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DID YOU KNOW THAT SMART POWER OFFERS...
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Energy Management
Smart Power has a proven track record with its clients of delivering tangible cost savings through improved and innovative Energy Management Services, reduced energy needs and costs (hard savings).
Through Smart Power's online database, e-Smart, you will have easy access to consumption and cost data for all of their sites. At the click of a mouse this information is easily formatted into varies reports which can help you highlight sites for further investigation and energy savings. Dashboard reporting is also available through e-Smart.
Smart Power is able to provide most support services in house as we cover all aspects of energy management with the exception of spot price forecasts. This information we contract from a specialist in this area on an as-required basis on behalf of the client. Having such a broad knowledge base in house allows customers to access a huge pool of knowledge and experience without third parties having to be engaged at an extra cost.
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EVER WONDERED ABOUT....
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Rechargeable Batteries?
Specifically, have you ever wondered, like one of our readers, why the nominal voltage on a rechargeable battery is different from a single-use battery (1.5V for a single-use battery, and 1.2V for a rechargeable).
In a single-use battery (known as a 'primary' battery), the voltage starts at 1.5V and progressively discharges as the battery is used, finishing at around 0.9-1V. A battery charge measuring device works by measuring the voltage remaining on the battery. Since the voltage discharge profile is reasonably steady, it is possible to estimate how much life the battery has left. Over the life of the battery the average voltage is about 1.2V.
In a rechargeable battery, the voltage is determined by the combination of chemicals used in the battery. Nickel-Cadmium (NiCd) batteries have a nominal voltage of 1.2V. However the voltage stays pretty much steady over the whole life of the battery. Nickel-Metal-Hydride (NiMH) batteries are similar to NiCd, and have the same nominal voltage, but with improved performance and capacity. Because rechargeable batteries maintain a near-constant voltage for most of their life, a battery charge measuring device does not provide a useful measure of the remaining life of the battery.
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Greetings!
Welcome to this edition of "Get Smart", Smart Power's regular bulletin. Get Smart provides a round-up of energy news and views from New Zealand, Australia and around the world.
In "Company Voice" this month, director Shaun Hayward talks about electricity procurement strategies.
As always your feedback is most welcome. |
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NEW ZEALAND ENERGY HEADLINES
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Household power bills surge
Household power bills have risen by up to $316 this year, and lines companies and retailers are blaming each other for the increases.
Figures from the Ministry of Business, Innovation and Employment show New Zealand's two million power consumers faced an average 5.4 per cent increase in their bills in the year to last month.
Increases in the two previous years were 6.2 per cent and 4.3 per cent. Read more
$30m bioreactor a world first
A one-of-a-kind new water treatment facility near Taupo is using gas-gobbling bacteria and 378km of underground pipes to clean Waikato River water.
While it may make a fabulous water feature, Wairakei Power Station's new bioreactor is a serious piece of industrial plant, and a world first.
It uses sulphur-oxidising bacteria to reduce the levels of hydrogen sulphide in the power station's cooling water. Read more
SFO probes $46m Auckland power job
A Serious Fraud Office boss says investigations into Hawkins Construction's Hobson St substation job will take some time.
Simon McArley, general manager of financial markets and corporate fraud, said he could give no definite date for any progress or announcements and referred to a protracted probe.
"It's not a small investigation, obviously with a project of that size. It's going to take some resources and won't be resolved tomorrow," he said. Read more
Electricity Authority extends 'What's My Number' campaign to SMEs Small and medium size business owners are being encouraged to become more active consumers in the power market by taking advantage of a new self-guided brokering service. The What's My Number business tool, unveiled on Tuesday by the Electricity Authority, allows competing power companies to bid on the supply needs for SMEs through an online tendering process. Carl Hansen, chief executive of the Electricity Authority, said while many business owners were under the impression savings through switching power companies would be marginal, the marketplace was more competitive than they realised. Read more ETS changes make farce of policy, says commissioner Critics and supporters of Government plans to water down the emissions trading scheme began making their case to Parliament's finance and expenditure select committee this week. Parliamentary Commissioner for the Environment Jan Wright said the amendments to the Climate Change Response Act made a farce of New Zealand's response to climate change. "By making taxpayers subsidise the cost of pollution indefinitely, the amendments distort the market and limit the incentive to reduce emissions," she said. Read more |
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AUSTRALIAN ENERGY HEADLINES
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Ferguson swipes Gillard over electricity prices
Conservative states are not responsible for big hikes in electricity prices and do not need to be threatened in a quest for ''cheap'' headlines, Resources Minister Martin Ferguson has said, just months after Prime Minister Julia Gillard made such claims.
