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Navigating the energy transition: The role of independent advice for informed consumer choices

October 3, 2024

In today's dynamic energy landscape, consumers are inundated with a multitude of choices ranging from retail energy plans to solar installations, battery storage, electric vehicle (EV) charging solutions, and energy efficiency upgrades. This abundance of options has led to a common challenge: customers often feel overwhelmed and unsure about where to begin due to conflicting information that caters to vendors' specific business models.


The concept of independent advice emerges as a valuable tool in addressing this predicament. By offering impartial guidance, businesses can help their customers navigate the complex terrain of the energy transition, enabling them to make well-informed decisions that align with their unique needs and goals.


The overwhelming abundance of choices

The proliferation of energy-related products and services has created a situation where customers are frequently bombarded with sales pitches from various companies. These pitches, while compelling, often contribute to the confusion customers experience when trying to choose the right energy solutions. The conflicting information presented by different vendors, tailored to their specific business interests, further exacerbates the challenge of identifying the most suitable options.


The role of independent advice


Independent advice provides a crucial counterbalance to the overwhelming influx of information. It serves as a guiding light that allows customers to sift through the noise and focus on solutions that genuinely address their energy requirements. By receiving advice untainted by vendor biases, customers are empowered to make choices that are well-aligned with their needs, whether they involve adopting specific energy solutions or crafting comprehensive energy transition strategies.


Fostering trust and long-term relationships


Companies that prioritise independent advice establish themselves as trusted partners in their customers' energy transition journeys. Instead of pushing for immediate sales, they offer customers the space and time they need to evaluate their options thoroughly. This approach fosters a sense of trust and collaboration, as customers appreciate the commitment to their long-term success rather than a hurried transaction. This foundation of trust paves the way for enduring relationships based on transparency and mutual benefit.


Simplifying Complexity


The intricacies of various energy solutions can be daunting for customers who lack technical expertise in the field. Independent advisors play a pivotal role in bridging this knowledge gap by breaking down complex concepts into understandable terms. This not only aids customers in making informed decisions but also empowers them to actively participate in discussions about their energy objectives.


Tailored strategies for optimal outcomes


Recognising that each customer's energy journey is unique, independent advice enables businesses to provide tailored strategies that meet specific requirements. This personalised approach ensures customers derive maximum value from their chosen energy transition paths. By collaborating closely with customers, project developers can create customised solutions that align with individual goals, fostering a sense of ownership and investment in the process.



Concluding thoughts


In a landscape characterised by a multitude of energy options, and sometimes conflicting information, the role of independent advice is undeniably pivotal. By offering customers unbiased guidance, businesses can help them traverse the complexities of the energy transition with confidence and clarity. This approach not only aids in making informed choices but also lays the groundwork for enduring partnerships built on trust and shared objectives. As the energy transition continues to reshape the way we power our world, the value of independent advice in empowering consumers cannot be overstated.


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April 10, 2025
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April 10, 2025
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April 10, 2025
Here at VPP Partners we are always thinking about all things energy. The energy transition and all the moving parts are complex and looking for ways to demystify the challenges and help overcome them is one of our key drivers. Recently, VPP Partners's Energy Specialist Lachlan Ryan built a model to answer a question that he had been toying with for some time. The question was along the lines of “There must be a way to create a graph that would show the required spread between charge and discharge for a BESS in the wholesale electricity market for different capital costs to meet a desired financial metric”. It was believed that this would help to demonstrate a few different aspects relating to batteries in the NEM: Understanding Capex Requirements: Enabling the quick identification of the capex ranges required to get reasonable project returns based on expected charge and discharge prices. Highlighting Value Stacking: Highlighting that value stacking with other value streams is likely needed to meet the required financial returns. Value streams and contracting: Understanding your value streams and the potential importance of contracting your assets to firm up revenue. Trading capabilities: The requirement for competent trading capabilities to realise as much value as possible from the market. Key Assumptions The model itself had several assumptions that are highlighted as follow: Target internal rate of return (IRR): 12%, 15%, 18% Round trip efficiency (RTE): 85% (losses applied to charge cycle) Annual degradation rate: 3% Depth of discharge (DoD): 90% Cycles per day: 1.5 Project duration: 15 years Interest rate: 0% (self-funded model) The Challenge of Real-World Charging Prices A critical assumption in this model is that the battery charges at $0/MWh, which means the spread is equal to the discharge price. However, in real-world scenarios, the battery won't always charge at $0/MWh, and due to the round-trip efficiency (RTE), the actual required spread isn’t straightforward. For example: A 1MWh BESS charging at $0/MWh and discharging 0.85MWh (with 85% RTE) at $100/MWh results in a margin of $85/MWh. If the battery charges at $100/MWh and discharges at $200/MWh (maintaining a $100/MWh spread), the margin drops to $70/MWh. To achieve the same $85 margin, you would need to discharge at $217.6/MWh. This led to a redefined the problem: Instead of calculating the required spread, the result was required profit per MWh for all discharged energy. This model created the graph ‘Required Profit vs Cost of BESS’, where the x-axis is the capital cost of the battery system, and the y-axis is the required $/MWh profit required for all the discharged energy.
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