Australia’s power grid is once again making headlines. Tesla recently made a splash by announcing that it will build the world’s largest battery in South Australia for the Hornsdale Wind Farm. The storage facility, which is expected to have a completion date of December 1, 2017 will be big enough to power 30,000 homes. However, this isn’t the only reason Australia’s energy future has been in the news.

According to the Sydney Morning Herald, at the start of this month electricity prices spiked 15-20 percent in New South Wales, 16-20 percent in South Australia, 19 percent in the Australian Capital Territory, and 11 percent in Western Australia. ABC has also brought attention to the irregular spike citing research from WattClarity that shows average wholesale power prices for East Coast states in the National Energy Market —which spans Queensland, New South Wales, Victoria, South Australia and Tasmania— have risen between 150 percent and 240 percent over the past two years.

Australia has strongly embraced renewable energy sources, especially South Australia, and as a result the inconsistency of renewables has been in the hot seat as energy prices continue to climb. This is one of the main reasons Tesla’s record-setting battery project will be so important to the region. While Australia’s power grid has had its struggles, there are multiple factors that are contributing to the increased power prices: Market consolidation of energy suppliers, overall increases in demand within the region, and changes in the prices of natural gas. The correlation between natural gas prices and increases in wholesale electricity prices is strong. Natural gas is used as back-up generation and is called upon when renewable sources are not available. This is another reason why a project like the Tesla battery facility is so important as it provides an alternative option for the grid in times of need.

No matter the reason for continued rise in energy prices, businesses are being put in a tough spot, as this surely will impact operating costs. The uncertainty of energy prices underlines the importance of a solution such as BuildingIQ’s 5i Intelligent Energy Platform, which uses energy tariffs as a key variable for the advanced predictive models it generates. Hopefully, the Tesla battery will be able to help South Australia’s power grid avoid drawing on more expensive back-up sources of generation such as natural gas in the future. Through closed loop control, our 5i platform’s Predictive Energy Optimization service can help buildings avoid consumption for cooling operations during times when energy prices spike. This is done by using the building’s infrastructure and thermal properties as a sort of battery by precooling the facility and drifting through peak hours.

People perceive that they are comfortable as a consequence of a number of factors, but in terms of the air-conditioning system the key factor is temperature, which is actually a range rather than a fixed value. So instead of 22℃ (71.6℉) being the temperature requirement for comfort, the fact is that people are comfortable in a range between, say 21℃ and 23℃ (69.8℉ – 73.4℉). This is important because when a system can predict energy gain and loss in the physical environment (a thermal model), and then predict temperature, tariffs can be used as a governing parameter in determining where in that comfort range the building needs to be in order to save energy costs. BuildingIQ’s system actually makes micro-changes to temperature to maximize drift between the low and high range for comfort. Where closed loop control is not an option, the same analysis on comfort, energy cost, and thermal model can still guide the on-site facilities team to maximize drift, albeit to a lesser degree than closed-loop control.

As business energy consumption increasingly becomes an integral part of its operating strategy, it is imperative to identify solutions that help reign in consumption and save dollars on your bottom line; yet can be implemented with little infrastructure change.

Roy Arindam, VP of Sales at BuildingIQ, is responsible for direct and channels activities across South-East Asia, Australia and New Zealand. He has an extensive experience across energy optimization technologies, building automation systems, integrated extra low voltage systems (IELVS- OBSI), energy metering and reporting solutions, fire detection and fighting solutions, and security solutions.