Total Utilities has assisted many clients in making long term immediate savings by identifying power factor issues and providing turnkey services to rectify the problem.
All businesses need electricity. All people in a modern society like ours need electricity. The trouble lies in finding balance between combatting climate change and generating enough electricity to sustain our population.
We all know and understand the importance of decarbonizing given the ominous challenge posed to us by climate change globally. But, New Zealand is a small, remote country which only accounts for 1/15th of 1% of the world’s population of 7.5 billion.
New Zealand’s electricity and natural gas markets are inextricably inter-linked. Electricity and gas compete as alternative energy sources, but rely on each other for production. Electricity generation is the second biggest user of natural gas after methanol production by Methanex. Gas is the second biggest source of electricity generation after hydroelectricity.
With this intricate dependence on one another, the effective management of our national energy strategy (including electricity and gas etc) is critically important to our continuing economic health and hence to the well-being of all 5 million kiwis.
The outright prohibition three years ago of all new offshore oil and gas exploration, is having a profoundly negative impact on the natural gas sector and hence on the health of the electricity sector.
No matter how well intentioned this original decision was, it was not thought through properly at the time. The recent apparent softening of the Government’s stance on the role of natural gas as a transition energy source on the road to 100% renewability is, however, to be commended.
Coal-based electricity generation in 2020 was the highest for a decade.
It’s unfortunate that, as a result of these policies, coal-based electricity generation in 2020 was the highest for a decade. This coincided with the lowest gas-based electricity generation for nine years.
Given that coal emits +/- 1.9 times more CO2, on a gigajoule-for-gigajoule basis than natural gas, this is an environmental step backwards. In this regard, coal imports of +/- 1 million tonnes from Indonesia in 2020 are currently on course to triple in 2021 as we understand it.
The negative impacts of the above prohibition have unfortunately been compounded by various other negative electricity supply and demand factors since then.
These factors have included:
Pohokura has been our biggest natural gas field for some years. During the past two years however, production has fallen sharply for unspecified technical reasons. This decline in gas production has reduced gas supplies available both for gas users and for electricity generation.
The prohibition of all new offshore oil and gas exploration, has also meant that there will be no offshore oil rigs available in NZ waters until 2022, at the earliest, to identify let alone resolve the ongoing production problems at Pohokura.
Other gas supply options have been constrained in the longer term by the non-renewal by the Government of existing offshore field permits for undeveloped fields, once their initial term had expired. Previously, successive Government’s lead by both major parties renewed these permits unless there was a compelling specific reason not to.
Seriously damaged gas industry morale has also resulted in a combination of reduced/delayed/cancelled capex in existing gas fields.
Competition has essentially collapsed at the big end of the gas market.
The profound uncertainty surrounding the shorter term, let alone longer term, future of the natural gas industry has already resulted in Contact Energy vacating the time of use (TOU) part of the gas market as TOU agreements covering supply to larger customers expire. Two other gas retailers have also declined to quote for supply to various existing TOU customers.
We are also well aware of other very large TOU gas users (not our clients) who have to use natural gas and have been forced onto punitive spot market-related gas pricing. Major electricity-users like Whakatane Board Mills have also had a huge question-mark over their future due to huge gas-related electricity price hikes.
There is still some limited competition in the non-TOU part of the market (impacting smaller customers), albeit at much higher prices. To all intents and purposes, competition has essentially collapsed at the big end of the gas market.
Looking to the future, New Zealand must formulate an integrated supply/demand energy strategy covering the transition period until 100% renewable energy is achieved in practice. Much like the cross-party Superannuation Accord in the 1990’s, we need a similar cross-party accord now in this vitally important area.
As such, the Government should:
To conclude, the appetite for future investment in the gas infrastructure is key to improving certainty in the market. Not only does it send signals to the sellers of natural gas but also to major users who are often multinational organisations. If it becomes more apparent that investment will be very limited, these organisations could very well leave NZ prematurely, obviously impacting employment, business activity and tax revenue.
Business and media enquiries can be made to Total Utilities.
See how Total Utilities helped a leading NZ retail chain achieve easy savings through intelligent energy insights from our Panoramic Power real-time energy management solution.
With 94 sensors installed across several sites on critical systems, they were able to cut costs, reduce carbon emissions, and progress toward sustainability goals.
Discover how real-time energy monitoring can lead to big savings and help your business meet sustainability goals. Check out the full case study now!
