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Peak Services Update on Impending Changes to Ergon Energy Tariffs

As we all know our ever-increasing consumption of energy and the rising costs of the market means we need to be on our game more than ever. The Energy team at Peak Services is focused on providing much needed energy services to Queensland local government to find ways to reduce these overall costs and doing our bit to help councils lower the impact to the environment.

Part of our role as leaders in the energy business is to ensure the sector is informed and updated on any impending changes that may affect Queensland councils and ultimately Queensland communities.

Through our ongoing discussions with Ergon Energy, it has come to our attention that as of 1 July 2020, the demand charge for large sites will be billed on kVA and not kW.  Consequently, council may be penalised for lower Power Factor resulting in a higher cost.

What does this mean in layman's terms?

All sites with a total annual electricity consumption over 100MWh are classified as large sites. The electricity bills of all large business tariffs include a demand charge. There are exceptions for tariffs 20L, 22L and 37, however these tariffs are currently identified to be made obsolete in 2021 and therefore not applicable in this instance.

The power demanded by the site and supplied from the network is known as “Apparent Power” (measured in kVA) whilst the actual power used to run the facility is known as “Real Power” (measured in kW). Power Factor is a ratio (between 0 and 1) of real power (kW) to the apparent power (kVA). It is a way of measuring efficient power usage. The closer the power factor is to 1, the more efficiently the site is consuming electricity.

Currently, the demand charge for large business sites is billed on “Real Power” (kW). However, with this changing to be billed on “Apparent Power” (kVA), there may be increased cost implications impacting councils operating budgets.

So how can we help?

In order to prepare against higher electricity costs due to these upcoming changes, our energy team can assist councils to investigate the Power Factor at each of council’s large sites and specify the Power Factor Correction System at sites identified with poor power factor to mitigate against these impending changes.

Western Downs Regional Council recently engaged Peak Services to investigate the impact of the upcoming kVA demand charging at its 23 large sites. Peak conducted a feasibility assessment for installation of a power factor correction devices at each of the four sites identified with poor Power Factor. The work comprised a data collection phase followed by a Power Factor Correction concept design phase.

The study indicated the installation of power factor correction systems would provide council with a total annual saving of approximately $23,000 across the four sites. All four systems were estimated to payback within two years of operation.

For further information and to understand how the team at Peak can assist your council to be prepared for these impending changes, contact Simon Martin on smartin@wearepeak.com.au or 0448 102 122.