data

If you don't know precisely how, when and where energy is being used across your business, how can you understand where your energy costs really lie, or the best opportunities to improve energy and operational performance? Working together with Centrica Business Solutions, Total Utilities is the exclusive partner delivering the Energy Insight product solution to the New Zealand market. Using Centrica’s wireless sensor technology, you can monitor energy usage in real-time – right down to device and equipment level. When this information is relayed to our PowerRadarTM analysis platform, you can access the intelligence you need to develop a data-driven energy strategy. The Power of IoT Our Internet of Things (IoT) technology is providing the deep energy insights that uncover flexibility and value in your operations and generation assets. This is a 'game changer' in raising energy performance across all types of organisations ­– from manufacturing and leisure ­­­­­­­­­­­­– to healthcare and education. Energy Insight technology provides full visibility of energy usage across your site, or multiple sites – right down to individual device level. We attach self-powered, wireless sensors to equipment and processes, such as conveyor belts, lighting circuits, chillers, or any other energy consuming assets. This instantly transmits real-time data to our cloud-based PowerRadar analytics and reporting platform. You can then access this intelligence to inform your decision making and improve efficiencies. Deep energy insights Hundreds of sensors, which can measure both heat and power consumption, can be installed within a few hours and won't cause disruption to operations. Data provided by our IoT technology enables organisations to quickly identify and resolve energy waste. It can also pinpoint opportunities to reduce high peak-time energy costs by moderating consumption in these periods. The biggest gains of IoT energy insights are often seen in improved operational efficiency and business resilience. By ensuring that critical equipment is operating optimally and preventing costly disruption, or even breakdown, large operational cost savings can be achieved. Continuity of operations is also assured, which is particularly beneficial in manufacturing environments. The results of IoT energy optimisation We're seeing the positive results of our IoT enabled energy optimisation across all business sectors, including Progressive Enterprises New Zealand. Read the full case study below. Case-Study-Mt-Eden-CountdownDownload