By 2050, the government has pledged to eliminate emissions of long-lived greenhouse gases, and to reduce biogenic methane emissions by between 24-47%. This means energy pricing is changing fast! While this is good news for the environment, it requires business to make some major adjustments.
Let’s look at the impact of these changes and then the solutions that are available to you.
New Zealand’s main gas field has been experiencing production issues since 2018. This year, their production is already down by 42%.
This significant shortfall is having a heavy toll on electricity generation. By 2030, gas production is expected to be half of what it is now.
Natural Gas or LPG fired boilers have lower emissions than their coal-fired counterparts. But we have seen oil and gas exploration companies already hand in their exploration permits because of New Zealand’s policy changes.
Because of this, access to gas is becoming far more restricted. When production declines but the demand is still high, prices inevitably rise.
This has led to an increase in using coal as a substitute. In the South Island, for example, where there is no natural gas, many boilers remain coal fired. Having said that, some are attached to reticulated LPG networks in Christchurch, Queenstown and Dunedin.
But by 2022, a ban on new low and medium temperature coal-fired boilers will also be enforced, with a proposal to phase out any remaining coal boilers by 2037.
This will severely undercut the feasibility of these coal-fired burners in the near future.
You need two action plans:
The good news is Total Utilities can help you now and well into the future. Plus, we’ll regularly review and track your progress.
For our large commercial and industrial gas customers, we are now seeing an increase of around 180% in cost as they come off contracts signed three years ago. Despite the increase, gas is still a cheaper source of fuel than electricity. But it is fast catching up. As gas supplies further decline, gas prices will only continue to increase.
What’s more, the Emissions Trading Scheme (ETS) continues to pose further costs.
The chart below shows the upward trend in total costs from raw gas pricing and the ETS scheme over the last three years:
We are helping clients by tracking the trends of retail gas prices and negotiating cost-effective gas contracts. We also help you save money by optimising what you have for the remaining lifespan of your current heating systems.
Working closely with the specialists at New Zealand Energy Systems, we help you decarbonise and eventually replace your boiler. We do this by understanding the energy source, the technical options for replacement, and what triggers price changes.
Moving from fossil fuels to electricity, or to another renewable energy source will reduce emissions and help New Zealand achieve its goal of being Net Zero by 2050. In some cases, existing coal-fired boilers with decades of life remaining can be converted to burning biomass instead of coal.
However, in some regions, such as Canterbury, the supply of woody biomass residues falls short of the energy demand for process heat. Total Utilities considers these variables and complexities in your long-term plan.
With increased energy pricing on the cards, now’s the time that you get significantly more bang for your buck when you invest in energy and carbon reduction projects.
The team at Total Utilities can help you achieve energy efficiencies for the remaining lifespan of your current systems. We do this by conducting a low-cost study into your energy consumption and identify ways you can save money.
Over the long-term, a switch to carbon reduction energy sources makes sense for the environment and your bottom line. That’s why, when you’re ready, the team at Total Utilities can guide you through the switch to solar and other renewable energy sources.
Contact us today to turn cost-effective, environmentally friendly strategies into action.
After over 20 years leading us, Richard Gardiner is handing over the reins to Jonathan Gardiner on 31st March 2021.
Today we want to formally thank Richard, look back on how far Total Utilities has come under his watch, and welcome Jonathan as our new MD.
The story starts in 1983 when Richard was transferred by GEC Turbine Generators from Rugby in England to Johannesburg. He worked in South Africa for a decade, initially at GEC before moving to the BOC Gases Group. He studied for his MBA at the School of Business Leadership at The University of South Africa prior to emigrating to New Zealand in 1993.
Before forming Total Utilities, Richard was Managing Director of Renold NZ and Ajax Fasteners. But by 1999 he was ‘over’ the corporate world.
“Deep down I had always wanted to row my own boat,” Richard says of his decision to step out on his own. And so began Total Utilities.
Total Utilities started as a specialist energy procurement business where Richard negotiated competitive energy contracts for commercial clients. In 2001, Richard’s wife, Linda came on board followed by their son Jonathan in 2004. Total Utilities was truly a family business from the get-go.
“What I like doing is building something new,” Richard says. Thanks to his international sales, power generation equipment and gas industry experience, he brought a new approach to utility procurement for New Zealand businesses. This coincided with the deregulation of the electricity industry following the Max Bradford reforms.
