Origin Energy looking to cut costs

Origin Energy, one of the largest network companies currently operating in Australia, is looking to bring about a significant reduction in its borrowing costs (by about 50 basis points), as the company, which is the largest electricity retailer in Australia, looks to market the biggest syndicated loan for the country in this fiscal year. The 7.4 Billion AUD facility of the Origin Energy comes with a five year loan, which pays 170 basis points greater than the swap rate of the bank bill, as per the reports revealed by a couple of people who are quite familiar with the financial settlements of Origin Energy. This compares directly with the 220 basis point margin that the company paid on a similar kind of maturity loan. This was revealed by the data that was compiled by Bloomberg.

In the first quarter of this year, the economic growth of Australia had again slowed considerably, which meant that interest rates were cut down to record lows by the Reserve Bank Governor, Glenn Stevens. On an average basis, companies had to pay around 256 basis points this year in order to take out a loan. This was a stark drop from last year, in which year the averages stood at 321 basis points, as the data compiled by Bloomberg showed.

The company, which is based in Sydney, revealed an exchange statement this past week, showcasing the current scope and size of the business, by emphasizing on the financing terms of the company. When she was contacted by telecom today, Anneliis Allen, the official spokeswoman of Origin Energy refused to make any further comments on the details of the financing of this deal.

Origin Energy is rated BBB by Standard and Poor’s, while Moody’s Investor Services gives the company a Baa2. Those who spoke today revealed that the company was paying 155 basis points higher than what the benchmark was set on in the fourth year of their loan. As a result, the data revealed by Bloomberg showed that this was 45 basis points less than what the company paid back in October.

The incentive fee offered by Origin Energy is of around 50 to 65 basis points to lenders that are looking to pledge at least $250 million to the loan as early as September, while an extra fee has been set in place for those who are looking to commit in the early parts of the month. This was revealed by informers who preferred to keep their identity secret, since they wished to keep most of the details private. According to the data that was given by Bloomberg, this facility is of incomparable size in both Australia and New Zealand for this fiscal year. It is expected that at the very least, $2 billion one year piece of the sanctioned loan will be utilized in the capital markets (refinanced), as was reported by four separate individuals who wished to keep their details private. The situation of the Australian economy meanwhile, shows no signs of improvement.

Finding the best electricity company for your household needs

One of the largest problems that people in households in Australia is the fact that the prices of electricity are increasing rapidly, and people are unable to come up with an actual situation to this problem. Since 2008, the prices of electricity have been increasing continuously in every fiscal year in Australia, without any sign of stopping. These companies have extensive profit margins, and the average consumer is finding it very difficult to be able to afford a set amount of electricity. More importantly, these rising costs of electricity give no benefit to the consumer, since these companies just attribute the rising prices of electricity to the costs of network distribution, which is primarily referred to as ‘gold plating’ by many consumers, since most of the expenditure that is being done on network infrastructure is unneeded.

So, if your contract is about to expire and you are looking to reduce the figure that is quoted on your monthly household bill, what can you do? Well, one of the first things that you can do is to make sure that you choose the right electricity company to meet your household needs. There are a number of different electricity companies and suppliers that are providing their services within these areas, so if you are looking to get affordable electricity at your home, the most important thing is to make sure that you sign the right contract.

For instance, did you know that you could save a considerable chunk of money on your electricity bill if you cut down on your electricity consumption during the peak hours of the day? For instance, if you are living in a house with a lesser number of people, the best idea would be to shut down the appliances during the peak hours of the day, and this will help you in saving a considerable amount of money! Most people don’t know these things, and as a result, they end up paying extra. Similarly, if your consumption of electricity falls under a set limit, you can save even more money than you thought. All you need to do is to carefully compare the contracts that are on offer from different energy companies, and choosing one that meets your needs.

It would be extremely foolish on your part to choose whatever contract is offered by these companies; in most cases, the terms and conditions are flexible and could be altered to meet your needs and requirements. Therefore, rather than bending to their will, you should find contracts that are more suitable to your needs. There are a number of different energy comparison websites that you can visit online, which will help you in choosing the finest option in terms of prices. We all know that the prices of electricity are going out of control, and even though some reforms have been introduced, most people find it very difficult to be able to afford standard amounts of electricity on a usual basis.

