Smart energy technology helps Olam Orchards counter soaring electricity prices
Case study overview
Global food grower and producer, ofi, is powering its Australian operations, Olam Orchards, with an innovative energy solution from Flow Power.
With orchards across VIC and NSW, plus sophisticated processing facilities, Olam Orchards required an efficient solution to effectively manage the rising electricity costs affecting Australian businesses in 2017.
Flow Power’s energy solution
Olam Orchards previously operated under a fixed-price electricity contract. While this approach provided consistent pricing, it didn’t allow the business to capitalise on the low-cost renewable energy that fills the grid during daytime hours – and this can offer significant cost benefits for large electricity users.
After moving to a flexible pricing structure with wholesale market exposure, Olam Orchards began to schedule energy intensive operations, such as running river pumps for irrigation, to within these low-cost periods on the grid and avoided using energy where possible during price peaks.
In 2018, Olam Orchards signed a Power Purchase Agreement (PPA) with Flow Power. By locking in a fixed price for virtual generation under the PPA, Olam aimed to counter rising 2017 Victorian wholesale prices, which spiked by around 85%.
Matching usage to renewable generation
Committing to a 10-year agreement helped secure price certainty and allowed Olam Orchards to match its usage to generational output from Ararat Wind Farm and Kiamal Solar Farm. The graph above shows Olam Orchards’ energy use and how it’s matched to renewable generation through the PPA on an annualised basis.
Powering down to save with smart technology
Flow Power unlocked wholesale market pricing for Olam Orchards and created a demand response strategy, leveraging flexible operations to respond to pricing signals from the market.
The graph on the left shows Olam Orchards’ response to an extreme price event in Victoria in early 2024. Extreme weather and widespread power outages caused the price to spike to around $16,000/KWh.
By powering down during this event, Olam Orchards avoided $510,000 of additional energy costs. While this is an extreme example, having the flexibility to reduce or avoid usage during peak periods daily can have a similar cumulative effect on long-term energy costs.
‘Partnering with Flow Power allows us to pursue sustainability at scale.’
Ben Fessey – General Manager Trading, Olam Orchards
Olam Orchards’ commitment to sustainability
In 2020, ofi launched the “More Crop per Drop” trial, to better understand the behavior of almond trees under different conditions. Using innovative technologies to track everything from tree growth to soil health helps ofi to understand and reduce its water footprint, both globally and across its Australian operations, Olam Orchards.
Energy procurement is a key part of Olam Orchards’ commitment to climate action, with a goal to offset 75% of total energy demand by purchasing renewable energy. By 2030, it aims to power 50% of mobile farm equipment with renewable energy.
ofi relies on over 2.5 billion pollinators in Australia and the US to make sure its almond orchards produce year after year. Balancing pest control, while fostering bee-friendly communities is a challenge. It balances this risk through the controlled or non-use of certain chemicals to deter unwanted pests, while maintaining a limited impact on
biodiversity, and championing bee friendly farming techniques.
Farming communities are at the heart of ofi operations, which is why it’s committed to making them prosperous places where people want to live and work. This is achieved by creating safe and decent jobs for people, providing internships and school programs to equip students with the skills and knowledge to start careers in agriculture, and supporting local charities and causes.
The future of energy for Olam Orchards
The PPA will come to an end in 2027, but discussion with Flow Power is already underway about what the future of energy could look like for the business. The energy market is rapidly evolving, and Olam Orchards understands the importance of being agile when it comes to its business electricity strategy.
Guided by the trends of the market, there is potential to replicate the generational output of the existing PPA by installing behind-the-meter microgrids onsite for the orchards. This involves several solar and battery arrays to help reduce the remaining grid exposure and would assist in a smooth transition to an electrified vehicle fleet.
Working towards a predominantly off-grid strategy would provide additional price certainty and energy independence, while working towards Olam Orchards’ 2030 sustainability goals.
Flow Power’s energy specialists can help your business stay ahead of the curve.
Contact us today to discuss your options.