Our very first client was Maxwell Dry Cleaning in October 1999. Richard looks back on our humble beginnings with fond memories. In 2019 we celebrated our 20th birthday.
Total Utilities grew slowly but surely in the early years. In 2007, Chris Hargreaves joined us, a school friend of Jonathan’s!
Now, Total Utilities has a team of thirteen, six of whom have been here for over a decade and nine for over five years. Richard is particularly proud of holding on to his talented staff and the strong team culture that he’s helped build. Over the years our skillset has expanded and continues to do so. We’re not only gas and electricity industry experts but renewable energy, cloud computing and carbon reduction specialists too. Richard says that although we’re not the biggest players in the market, like New Zealand as a whole, we consistently punch above our weight. As such, our large client base in the public and private sectors nationally, includes both major corporates and much smaller businesses.
The world has changed a lot since 1999, not least with the rapid growth of new technologies, including cloud computing. Richard is proud that Total Utilities has always embraced new technologies and ways of thinking about energy. “Cloud computing made a hell of a difference during Covid which meant that successive lockdowns haven’t impacted us that much in the overall scheme of things. The world has changed and the decision to go tech future-proofed us.”
But don’t worry, Richard isn’t about to retire. He will continue to work in a business development and sales role at Total Utilities, and he remains a director and shareholder. This means he can still do what he loves. You get business continuity, and we don’t lose out on his valuable expertise.
Stepping back will give Richard more time to focus on his hobbies which include genealogy, reading, and supporting his beloved Ipswich football team and the NZ Warriors. He is a keen environmentalist too, and regularly volunteers at nature reserves in the Far North to do his bit to protect our environment from harmful invasive species.
Richard is excited to give: “Jonathan elbow room to put his stamp on things.” Richard says Jonathan and the talented group in their late thirties are the engine room of Total Utilities and the time feels right to pass the decision-making to the next generation.
Jonathan is looking forward to taking on the Managing Director role from 1st April 2021 onwards. He is particularly excited about ensuring Total Utilities is technology-led and expanding our skillset and offerings.
What will this look like in practice? Well, you can take it from us that we won’t be sitting on our hands!
Total Utilities is committed to sustainability; taking advantage of the latest technology to drive energy efficiencies and better visibility of consumption; advocating for reliable, affordable energy pricing for businesses across sectors; while helping New Zealand reduce our collective carbon footprint and make the switch to renewable energy.
We are delighted to announce that as of February 2021 we are Toitū carbonzero certified. This means our commitment to taking positive action on climate change has been officially recognised.
We walk the sustainability talk by managing and reducing our greenhouse gas emissions, wherever we can, and neutralising our unavoidable emissions.
Enviro-Mark Solutions is now Toitū Envirocare. Toitū means “to sustain continually”. It asks us to work together continuously to care for our planet, people and communities. Toitū connects actions with outcomes and asks us to hold fast to the land, to our pride and to all living things.
Toitū carbonzero certifications “meet and exceed the requirements of ISO standards and ensure consistent and comprehensive reporting, benchmarking and management under international best practice”.
Our company emissions are quite small at 20.57 tCO2e, but we know we can do better.
That’s why we have set an ambitious, yet achievable, annual target of reducing our baseline emissions of 10% per year over the next three (financial) years.
Most of our emissions come from land transport – 80% is petrol and diesel use – and the remaining is domestic air travel and electricity (see graph below). The obvious next step is to be smarter around our travel choices, yet still deliver excellent service and competitive pricing.
Total Utilities will do the following to reduce our emissions.
Rather than buying carbon offsets, we have decided to support renewables-based projects that benefit at-risk communities. This means that along with contributing to renewable energy initiatives, we are also doing our bit to create jobs and improve the overall health and wellbeing of these communities.
We are thrilled that we can join a growing collective of hundreds of organisations who are leading the way to a low carbon future.
But it doesn’t stop there. At Total Utilities we have the skills and the experience to support more New Zealand businesses to measure, manage and reduce their carbon emissions and energy consumption. When you switch to renewable energy sources and manage your energy consumption, you not only reduce your transport and power bills, but you can limit your environmental impact too.
Our hope is that in being open about our sustainability targets and our progress, we will inspire you to make positive changes to the way you use and consume energy for a thriving Aotearoa.