Energy costs show no signs of stopping in Australia

The prices of electricity show no signs of stopping in Australia. Since 2008, the prices of electricity within Australia are increasing rapidly, and in every fiscal year, these prices of electricity are registering exponential growth. The people of Australia are under extensive duress because of the fact that they are unable to afford the prices of electricity. Because of the lack of investment within the Australian sector, the economy of Australia has also slowed down considerably in terms of economic growth, which has led to the Exchequer of Australia in cutting down the rate of interests to record lows. So, why are the costs of electricity increasing so rapidly within the country?

One of the primary reasons that has been quoted by these electricity companies is the fact that the rising costs of electricity are being attributed to the expenditure incurred due to network distribution. Even though very few companies have actually managed to increase their reach and scope, most of the electricity companies have just spent exorbitant amounts of money in order to ‘gold plate’ their existing networks and to generate extensive amounts of profits in the long run.

The real burden of the increase in the prices of electricity has fallen on the consumer, who is now being forced to pay approximately 400% percent more for the same amount of electricity that they were consuming five years before. In a few years, the prices of electricity have registered an increase on a semi- annual or quarterly basis as well. People pay considerably extra for the electricity consumed during the peak hours, making it very difficult for them to be able to afford the prices of electricity on a monthly basis.

As a result, many people have taken matters in to their own hands by installing solar power rooftop systems. At present, Australia has more than a million solar power rooftop systems installed and is becoming one of the most energy efficient companies in terms of solar power generation. However, the decision by the country to cut down the feed in tariff means that people won’t be able to get enough money for the amount of electricity that they are feeding in to the network grid.

Australia has also taken a number of steps in order to curtail the reliance on these coal and gas powered electricity companies, as a number of different wind farms have been established. Only recently, a deal was signed to create the largest wind farm within the Southern Hemisphere within Australia, which just goes on to show that the country is very serious about the renewable energy projects that are currently being initiated within the country. However, for the average consumer, the only option available is to cut down their usage of electricity, and to make sure that they carefully review their contracts in order to make sure that they are able to limit down their monthly household bills and afford electricity on a monthly basis.

Australian Energy Regulator to cut Ausnet’s Revenue

Starting from April, The Australian Energy Regulator is going to slash the amount of exorbitant revenues that are generated by SP Ausnet, one of the largest electricity retailing companies that has its headquarters back in Singapore. It has been revealed that the Australian Energy Regulator is going to cut down the revenue generated by SP AusNet by 7 percent on a yearly basis within Victoria, starting from April. The draft decision made by the regulator means that the revenue generated by SP AusNet will be capped at $1.53 billion over a span of three years (starting from the upcoming April), which means that a reduction of 4.4 percent has taken place on the overall revenue that was initially proposed by the popular electricity retailing/ networking providing company.

The chairman of the Australian Energy Regulator, Andrew Reeves has stated that this decision could prove to be extremely important for the large sacale consumers who are primarily employed in the industrial sector. The revenue generated by SP AusNet has now been capped, and since this is the only network service provider currently situated in Victoria, this means that SP AusNet will now have to charge less, especially via their transmission network component, that constitutes the largest part of the electricity bill for an average household.

Mr. Reeves stated that transmission charges are just around 5 percent of the residential bills, and that draft decisions wouldn’t really make a major impact upon the bills of most customers. But he did state that these transmission charges could prove to be a very popular term between industrialists, since transmission charges for industries are accountable for a larger portion of the bill, and as a result the reductions brought about because of the draft decisions would be more significant for industrial customers.

He was also at hand to reveal that because of this decision, the average annual transmission charges within Victoria will be slashed by around 7 percent over a time span of three years.  As a result, the proposed opex revealed by SP AusNet, which was around $607 million will be cut down to $543 million by the Australian Energy Regulator. In case the original figure was agreed upon, it would show that an average Victorian consumer would be paying double for works which did receive proper funding, but weren’t carried out at all. This was revealed by the last regulatory decision as was disclosed by AER. As a result, it is expected that companies would have to cut back on these revenues, since even though they were funded; nothing was realized on the work front. SP AusNet’s slashes in revenues mean that other companies might be asked to follow suit as well, since the prices of electricity have risen extremely rapidly within Australia. While other companies try to expand prices as much as they can, it is the job of the Australian Energy Regulator

Reducing Energy Bills for Schools

As the overall prices of electricity have increased in Australia, it has spared no household or commercial entity. Most important of all, schools are now beginning to suffer as a result too. The Principals Association of Victoria has just announced figures that state that electricity bills across the country for schools have now begun to take a steep rise. This was also stated in the Herald Sun in the past week, which stated that the Victorian Principals Association carried out a survey of over 150 government schools in order to determine the changes in the electricity bills, and the results were absolutely outrageous.

