This report presents the benefits, challenges and opportunities for the acceleration of Energy-as-a-Service in Australia.
Energy as a Service (EaaS) is an emerging businessmodel that shifts the incentive of energy services fromvolume to optimisation.
EaaS business models typically display one or more of the following characteristics:
- The customer receives a guaranteed outcome. A customer will pay a fee for a particular outcome or ‘energy service’. This contrasts with traditional energy services where a customer pays for a unit of energy, such as a kWh. Examples of services include; heating, lighting, vehicle charging, and mobility.
- The offering shifts CAPEX costs to OPEX costs. EaaS removes the up-front cost of energy assets, such as solar and batteries, for the customer. Suppliers finance up-front costs, recovering these through an ongoing, predictable, fee.
- The offering, to some extent, shifts demand management fromcustomer to supplier. A supplier takes on the responsibilities and risks of energy demand. In the lesser extent, this is done by optimising DER import versus export. More complex models also include demand optimisation of equipment (e.g. heat pumps, pool pumps, HVAC).
All these characteristics incentivise suppliers to optimise energy production and use. This breaks the traditional incentive to increase the volume of energy production and use. The optimisation of energy usage will organically promote increased demand flexibility and DER.