A Future Energy Vision Consumer Expectation Research SME Business Findings Foresighting Forum 2020 Date: February 19th 2020
Research Objectives Explore small-medium businesses’ priorities, goals and day-to-day challenges, how energy 1 fits in and how attitudes and behaviours toward energy vary across different business Energy Consumers sizes and industries; Australia and Forethought set out to Explore what the concept of ‘better’ in energy explore businesses and 2 supply, consumption and behaviour looks the role that energy like for the future; and plays, what the future of energy should look like, Identify the expectations placed on the energy 3 industry and the role of different and what businesses stakeholders in driving a better energy future. want from the sector; what does better look like in their eyes?
Introduction to the Methodology Speaking with a In-depth interviews with widespread mix of businesses from Metro businesses and and Regional areas understanding the role of business size, industry and intensity of energy usage
Speaking to businesses across Australia: Qualitative Interviews Understanding Small-to-Medium Australian businesses State Industry Size A total of 28 interviews nationally. QLD 7 Agriculture 3 2-5 9 NSW 5 Construction 1 5-55 11 The in-depth interviews included conversations with decision-makers from SA 4 Manufacturing 5 56-199 8 businesses with a mix of: VIC 6 Mining 1 • Metro and regional Professional • Number of employees TAS 3 8 Services • Industry • Energy requirements / intensity* Intensity* ACT 3 Retail 2 • Impact of energy on finances Total 28 Transport 3 Low 7 Waste 1 Medium 10 Services Other 4 High 11 *Intensity was classified using a range of different variables, including cost of energy, industry and stated importance / impact of 4 4 energy on daily operations.
What we observed about Australian businesses - divider What we learned about Australian businesses
Overview of Findings Business felt stuck on how to change for the better. Energy was, for the most part, seen as a dollar value to reduce to maximise profitability. A better future was cheaper, more reliable, and renewable energy (primarily for cost savings, but also for CSR purposes).
One constant across all businesses was the fundamental necessity of energy to business operations. Energy was responsible for powering office spaces and running machines and equipment. In short, energy was seen as the lifeblood of Australian business.
While energy was fundamental to basic operations, it was not high on businesses’ priority list, and there was a perception that they couldn’t do much with energy in the business. Smaller businesses: • Preoccupied with overcoming challenges about survival and growth. • Short-term focus. Larger businesses: • Focused on optimising their operations to be more cost efficient. • Long-term focus.
update Intensity of energy requirements also impacted energy-related attitudes and behaviour. • High intensity industries such as Agriculture, Manufacturing and Mining businesses usually required high consumption machinery. • Low intensity industries like Professional Services and Retail SME typically utilised office spaces.
When looking at commonalities between business size and energy intensity, we found four groups with similar engagement and interactions with energy…
Businesses with similar classification of size and energy intensity typically engaged with energy in similar ways. Small with high energy Large with high energy intensity intensity • Required heavy machinery and • Required heavy machinery and infrastructure infrastructure running 24/7 • Operated beyond traditional • Required headquarters / office business hours spaces Energy Intensity • Energy made up a majority of Low - High expenses Small with low energy Large with low energy intensity intensity • Larger office spaces with • Very basic requirements: kitchens phones, computers, lights • Automated power saving • Energy management left to systems individuals and not often spoken about Business Size Small - Large
High Intensity Case Studies Small, high intensity Large, high intensity Agriculture Technology Mining Company Fabricated indoor growing systems for crops, and The business operated mines and had offices for had its own demonstration facility using the their headquarters in Australia. technology. A small team of ~10 employees managed the business, most subcontracted and • Energy was a substantial expense. worked remotely. • Energy was supplied through the grid 24/7 and required a stable load every hour of the day. • Energy determined cost of operation and • Decreasing cost was an important priority. therefore price for consumers. • Safety infrastructure in the mines legally required • Two diesel engines produced electricity 24/7 reliable and capacity of energy which renewable • Constant, unfailing energy supply was required technologies currently could not provide. 24/7 to run the demonstration facility. • Optimising energy efficiency was a core business challenge. • Solar had been tested and was incapable of producing enough electricity to run operations.
Low Intensity Case Studies Small, low intensity Large, low intensity Property Consultancy Environmental Not-for-Profit Acted as a property consultancy and buyers’ Managed and coordinated philanthropic and advocate. The business operated out of a home business funds. The business had offices nationally office and consisted of two employees. across Australia, operating from each of the capital cities and across some regional areas. • Energy was not a significant expense due to low consumption. • Company offices ran from 6 star energy efficient • Relied on energy for lights and computers which buildings. were necessary to operate. • Computers and lights were the only major • Energy was just seen as another bill. contribution to the energy bill. • No challenges or priorities with energy besides • Energy management was mostly automated in keeping costs down. offices. • No management strategies in place. • Given the values of the organisation, employees were internally motivated to use energy responsibly. • Currently on the grid, but had plans to move to renewable energy sources.
Energy technology and infrastructure for renewable energy When asked how 1 was felt to be too expensive businesses could change upfront . their behaviour to reach a more desired relationship Businesses felt that their premises 2 were restrictive to making with energy in the future, changes. Businesses Current renewable technologies were unable to meet the demands of businesses, who were using more felt stuck. 3 energy than could be reliably produced by solar panels on their premises.
How can you change your behaviour to reach a more desired relationship with energy in the future? Agriculture, Professional Services, High Intensity, Medium Intensity, Regional QLD Metro VIC
What does a better energy future look like for businesses? Cheaper, so we can be More reliable, so our Renewable, to capitalise more competitive operations aren’t disrupted on long-term benefits • Energy prices in Australia • Businesses in some states and • Renewable energy was desired limited competitiveness in an regional areas experienced and an expectation of the future. increasingly globalised market. blackouts – impacting operations. • Businesses were interested in • Smaller businesses felt that taking advantage of the energy was too expensive. • Reliability was desired by all potential long-term savings. businesses. • Renewable energy was seen to • High intensity businesses had a benefit their Corporate Social stronger desire, as disruption Responsibility. had a relatively greater impact on profitability. • Current renewable technology could not meet the demands of high intensity businesses.
Businesses had desires and ideas for what this better energy future could look like for them… Cheaper, so we can be More reliable, so our Renewable, to capitalise more competitive operations aren’t disrupted on long-term benefits • Lower prices and greater control • Replacing outdated energy • Continued investment and over energy companies infrastructure nation-wide. development of energy charging high prices. technology (including • Improved production and renewables) to cope with • Government support through capacity of energy supply. business demands. rebates and incentives for implementing renewable • Increased accessibility to • Tailored, energy solutions for technology. energy batteries and backup commercial / rented premises. sources. • Consulting / support on implementing cost-saving initiatives.
How do businesses think we get to better ?
Reaching this future was a goal that businesses thought Government had the power to help achieve. Businesses were comfortable with Government playing a leadership role if it was in line with their interests, such as enforcing lower energy costs and increasing rebates to make energy technology more accessible.
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