Rising energy costs and carbon emission ambitions are leading many Australian businesses to reassess how they manage energy.
This move towards more flexible and cost-effective energy models has enabled some companies to realise considerable energy efficiency improvements contributing towards both cost savings and emissions reductions.
Energy-as-a-service has emerged as a strategic option for energy-intensive businesses – including those in the commercial, industrial, mining and government sectors.
One way they are achieving this is through a solution called energy-as-a-service.
Energy-as-a-service has emerged as a strategic option for energy-intensive businesses – including those in the commercial, industrial, mining and government sectors – to reduce operating costs and potentially lower emissions without significant upfront capital.
Under this model, businesses pay a regular fee for guaranteed energy supply rather than owning assets such as solar panels, or heating and cooling systems.
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The service provider handles everything from installation to maintenance, allowing businesses to enhance energy reliability and efficiency, while remaining focused on their core operations.
Origin, in partnership with engineering and technology firm Climatech Zero, is aiming to help businesses make this transition.
“Energy-as-a-service is an innovative option now available to businesses,” says James Magill, executive general manager at Origin Zero.
“The benefit for them is the guarantee of energy savings and that the company providing the energy service is there throughout the journey, rather than just going to a site, fixing or fitting something and leaving.”
“Costs are reduced and then smoothed out for the business and the risk is on the provider of the energy-as-a-service, allowing businesses to focus on their core operations.”
Many of the financial advantages of this approach are the result of shifting spend from capital expenditure to operational expenditure, with businesses paying a fixed monthly or annual payment spread out over the length of the service.
This contrasts with the traditional model of upfront equipment purchases plus ongoing maintenance costs.
Instead of buying and maintaining compressed air systems, for example, a manufacturer could pay a fixed fee for guaranteed compressed air volume, with the service provider handling all equipment and maintenance.
“We’re accountable for delivering results and the customer only pays for the performance they receive, which removes the risk for the customer,” Magill says.
Visy – an industry-leading, Australian-owned packaging and recycling company – has worked in partnership with Climatech Zero since 2019 on a range of energy initiatives, which has delivered 13 projects across 11 sites.
Sustainability is central to Visy’s operations, with this partnership helping Visy meet its energy, emissions, production and financial goals.
Discussions around the energy-as-a-service model began in 2023, initially focused on compressed air systems, with Visy rolling out its first two sites in 2024.
“After partnering with Climatech Zero for its energy-as-a-service model for our compressed air assets, we’ve seen fantastic energy efficiency improvements of more than 25 per cent in the power required to deliver our compressed air needs,” says Ryan Santowski, Visy’s group general manager – energy, waste and water.
“Our reliability has improved, allowing us to focus more on what we do best, Australian manufacturing. We’ve seen the energy-as-a-service model provide high asset reliability, combined with high energy improvements.”
Climatech Zero, in which Origin has a 20 per cent equity stake, provides tailored engineering solutions for industrial customers that complement Origin’s capabilities in grid-scale and on-site energy solutions.
James Magill, executive general manager at Origin Zero and Climatech Zero co-founder and managing director, Peter O’Connell.
The partnership will help the companies deliver end-to-end energy and decarbonisation strategies for businesses.
“Origin brings deep expertise in both behind-the-meter and in front-of-the-meter services, including solar, demand response and market integration,” says Climatech Zero co-founder and managing director, Peter O’Connell.
“We focus on optimising the mechanical systems and controls that drive industrial energy use,” says Climatech Zero co-founder and managing director.”
“There’s a big energy efficiency opportunity for Australia and we’re excited to be part of this transition.”