Mr Ferguson was rejecting a plan by Independent Rob Oakeshott for a federal takeover of electricity price regulation to stop states like NSW ''milking'' massive dividends from their electricity assets, but his remarks also contrast sharply with Ms Gillard's threat last month to use the ''big stick'' of federal regulation because the states were gouging consumers. Read more
Electricity price rises a 'big worry'
Rising electricity prices are of concern to a large majority of households, with more people worried about electricity than any other household expense, a survey by the consumer group Choice has found.
The nationwide survey of 1020 households, conducted in June, found 55 per cent of respondents were ''very'' concerned and another 30 per cent ''quite'' concerned about their electricity bills. Read more
Hartcher moves to open up NSW electricity market
More companies could enter the electricity market as a result of new terms of reference that the state government will submit to the pricing regulator within days.
The Minister for Energy, Chris Hartcher, said steps would be taken ''to make [the market] more open for small and medium sized businesses''.
NSW is yet to follow Victoria in fully deregulating the market, though a review by the Australian Energy Markets Commission into the level of competition in NSW has begun. This review is a precursor to removing all price controls. Read more
States to blame for electricity bills: AGL
The carbon tax is not totally to blame for higher electricity prices, gas and electricity supplier AGL Energy says as it calls for the deregulation of what consumers are charged.
AGL says the tax does contribute but the main driver of higher energy costs is the lack of state government spending on energy infrastructure, along with changed consumption patterns.
The company says electricity prices should be fully deregulated, so consumers could be charged according to the time of the day or night at which they use power. Read more
Call to overhaul electricity meter market There should be an overhaul of metering arrangements in the electricity market, as part of a broader series of measures aimed at stemming rising prices, according to the Australian Energy Market Commission. Buried in its 192-page Power of Choice report released recently are measures intended to open up the metering market, which will play a key part in opening the door to rolling back power prices. Read more |
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INTERNATIONAL ENERGY HEADLINES
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Popemobile - clean ride for a higher power
He's unlikely to be doing high-speed laps of the Vatican in it, but the Pope might be one step closer to God with his latest planet-saving wheels.
The Vatican has two new electric vehicles custom-made to meet the mobility needs of Benedict XVI, who is nicknamed the "green Pope". The eco-friendly mini Popemobiles were donated by French carmaker Renault, and delivered last week to the Pope's summer residence in the small Italian town of Castel Gandolfo.
One of the cars, for use by the Catholic leader at the summer home, is white with the papal coat of arms on its doors. It's modelled on Renault's Kangoo Maxi ZE and will see His Holiness travelling at a sensible pace on a 44kW electric motor, with lithium-ion battery pack. The papal Kangoo can travel up to 170km on one charge - ideal for the Pontifical Villas in Castel Gandolfo, which cover 55ha. Read more
Fukushima owner says it lacks cash to change
The head of the Japanese utility that owns the tsunami-hit Fukushima nuclear power plant says last year's meltdowns sapped money it might have used to switch to alternative energy, making it all the more important for the company to stick with nuclear.
Naomi Hirose, president of Tokyo Electric Power Co, said it is "quite troubling" that the Government, responding to public opinion, was moving toward eliminating nuclear power but Tepco would follow whatever energy policy Japan adopts. Read more
Mother's roof top protest after daughter cuts electricity
As rooftop protests go, it is hardly likely to rock the establishment, but then again all Catherine Beesley wants to do is attract the attention of her daughter who lives downstairs.
Mrs Beesley, 60, has taken to waving placards and protesting on a garage roof in a bizarre domestic argument which has seen the electricity supply to the part of the bungalow she shares with her daughter cut off. Read more
A New Role for Coal in German Energy Revolution
One of the biggest challenges of Germany's ambitious energy revolution is the fact that renewables such as wind and solar are subject to large fluctuations in output. Coal has long been considered their dirty alternative, but a new generation of power plants may herald a glowing future for the fossil fuel.