An increase of sixty percent was reported every month, which means that school principals now have to optimize their budgets massively in order to make sure that the school keeps running smoothly while all utility costs are also paid on time. However, since that is not possible, many of the school principals are struggling now to keep a hold of the everyday expenses incurred in schools. With resources being severely limited, funding is now being moved from other areas of the budget, such as teaching, computing as well as books. However, if this rate of increase continues over the passage of time, most school principals will have to stand up against it and come to a definitive solution regarding this problem.

The President of the Victoria Principals Association, Gabrielle Leigh stated that nine out of ten schools stated that their electricity bills had risen sharply, and it was becoming tremendously difficult for them to manage this problem. One of the schools, entitled Swan Hill Secondary, had to bear an increase of around 180 percent on their electricity bills.

Energy Watch stated that all schools need to make sure that lights are closed when the classrooms are not in use, and that the best practices of energy conservation are used to make sure that the bills are kept to a minimum. This might seem to be a very basic step that schools can take in order to reduce their overall bills, but it is likely that up to fifty percent of their electricity bills could be reduced by just making practicing simple energy conservation techniques.

The Alliance to Save Energy has also given its recommendations, stating that 68 degrees be used for heating purposes while 78 percent be used for cooling purposes. Most importantly, Energy Watch mentioned that schools need to make sure that they are able to secure the best possible deal from their energy retailers, which will help them in getting the most affordable package.

In areas where smart meters are used, schools can also set a maximum ceiling for the total amount of units that they can consume, and this practice will help them in making sure that costs are curtailed and the excessive amounts of electricity bills that schools have to pay every month are reduced slightly. Some schools are likely to opt for solar power systems if the scenario persists.

World’s First Smart Grid Created for Electric Car Charging

A trial that took place for the Victorian Department of Transport has come to the conclusion that the charging costs incurred by drivers of electric cars as well as their utilities could be slashed by halved if the network performance could be made a bit better and more optimized, primarily with the help of Charge IQ, an electric vehicle charger that was manufactured in Australia. DiUS Computing, which was participating in the Victorian Government Electric Vehicle Trial, gave a demand management demonstration project that was aimed at making use of the Smart Grid in Victoria. The project ran from June to December 2012. It was also the world’s first end to end use of the Smart Meter, one of Victoria’s most important technological advancements, primarily for the management of electricity demand.

The results however, of the project that concluded back in December were announced this week, and can currently be viewed at the DiUS website. Importantly, it should be known that Charge IQ was the only electric vehicle charger used throughout the trial. DiUS Computing spent the best part of three years in order to develop the charger, and it is the first ever electric vehicle charger that is certified by ZigBee and is also able to communicate with smart meters.

The Smart Grid integration feature that is included in Charge IQ integrates with the smart grid system that is present throughout Victoria, and allows companies to work closely with the consumers in order to manage the charging loads in a better manner. The best part of using Charge IQ is that it allows the companies and the consumers to work in tandem with each other in order to find the best solution to manage electricity demand and supply.

The results of the project revealed that up to a maximum of $250 could be saved every year without having to make any sacrificial changes, which is around half of the overall cost that electrically charged vehicle owners have to pay every year to keep their car’s engine running. More importantly, by merely improving communication with the Smart Grid and the introduction of a smart technology for charging purposes, electricity prices are going to remain significantly lower for all of the consumers in Australia.

The whole list of the results of the project can be found on their website, yet some of the interesting findings included the fact that by introducing this EV charger consumer access as well as their confidence and faith in the Smart Grid is likely to be highly improved. The project also made several recommendations, such as to bring about an improvement in the Smart Grid and called for more innovation, while it also suggested that the overall prices of electricity be reduced. This is likely to be one of the most important decisions for the upcoming year, aselectricity prices across the country are rapidly decreasing, while Victoriai s trying its best to make sure that the prices do not go over the top.

