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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Optimising energy sourcing and consumption in the oil and gas sector

Dmitry Danilovich
+ Author Affiliations
- Author Affiliations

KPMG Australia, Tower Two, 727 Collins Street, Melbourne 3000. Email: ddanilovich@kpmg.com.au

The APPEA Journal 58(2) 538-540 https://doi.org/10.1071/AJ17104
Accepted: 1 March 2018   Published: 28 May 2018

Abstract

Oil and gas companies are fairly large users of electricity, and the rising cost of electricity has become a major issue for the sector. Oil and gas producers often develop their own gas-fired generation plants and consume their own gas as generation fuel. An increasing price of gas in the domestic market has resulted in a corresponding increase in the opportunity cost of utilising gas for power generation.

Declining costs of renewable energy and battery storage open opportunities for oil and gas companies to reduce the consumption of their own gas and source electricity at a lower cost, as well as achieve their sustainability objectives. Gas-fired generation is expected to continue to play a key role in ensuring the reliability of electricity supply. However, the percentage of renewable energy in the supply mix can be increased significantly without compromising the reliability.

This paper will focus on the opportunities that exist for oil and gas companies to reduce their overall energy supply costs through a differentiated approach considering renewable energy sources and batteries, competitive tendering of energy supply requirements, and attracting capital from independent power producers and institutional investors. The paper will draw on lessons learnt from other energy intensive businesses in Australia.

Keywords: battery storage, cost savings, energy procurement, renewable energy, solar photovoltaic, solar PV, wind.

Dmitry Danilovich is the Head of Clean Energy for KPMG in Australia. He brings over 20 years of experience in the Australian energy sector, having advised developers of energy projects and investors on feasibility studies, project development and financing, acquisitions and divestments. His expertise in renewable energy covers wind, solar PV, hydro, geothermal and bioenergy projects. Dmitry has extensive experience in energy procurement and has advised electricity retailers and large energy users on the supply of electricity and large-scale generation certificates. These included oil and gas producers, mining companies, manufacturing facilities, port and rail, desalination plant, public transport, hospitals and office buildings. Dmitry is a Fellow of the Australian Institute of Energy.


References

Australian Financial Review (2017). Woodside Petroleum in Energy Breakthrough, Angela McDonald-Smith, 21 August 2017. Available at http://www.afr.com/technology/woodside-petroleum-in-battery-breakthrough-20170820-gy0hpg [verified 14 March 2018].

ARENA [Australian Renewable Energy Agency] (2017). Australian big business missing out on renewable energy opportunities: new report. ARENA, 18 July 2017. Available at https://arena.gov.au/news/australian-big-business-missing-renewable-energy-opportunities/ [verified 14 March 2018].