The cooling towers and smokestacks of a power plant tower over the houses in Niederaussem, a small town near Cologne in the Rhineland region of Germany. The power station could well serve as a symbol for the second wave of Germany's so-called energy revolution -- it burns coal, but not in the conventional way. The technology it uses is one that more and more conventional coal-fired power plants may come to implement in the next years, because it solves a key problem in the transition to alternative energy sources such as wind and solar power. Read more
Russia To Produce Electricity with Former Nukes Russia is planning to destroy plutonium used in thousands of soon to be decommissioned nuclear warheads by using it as fuel in a special new atomic power plant. The reactor is set to begin operating in one year, but time pressures and a vulnerable cooling system make the project a risky one. Russia's plan for disposing of its share of the plutonium involves a fast reactor, a variation on the fast breeder reactor design but without a breeding blanket. That alteration gives the power station the capability to destroy plutonium. Operating this sort of fast reactor with weapons-grade plutonium, though, is a risk no one have has ever taken yet. Read more |
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THE COMPANY VOICE
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Shaun Hayward has over 12 years experience in the New Zealand electricity industry, predominately in retailing and energy trading. Prior to joining Energy Select and subsequently merging with Smart Power, Shaun worked for Mercury Energy in various Senior Management roles and has extensive experience in commercial contract services. Shaun has also worked with the Electricity Commission and the Gas Industry Company to develop industry rules.
"This is my second article since joining Smart Power in October 2011 and I wanted to maintain the focus on procurement services.
Every energy consumer should be aware of the premium paid for electricity contracts, be they fixed price offers, financial contracts (offers linked to Spot) or simply wholesale/ spot cost itself.
The Electricity Commission will soon be releasing a document introducing many of the purchasing options available. One of the key messages of the booklet is to consider the premium for fixing prices compared to the volatility of not fixing the price. By calculating the cash flow implications of each procurement strategy consumers can make informed decisions about risk and reward. As an aside this is mandatory for NZ's largest energy users. There is a market code requirement to 'stress test' their procurement activity every quarter, i.e. to evaluate the ability of the organisation to survive medium and short term spot prices, and the impact of financial contracts on purchasing costs.
Many Smart Power clients elect to fix their energy cost by signing Fixed Price Variable Volume supply contracts, effectively nullifying the 'stress test' and passing all the volatility of electricity prices to the Retailer. Retailers accept this risk for a return, they calculate the return by estimating available generation (in particular hydrology) for the period contracted, evaluating the risk of generating at one place but selling at another (known in the industry as location factor risk), reviewing their own generation capability to cover the contract, before finally placing a margin on these estimates.
At the time of procurement every organisation is faced with the dilemma to fix or not to fix energy prices, and if they fix how long to sign for. To make informed decisions Managers need to understand the volatility of predicting future energy cost under the various scenarios. To do this they should compare the current contract to the historical spot price, and then make an informed decision about future spot prices based on the latest market information before considering new contract offers.
Consumers who are aware of changes in the market since their last procurement activity may make different decisions based on new information. For instance we have known since 2010 that NZ's electricity demand has been falling, and that demand is now at pre-2007 levels. But new speculation with Rio Tinto Smelter and Norske Skog reducing demand coupled with significant North Island geo-thermal generation developments such as Nga Awa Pura (140MW) and Te Huka (23MW) which came on line pre 2011, and with Ngatamariki (82MW) and Te Mihi (159MW) to be completed by 2013. At full production these geothermal stations increase NZ's generation by approximately 8%. The HVDC link and main Northern transmission, and Southern transmission systems have been strengthened. It's not all good news though, new generation is more expensive to install, carbon has added a new cost to the market, but on the whole the fundamentals are supply equals demand. Does this information make a 5% reduction in the next energy contract sound good or bad?
Comparing spot prices to existing contract rates should be completed monthly as part of an invoice monitoring and reporting regime so that the organisation can understand market timing, expected results to activities, and ultimately, the decision to fix or not and for how long.
Recently the Australian Stock Exchange NZ electricity futures market which has seen a 10% drop across most quarters for the next three years. Bear in mind a $5 price fall is a $10,000 shift in value per quarter. Futures, work in the future, if the price moves $5 for a quarter next year that's a $10,000 margin call today to settle the trade. Knowing falling demand, new generation, changes to big clients demand, understanding the impact to generation we can, in some cases react in advance, to spot trends.
The information in the booklet may encourage more consumers to consider some form of spot exposure, be it 100% spot, a percentage on spot, or financial contracts such as CfD's, cap or collar products and electricity futures contracts. Collectively these activities can be referred to as 'flex' or book building.
Smart Power can assist in many ways with procurement, advice, managing the activity, and book building. We are independent of all industry participants and have been advising clients since 1993 on procurement strategies. We are approved under the NZ Securities Markets Act, administered by the Financial Markets Authority, to review, to provide advice, or offer, electricity financial contracts, and I am a registered financial advisor. Smart Power is also approved suppliers of energy procurement, management and energy efficiency services to government organisations."
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Smart Power
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