A $240 billion plan for the power grid in Australia

Whenever you turn on your computer or put the kettle on the kitchen to boil up, just try to make this fact sink in: more than 90 percent of the overall energy within Australia is generated via coal and gas. However, the landscape is changing and come the next thirty five years or so, it is very likely that the same amount of electricity will be generated by more than twenty different technologies and sources. For those who do not realize, that is a humongous change within the electricity generation industry.

If we analyze a few of the future scenarios that are available, it is likely that we are going to be generating half of the electricity from renewable sources of technology, and half from the conventional gas and coal powered furnaces. It is also likely that other new technologies might be introduced, common examples of which include carbon capture as well as storage technologies. This is likely to bring about a massive decrease in the overall emissions of carbon from within the atmosphere.

So, what effect does this have on the kettle boiling in your kitchen or the electricity consumption in your house? Well, the implications are likely to be huge in all aspects. So, what if you were handed a fund kitty of around $240 billion, and were then asked to remodel the whole Australian energy sector, removing its reliance on the gas and coal powered electricity generators and introducing the twenty or so new technologies that are likely to be used in the future? This is the real challenge that the energy sector of Australia really faces; an energy transformation phase. It might be important to note that such a transformation hasn’t taken place since the industrial revolution back in the 19th century.

One of the many factors that are resulting in the beginning of this transformational period is the use of photovoltaic cells as a primary source of electricity power generation. Many households within Australia are now getting tired of the excessive amounts of energy bills that they are required to pay, and as a result have taken it upon themselves to generate electricity. So what’s the result? Solar powered electricity systems.

More than a million households within Australia are now powered through these solar powered electricity systems. These systems have reduced by half their price since 2008. More importantly, the total number of wind farms available in Australia has more than doubled in the past ten years; which is just another clear indicator of the fact that renewable sources of energy are rapidly gaining pace. There are a number of decisions that the government has to make regarding the investment and policy that is to be followed by the energy sector, and it is also very important to make sure that the most cost effective, low carbon emitting technologies are used in order to provide household electricity. As a result, a whole host of different changes are expected throughout Australia.

The solar energy situation in Australia

One of the primary themes that took center stage in the Solar 2013 conference that was held in Melbourne, Australia recently was to try and stem a race to the bottom. The solar market throughout the globe as well as in Australia is going through a consolidation/ contraction phase, and hence, rapid expansion is taking place. However, this has resulted in massive drops in quality as more and more companies, primarily the newer, weaker companies that have entered the sector try to cater to the demand of the people and provide cheaper options. However, the big players in the market already know that you are only going to get what you are going to pay for, but their ideology is not something that you could expect an average consumer to understand. Since a large majority of the consumers aren’t interested in the long term benefits and fail to realize the importance of going for reliable PV systems, the weaker firms are more than satisfied to take the center stage and capitalize on their ignorance.

One of the men who works for the top solar panel producing company, Professor Stuart Wenham, who is also the Chief Technology Officer at Sun Tech as well as the Director of the University of New South Wales’ Photovoltaic Center of Excellence. He showed that with the reductions in the prices of silicon, the primary costs that are incurred in the creation of solar power panels is to assemble the solar cells in to a module that is encapsulated with a glass.

The production of silicon solar cells is a business that is majorly capital intensive, and very high levels of quality control have to be exercised in order to make sure that the production continues at a smooth pace. On the other hand, all types of firms can play a role in assembling the solar cells in to their glass modules.

Now, since the assembly of the module has taken the center stage and is the most important factor that determines the price of the solar panel itself, more and more companies are looking for shortcuts in order to cut corners and to come up with ideas that will reduce their selling price as well as maximize their profit ratios. As per what Professor Wenham stated, it isn’t the larger, Chinese based firms that are looking to cut corners by using such practices, but it is the firms at the bottom of the ring that are trying to capitalize on this. There is very little brand value that these smaller firms possess, so most of these are generally looking to exit the market anyway after gaining some good profits, and aren’t really interested in long term value and durability/ performance.

With over a million different homes in Australia now fitted with solar energy systems, and with more expansion expected within the next ten years, it is likely that some major funds are going to be introduced in to the solar energy sector.

