The Energy Triangle: How Understanding it Can Help Australian Organisations Achieve a Sustainable Future

The Energy Triangle is a concept that describes the interrelated nature of energy supply, energy demand, and energy security. The energy triangle resembles the concept known as ‘Energy Trilemma’ which covers energy sustainability, energy affordability and energy security – which are basically three major issues or challenges (i.e. trilemma) connected to the Energy Triangle.  It represents the balance that needs to be struck between these three elements in order to ensure a sustainable energy system.

In the context of Australia’s energy landscape, the Energy Triangle (and by extension the ‘Trilemma) is particularly relevant as the country continues to grapple with the challenges of transitioning to cleaner energy sources, meeting growing energy demand, and ensuring affordable and reliable energy supply.

1) Energy Supply

The first component of the Energy Triangle is energy supply. Australia has a diverse range of energy sources, including coal, natural gas, renewable energy (wind, solar, etc), and hydroelectric power. However, in 2021, more than 91% of Australia’s energy supply was generated by Coal (31.5%), Natural Gas (27.7%) and Oil (32.2%)¹. This over-reliance on fossil fuels has led to concerns about greenhouse gas emissions and the need for Australia to transition to cleaner energy sources.

Total energy supply (TES) by source – Australia 1990 – 2021

2) Energy Demand

The second component of the Energy Triangle is energy demand. As Australia’s population and economy continue to grow, energy production and is also increasing.  Energy production has increased more than 187% between 1990 and 2020, while population grew by only 50%.¹. The rising energy demand puts pressure on the energy system to provide reliable and affordable energy to all Australians.

Total final consumption (TFC) by source - Australia
Total final consumption (TFC) by source – 1990 -2020 iea.org

3) Energy Security

The third component of the Energy Triangle is energy security. Australia is a large and sparsely populated country, making it challenging to ensure energy security for all citizens. Energy security refers to the ability of the energy system to withstand disruptions and provide a reliable and affordable energy supply. This includes having the infrastructure in place to withstand natural disasters and other disruptions.

Why the Energy Triangle matters for companies and organisations?

Companies operating in Australia’s energy market should be aware of each component of the Energy Triangle and take focused action on addressing the costs and risks associated with each angle. How and what type of energy they procure and/or produce (energy supply), how much energy they consume (energy demand) and the accesibility, reliability and affordability of energy being procured/produced (energy security) to mitigate risk of disruptions to operations and business continuity.

The need to reduce greenhouse gas emissions and transition to cleaner energy sources will likely lead to changes in the energy market, and companies that fail to adapt may find themselves at a competitive disadvantage. Additionally, concerns about energy affordability and reliability may lead to increased regulations and higher costs for companies.

The Role ESG plays in addressing the Energy Triangle

Environmental, Social, and Governance (ESG) considerations also play a critical role in the Energy Triangle. It is important for companies to be transparent and responsible in the way they manage their energy resources.

This includes:

  • Reducing greenhouse gas emissions,
  • Investing in renewable energy, and
  • Minimising the environmental impact of business operations.

Social considerations may include providing key stakeholders with access to clean and affordable energy resources (e.g. on premise solar powered EV charging stations). Governance considerations include transparency, accountability, and responsible management of energy and waste resources.

To address the issues concering the energy triangle and transition towards a more sustainable future, companies can take the following actions:

1) Reduce Energy Demand:

  • Implement energy efficiency upgrades / retrofits to reduce baseline energy consumption and costs.
  • Implement energy monitoring (submetering) integrated with building management and control systems
  • Leverage Analytics and AI to identify inefficiencies & opportunities to reduce energy consumption, streamline maintenance scheduling and optimise asset performance
  • Reduce kVA Demand with Power Quality enhancements (i.e. Power Factor Correction, Active Harmonic Filters etc)

2) Greenify Energy Supply:

  • Invest in renewable energy and clean technology
  • Eliminate need for Gas by going all electric (e.g. replace gas-fired boilers with eletric powered heat pumps
  • Procure energy from carbon neutral or ‘green’ providers that supply electricity generated from renewable sources

3) Secure Energy Supply & Transition to Energy Independence:

  • Invest in renewable generation capacity and battery storage, in addition to uninterupted power supply (UPS) units, to reduce reliance on carbon intensive electricity grid
  • As above, invest in Power Quality improvements to reduce risk of preventable power outages resulting from high/low voltage levels, unbalanced phase currents etc.

In conclusion, the Energy Triangle represents the balance that needs to be struck between energy supply, energy demand, and energy security in order to ensure a sustainable energy system. Companies operating in Australia’s energy market must be aware of the Energy Triangle and take actions to ensure they are well-positioned to adapt to the changing energy landscape, taking into consideration the importance of ESG.

An important step in becoming a sustainable and environmentally responsible organisation is to partner with a dedicated team of experts that can provide sustainable pathways to achieving ESG objectives with a focus on maximising energy savings and return on investment.

To learn more about how 3E Group can partner with your organisation, connect here or call 1300 557 764. 

¹International Energy Association https://www.iea.org/countries/australia
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