THE CHALLENGE
A prominent cold storage business in Victoria needed to address rising energy costs while maintaining consistent temperature control for perishable goods. Any disruption to their refrigeration system could result in significant financial losses, making energy reliability critical.
The business had already invested in a 1 MW backup generator to safeguard against power outages. However, the generator was underutilised, serving only as an emergency resource with no additional return on investment. Seeking to reduce business electricity costs and enhance operational efficiency, the company explored options to optimise energy usage and generate revenue from existing assets.
Key Challenge
- Rising energy costs threatened profitability.
- The 1 MW backup generator was underutilised, offering no ROI.
- Reliability and consistent refrigeration were critical to avoid spoilage and financial loss.
THE SOLUTION – Virtual Power Plant
Through our energy brokers, the cold storage business was introduced to a Virtual Power Plant (VPP) programme. This innovative energy management system strategically optimises energy consumption by leveraging flexible thermal loads and integrating backup generation into the energy market.
Our team assessed the site’s infrastructure and energy usage to identify opportunities for cost savings and revenue generation through VPP participation. By aligning their generator with VPP operations, the company could reduce energy usage during peak demand and sell surplus power to the grid without compromising temperature control or product quality.
Steps Taken
- Feasibility Assessment: We evaluated the compatibility of the facility’s existing 1 MW generator with Virtual Power Plant operations and identified potential revenue streams.
- Integration with the VPP Programme: The generator was synchronised with the VPP platform, enabling participation in demand response and energy trading markets.
- Back-Cast Modelling: Using historical energy data, we projected potential revenue, demonstrating the value of VPP participation and justifying the investment.
Steps to Success
- Conducted a feasibility assessment for Virtual Power Plant (VPP) integration.
- Synced the existing generator with the VPP platform.
- Used back-cast modelling to forecast potential revenue streams.
THE RESULT
The integration of the Virtual Power Plant (VPP) programme delivered significant financial and operational benefits:
- The business generated approximately $32,899.05 annually from VPP activities at their existing site, net of fees.
- A second site was added, doubling expected annual revenue to $108,478.20.
- Additional opportunities identified through back-cast modelling revealed an extra $121,000+ annually, bringing total potential revenue to $229,478.20 per year, net of fees.
- Over a five-year period, VPP participation is projected to yield a return on investment (ROI) of $1.15 million.
Revenue Impact
- Initial annual revenue: $32,899.05 net of fees.
- Projected annual revenue with additional sites: $229,478.20, net of fees.
- Five-year ROI: $1.15 million.
Strategic Advantages
- Lower Business Electricity Costs: The Virtual Power Plant (VPP) programme allowed the facility to optimise energy usage during peak periods, significantly reducing operating expenses.
- Competitive Edge: By generating additional revenue, the business could offer more competitive pricing, securing larger refrigeration contracts.
- Maximised Asset Utilisation: The backup generator transitioned from an idle asset to a revenue-generating resource.
- Sustainability Goals: VPP participation reduced energy waste and aligned with corporate responsibility objectives, contributing to grid stability.
Strategic Benefits
- Reduced peak-period energy costs.
- Monetised underutilised assets like the backup generator.
- Strengthened sustainability initiatives, aligning with corporate goals.
Key Learnings & Recommendations
- Assess Existing Infrastructure: Many businesses already possess assets, such as backup generators, that can be leveraged for VPP integration.
- Partner with Energy Experts: Working with experienced energy brokers ensures a strategic and well-executed approach to VPP participation.
- Leverage Flexible Loads: Refrigeration systems offer unique opportunities to participate in demand response programmes, cutting costs and generating revenue.
Future Opportunities
The business plans to expand its Virtual Power Plant (VPP) participation by integrating additional sites and increasing generator capacity, unlocking further revenue streams and reinforcing its competitive position.
By partnering with the expereinced energy brokers at Power Maintenance and implementing a VPP strategy, this cold storage business transformed its energy management approach. They reduced business electricity costs, generated significant new revenue streams, and established a sustainable, future-ready energy strategy.
Commercial Energy Expert
Managing energy costs is crucial to maximising your business’s profitability and and boosting competitiveness. With the right knowledge and support, you can gain control and make informed decisions. The Power Maintenance team of energy brokers, specialise in guiding commercial businesses through the complexities of the energy market. Our tailored solutions and industry expertise ensure you’re always securing the most competitive rates.
