It is an undisputed fact that a large part of water utilities’ operational expenditure is energy, and with the substantial rise in energy prices over the past 18 months, many of them are now seeking to actively manage energy to reduce costs.
One such example is wholesale energy retailer Flow Power, which has helped Melbourne’s largest water retailer reduce operational expenditure through a proactive approach to power management.
Yarra Valley Water (YVW) Greenhouse Gas and Energy Specialist Simon Prunster said: “We provide an essential service that is dependent on consuming electricity. Put simply, without energy we could not function in our current mode of operation and this would have a major impact on the health and wellbeing of Melbourne.”
“We require a reliable supply of electricity to ensure we meet our Statement of Obligations in the provision of water and sanitation services on behalf of the Victorian Government.
“The risk of blackouts causing unacceptable sewage spills has led the business to make capital investments in backup diesel generators that are rarely used.”
Flow Power, aside from supplying energy to YVW sites, helps the utility to manage energy cost risks, which is not a service offered by many energy retailers, according to Prunster.
“As part of the retail supply contract at these sites, Flow Power actively assists YVW with risk management through either remotely activating back-up generation or advising plant operators to shed load to avoid high pool prices,” he said.
“This type of active approach to electricity management gives YVW greater exposure to the wholesale price, and we do this with a view to reduce electricity costs.
“Managed exposure to pool pricing is not a service offered by many retailers. At the time of the VIC Water approach to market, on behalf of various water retailers, Flow Power was uniquely placed to meet our specific requirements. This is why we chose them and why we have since recontracted with them.”
Prunster said Flow Power has helped YVW to change the way it uses power, as well as minimise operational expenditure by managing energy-supply risks.
“At some of our larger sites, we have gone from being passive consumers to having operators actively manage demand response events to reduce operational expenditure. In executing this strategy, there is more work involved for the business and managing demand response requires coordination throughout the business,” he said.
“Demand response is not an easy thing to get right straight away and we are continually learning, but the more we participate the better we get.
“We are now at a level of demand response maturity that the business is used to making decisions based on cost versus benefit analysis and operators now make informed decisions on whether or not to participate in a demand response event dependant on the specific circumstances at each site.”
With Flow Power’s assistance, Prunster said YVW has been able to avoid high pool price events through the implementation of a demand response program.
“Don’t be afraid of pool pricing if you can put in place strategies to manage risk, such as an effective demand response program,” he said.
“By taking on exposure to pool pricing, all you are doing is paying the actual price of electricity, and if you execute a demand response strategy, then you can avoid paying the high prices that are inherently factored into the traditional retail price.”
Flow Power Managing Director Matthew van der Linden said there is “a lot of room for flexibility” within the energy retail space, and all it takes is a “little extra effort” to create a water-energy partnership that works.
“Aside from being YVW’s electricity retailer, we also work closely with its metering. We are installing our kWatch Intelligent Controllers on YVW sites to match its generation and energy use to the signals of the market,” van der Linden said.
“Many water boards had been offered fixed rate contracts for their electricity supply. Following conversations with the Flow Power team, YVW were able to unpack the options for a more flexible arrangement.”
Flow Power is a corporate member of the Australian Water Association and sponsor of the upcoming Ozwater’18 Conference. As part of Ozwater'18, Flow Power is offering two water and energy managers from any NSW local council the chance to attend the conference, with flights and accommodation included. Simply fill out this 6-question survey for your chance to win.
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