Increase in electricity prices could ruin businesses

The business community of Queensland is trying to prepare itself mentally for yet another increase in the overall costs of electricity. It is expected that the prices of electricity are going to increase by a figure of 22.6 percent come May, a figure that is likely to make it very difficult for businesses to carry out day to day operations and work on the same level of efficiency that they used to before the price hikes took place. These sentiments have also been put forth by the Chamber of Commerce and Industry of Queensland, which has stated that it holds ‘grave conerns’ over the impact that these price hikes are going to have on the everyday business of the region.

The viability of a number of different businesses within Queensland is going to be threatened as a result of these prices. Most of the companies and larger businesses are already paying up to 300 percent more electricity bills, a price increase that took place in the best part of four years. We have already seen some top of the line businesses pull down the shutters on their operations as a result of the increasing price hikes, with businesses such as Xstrata, CTE’s Industrial and Protective Clothing, Geon, Heinz and Amcor, etc.

The sad part is that these closures do not even paint the full picture for people who wish to understand the impact that the price hikes are having on the business industry. The problem is, whenever a key business announces that it is closing its operations within a city, up to a hundred other businesses that are directly or indirectly linked to that key business also pull down their shutters once and for all.

Data received from ABS Official stated that around 60, 149 businesses were closed in Queensland in the year 2011- 2012, with the business population facing a net reduction of 2, 032 business entries. The business community is slowly becoming numb to the lack of commitment shown by the government towards the business industry, and in a statement put forth by the Chamber of Commerce and Industry, it has been stated that any suggestion that tries to justify the price hike as being reasonable is not even remotely connected with the true reality of doing business in this area.

The Chamber of Commerce and Industry in Queensland has stated that the primary issue that is going to arise is for businesses whose electricity costs are higher than their operating costs, such as storage and refrigeration based businesses. For such businesses, it is impossible to bring about a reduction in their use of electricity any further, and hence the only option available is closure.

The Chamber of Commerce has also stated that the increase in prices has had a significantly more damaging impact as compared to the residential sector. The Chamber has also given a set of important recommendations that need to be followed in order to reduce the impact of the price increases.

A $240 billion plan for the power grid in Australia

Whenever you turn on your computer or put the kettle on the kitchen to boil up, just try to make this
fact sink in: more than 90 percent of the overall energy within Australia is generated via coal and gas.
However, the landscape is changing and come the next thirty five years or so, it is very likely that the
same amount of electricity will be generated by more than twenty different technologies and sources.
For those who do not realize, that is a humongous change within the electricity generation industry.

If we analyze a few of the future scenarios that are available, it is likely that we are going to be
generating half of the electricity from renewable sources of technology, and half from the conventional
gas and coal powered furnaces. It is also likely that other new technologies might be introduced,
common examples of which include carbon capture as well as storage technologies. This is likely to bring
about a massive decrease in the overall emissions of carbon from within the atmosphere.

So, what effect does this have on the kettle boiling in your kitchen or the electricity consumption in your
house? Well, the implications are likely to be huge in all aspects. So, what if you were handed a fund
kitty of around $240 billion, and were then asked to remodel the whole Australian energy sector,
removing its reliance on the gas and coal powered electricity generators and introducing the twenty or
so new technologies that are likely to be used in the future? This is the real challenge that the energy
sector of Australia really faces; an energy transformation phase. It might be important to note that such
a transformation hasn’t taken place since the industrial revolution back in the 19 th century.

One of the many factors that are resulting in the beginning of this transformational period is the use of
photovoltaic cells as a primary source of electricity power generation. Many households within Australia
are now getting tired of the excessive amounts of energy bills that they are required to pay, and as a
result have taken it upon themselves to generate electricity. So what’s the result? Solar powered
electricity systems.

More than a million households within Australia are now powered through these solar powered
electricity systems. These systems have reduced by half their price since 2008. More importantly, the
total number of wind farms available in Australia has more than doubled in the past ten years; which is
just another clear indicator of the fact that renewable sources of energy are rapidly gaining pace. There
are a number of decisions that the government has to make regarding the investment and policy that is
to be followed by the energy sector, and it is also very important to make sure that the most cost
effective, low carbon emitting technologies are used in order to provide household electricity. As a
result, a whole host of different changes are expected throughout Australia.