Get your head in the cloud

Why cloud is crucial for a sustainable business, and how to choose the best option. The Covid-19 outbreak has reinforced two lessons for businesses – the importance of cloud-based services and the need to ensure their model is sustainable. Cloud platforms have really come into their own, providing accessibility for remote workers and customers, while providing the ultimate scalability for businesses facing an uncertain future. But in a world where both the economy and environment are facing unprecedented challenges, it is more vital than ever for business owners and CFOs to make informed business decisions. Choosing the right cloud option can be daunting, and a truly sustainable business needs a clear understanding of the financial and business case drivers to help make the right decisions. Review the business model Changes are happening at a rapid pace in today’s business environment, with many companies looking at downsizing and improving their remote working capabilities. Even beyond the extremes of a pandemic, acquisitions, new ventures, upturns and downturns all provide daily challenges for senior managers. Over the last few years, the focus of major decision-makers has moved away from in-house tech infrastructure and experts and towards more flexible and agile cloud models and platforms like Microsoft Azure that best fit their way of working. Before making any investment in IT infrastructure or platforms, ask whether they can adapt if your business needs change in the future. Nothing illustrates how quickly the business environment can change as the infographic below. The infographic shows the vast drop in consumption of electricity since Covid-19 hit New Zealand. Many businesses were unable to operate from their normal offices and stores. While most have adapted to working from home, the shutdown had a huge impact on commercial electricity consumption. While major industry consumes a third of all our energy, the wider commercial sectors consume a further quarter of New Zealand’s electricity demand. It is this quarter that we can reasonably assume to have almost completely evaporated when the lights went off. Although the future is opening up and consumption is starting to rebound, businesses are now focused on new ways of consuming energy or delivering services. Many CFOs and CIOs are trying to figure out this new way of working and how it affects their own businesses. The days of the road warrior salesperson may be coming to an end. How we engage with, incentivise and add value to our clients will look very different, as some may prefer a call from the office or a virtual meeting to a corporate lunch. Customers too will be feeling the impact, with online engagement becoming the predominant form of communication, and Microsoft Teams, Zoom, and Hangouts becoming an integrated part of working culture. In addition, Covid-19 has caused a large shift in the global economy and supply chain. Secure production and supply are increasingly of greater importance than the cheapest or most efficient options, which has led to a greater focus on in-house production, multiple suppliers or regional stockpiling. The result of all this is we can no longer trust the stability of the surrounding environment. While we may see some return to the old ways of working, some business processes will never be the same again. Business managers therefore need to be prepared to constantly review business models and consider whether their technology needs are still being met by their current system. This will help ensure their business remains sustainable in a world that can change drastically in what seems like a second. Plan for the rebound Businesses are now furiously planning ahead for the future. Many will need to start scaling up or down to stay on track with fluctuating demand. Working through the challenges including staffing, supply chain logistics, stock management and managing demand will impact most businesses, not to mention the increasing expectation they will reduce their environmental footprint. Kiwifruit producer Zespri is a classic example of how to approach this kind of situation. In 2010, it was dealing with the PSA Virus, which caused entire crops of kiwifruit to fail. The popular gold kiwifruit was the most affected variety, spurring Zespri scientists to research a resistant strain. They knew the situation could have gone either way – with the opportunity to double production if the new strain was successful or ultimately halve if the research failed. Zespri was concerned about having enough computing power to cover existing demand while preparing for both the best- and worst-case scenarios. With support from Total Utilities to assess its existing IT costs and consumption, Zespri was given a list of options that projected the business outcomes and costs for each. It could either continue managing and maintaining its own data centre, outsource its data to another local vendor, or switch to the public cloud so it could replicate the same platforms around the world. Zespri chose the latter, moving its infrastructure and associated platforms onto the Microsoft Azure Cloud. This decision helped Zespri cover a multitude of potential problems by removing the financial risk of investing in its own tech infrastructure, allowing rapid expansion of a global supply chain and delivering detailed cost control mechanisms. Providing Zespri with financial operations toolsets allowed it to efficiently manage costs and consumption, which was repaid as Zespri’s research gamble paid off and the business grew in scale. Measures such as “cost per tray of kiwifruit shipped” have become an important way of tracking success. Zespri has used subscription cloud services as an effective way to manage, analyse and contain its costs ever since. Not only does that mean Zespri is able to adapt its model to any scenario, not having a data centre on site reduces both energy consumption and space. The business is therefore more sustainable in every sense of the word – something consumers around the world increasingly expect. Microsoft itself has committed to removing all carbon it has ever emitted directly or by energy consumption from the environment by 2050, reinforced by its pledge to support New Zealand’s sustainability goals through its new datacentre investment. As every organisation on the planet is challenged to review its impact on the environment, choosing greener IT options is a great way to minimise your footprint. As the adage goes, the only certainty in life is change. While an upfront investment during downturns can be daunting, the best way for any business to safeguard its sustainability long-term is to invest in an IT system that doesn’t become obsolete, that meets modern expectations around environmental impacts and which allows workers the greatest accessibility in an era when many of us are now working remotely. And that means embracing the cloud. Ensure resilience A resilient network and good technical support are essential to every modern business. There is an expectation for email, purchasing or sales automation to be working around the clock. Software updates, testing or hardware failures are no longer an excuse for disrupted services, which can instantly see customers go elsewhere. Just five years ago, businesses were put off moving their platforms and operations to the cloud because they weren’t sure about achieving the level of compliance and technical competence they needed to operate the systems. Every business we consulted felt the skills to manage cloud migration were a barrier to digitising their operations, and that only in-house experts could provide the support needed. That figure is now just 40 per cent. Trust in the cloud and cloud providers to manage their businesses and tailor their services to their needs has skyrocketed. Likewise, secure and reliable connections are more available than ever. While some thought the demand put on the internet during this period of working from home wouldn’t hold up, the Covid-19 lockdown has proven how resilient the internet can be. It is a credit to our network providers, whether fibre, copper or mobile data-based, that these services have remained largely in place as millions of people have suddenly put tremendous demand on capacity. This shows that network availability is no longer a constraint holding back businesses from placing their operations and services in the cloud. Those organisations using public cloud services are also better placed to combat the predatory players who sought to take advantage of the situation via scams and cyber-attacks, with regular security upgrades not available to those using an outdated server in the back office. No longer can you place your trust in simply ‘doing it yourself’. Instead, managed cloud-based services can prove more secure and reliable. Security and connectivity is complex to establish and even more challenging to maintain, especially when scarce, skilled resources are in high demand. Establish good financial governance Whichever cloud service you use, make sure to choose a partner or platform that can provide real-time analysis and reporting so you can see exactly how it’s working for your business and change your plan if you need to. Governance, cost control and resource efficiency have always been top priorities for businesses. Now more than ever, businesses are focused on getting the best value for money from their technological solutions while growing a sustainable business. One thing cloud-based platforms do very well, thanks to their sheer accessibility and ease of use, is enable workers to use a huge range of resources and implement their own changes and updates. However, if unconstrained, this can result in wastage and bill-shock. While governance and budget setting have provided the framework for cost control and planning for decades, moving to the cloud requires a new level of collaboration between Finance and IT. Ensuring these two teams remain communicative through the cloud integration process is vital to ensuring it runs smoothly and efficiently, that the right functionality is baked in from the beginning and there are no budget surprises.  As well as close co-operation, the key to ensuring total visibility and that cloud services are providing the best value, is using a monitoring service to provide real-time data on how cloud is being consumed across the business. The best services can illustrate exactly how resources are being used – either energy or data – and enable CFOs and other decision-makers to rapidly change to new plans that are better for the environment and the bottom line. Clear and regular reporting is essential and takes a great deal of time and effort out of maintaining good governance. Cloud is the future of many businesses and in a time of so much change and uncertainty, it is important to know your business has a model it can rely on to save costs and make governance far less onerous. To know that your business is making most of out your cloud service, make sure you have reporting in place so you can accurately reflect usage in real time, limit your expenses and energy consumption and create a business model that’s truly sustainable for many years to come.

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