A new tool designed to help SMEs reduce their energy costs has been formally launched, with one business suggesting that as a result of using it, “we are predicted to save about $10,000 per year”.
At a media launch event at Cicada Innovations in Sydney on Monday (26 August), the Business Energy Advice Program (beap) was publicly unveiled as a joint initiative between the federal government and Australian Business — a division of the NSW Business Chamber — and its industry development partners.
“I think this is a great example of business and government working together in the way that should, around innovation,” federal Minister for Energy Angus Taylor (pictured) said at the launch.
Mr Taylor said there have been some “pretty dodgy discount practices” by Australia’s energy retailers, including hefty late payment charges, and that the complexity of price setting was something “time-poor” business owners struggle to navigate.
As such, the minister said that this initiative was developed along the notion of “when things are simple and can be done in a timely way, small businesses adapt and adopt”, allowing them to take better control of their energy costs by gaining greater clarity on the energy consumption and costs of similar businesses within a similar location.
What is beap?
The Business Energy Advice Program (beap as it is commonly referred to) is an online tool that allows small businesses to compare their energy consumption and costs with similar local businesses.
“[It] was designed to help small businesses solve this problem, giving them the resources and the expert advice they need to be able to get the best value out of their energy plan, and to navigate what is a difficult market with confidence,” Mr Taylor said.
“It essentially has two elements. The first is the advisory services, led by the NSW Business Chamber: that’s a one-to-one personalised energy advice service provided by the Chamber and its partners. These are free and independent energy consultations.”
According to the minister, these consultations will provide tailored advice on a range of matters, including how to reduce energy consumption and relevant energy grants for becoming more energy-efficient.
“The second part of the program is the Small Business Energy Check benchmarking tool,” Mr Taylor explained.
“It will help small businesses to get a quick sense check of their energy spend and a benchmark against what it should be.
“When you can see that your neighbour down the road in a similar business — a dry cleaner or a cafe or a farmer — is doing better than you on their energy, whether it’s their cost or the usage, all of a sudden you start asking yourself questions.”
How does it work?
Andrew Charlton from AlphaBeta, one of the development partners behind the service, said that the benchmarking tool “requires users to undertake three simple steps”.
- Declaring whether the user is a small business or an adviser to small businesses
- Entering some basic business details, including the industry and sub-industry in which it operates, postcode, revenue size and number of employees
- The current energy spend and type(s) of energy used
According to Mr Charlton, this then delivers a comparison “in a matter of minutes” with how the business compares with similar enterprises nearby.
He said the tool then provides advice on how these savings could be reduced, and links through to other services where more detailed “free, independent advice” can be sourced.
The data, while anonymous, will also be made available to regulators and industry, to provide transparency and a better understanding of small business energy consumption patterns.
Who is eligible to use it?
The tailored advisory service is free for Australian businesses with between six and 20 employees, and can be delivered either by phone or face-to-face.
Meanwhile, as the beap website states, all businesses are able to access the information for free through the platform.
Why is it needed?
Speaking at the launch event, both Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell and CEO of the NSW Business Chamber Stephen Cartwright explained that energy costs are a major constraint on Australian small businesses.
“For small business, it’s head down, bum up... you don’t think about energy costs until the bill comes in, and then you just wonder what you’re going to do,” Ms Carnell said.
She said that her office has been working with a sizeable regional supermarket whose energy bill soared by $100,000 in a single year, just one example of the bill shock facing many Australian SMEs.
Similarly, Mr Cartwright said that “rising energy costs are one of the very top concerns for business”, driven in large part by a “dysfunctional” energy retail system.
He said that research by the Chamber found that 65 per cent of SMEs believe they are already on the best energy deal and are energy-efficient, but still find their costs remain excessively high.
These costs, Mr Cartwright said, are not just reducing profitability but are having a direct constraint on business growth and are influencing factors such as expansion and employee recruitment.
What are the potential savings?
AlphaBeta’s Mr Charlton demonstrated the cost-comparison tool using the example of an unnamed cafe in the NSW city of Wollongong which was found to be spending $3,970 more per year than the average on its electricity, and that it sat at the higher end of what similar businesses spend.
This, he explained, demonstrates substantial room for improvement to reduce both energy consumption rates and the amount of money being spent on that energy.
Meanwhile, several businesses to have already trialled the beap service ahead of its public launch revealed they have found substantial cost savings.
Agricultural co-operative Yenda Producers noted that many members have “saved quite a lot of money” by being able to take better control of their energy usage and negotiate better rates from suppliers.
Meanwhile, Killara Golf Club, on Sydney’s North Shore, outlined its extensive energy needs, such as airconditioning the club house, refrigeration of foods and beverages as well as charging of the on-site golf carts.
“We are predicted to save about $10,000 per year,” the club said, having identified and implemented energy-saving efficiencies, money which will be reinvested back into the club through new member equipment and additional staff training.
The service can be accessed through the dedicated Business Energy Advice website.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.