Energy Cost or Opportunity?

Most of us have seen the data at some point showing that the economic success of countries correlates strongly with energy abundance and cost. Cheap, reliable energy does not guarantee prosperity, but it is hard to find a prosperous economy without it. There is nothing different at the business level. If you have cheaper energy than the business across the road, you have an advantage. That works locally and it works globally. Energy is not the only factor, but in a lot of industries it is a bigger factor than people give it credit for.

In Australia right now, that gap is becoming very real. We are dealing with an energy crisis that is hitting the P&L of most businesses, compounding supply chain problems, and putting pressure on every household in the country. And this is arriving just before what looks like a long and sustained rise in global demand driven by the convergence of AI and robotics.

So why do most businesses still treat energy as just a cost item and not an opportunity?

We put solar on our head office about fifteen years ago. It was not purely driven by wanting to do the right thing for the environment. It was a capital allocation decision. The payback was around five years. Not the best return we could get on capital, but good enough to make the decision easy. So we made it.

What I did not expect was what that first investment would start. Once the panels were in and the payback was tracking, the obvious question became — what can I do with that next? If I am generating power at my facility, I can charge vehicles there. So we started transitioning the Perth fleet, and today fifty percent of our Perth-based vehicles are electric or hybrid.

That had us ask the next question. Why not try this on site? So we started deploying solar and battery systems to our project sites, powering offices, lunchrooms and ablutions. The extension after that was obvious — we are now deploying EVs on site as well.

Each step funded the confidence and the logic for the next one. That is the part people miss when they look at solar as a standalone decision. It is not a standalone decision. It is the first step in a sequence that compounds.

Now, we work in capitally intense and energy intense industries. We are reliant on diesel, and rightly so for today. I am certainly not going to say everyone should switch everything to electric tomorrow. For starters, it is impossible. And secondly, it is not the right move. One energy source is not going to take over the whole market. There is going to have to be growth and, if we are smart, acceptance of both old and new technologies to make sure we can ride the wave that is coming.

And the wave is coming. Going into the next phase of what looks to be driven by AI and robotics, we will not get anywhere without a growing supply of economically efficient energy. This applies globally, all the way down to the business level — and I would argue down to the individual. Every business will be exposed to this and it would be hard to find one that has not already been influenced by AI or robotics in some way, even if they do not know it yet.

When I look at where we are right now, we are trialling self-hosted AI. We are starting to trial robotics. At a small scale, we have locally hosted AI performing real work functions — running on our own hardware, not in the cloud, doing actual operational work. That will only grow, which means our power demand will only grow, and if we execute well, we will see an increasing return on every dollar we spend on energy infrastructure. That feeds capability, which feeds the ability for more investment. But it only started because we took the first step.

The future as I see it will have locally hosted AI and remotely deployed solar infrastructure at our worksites. The heavy earthmoving equipment will take longer to roll out, but as we build more energy infrastructure on site, the more viable it becomes to deploy electric and autonomous equipment in remote environments. In our manufacturing business, solar will be powering production, robotics and self-hosted AI systems running the operation alongside our team. It will power the backbone of our logistics operation locally, with diesel still handling the longer haul work. Do not be surprised in the next five years to see structural steel frames or additional roof structures on industrial sites built purely for the deployment of more solar.

None of this requires you to believe in any particular political position on energy. The maths works on its own. Cheaper energy is an advantage. Owned energy is a fixed cost in a world of floating costs. And energy infrastructure is the foundation layer for every piece of technology that is about to reshape how we operate.

I cannot solve for our reliance on diesel overnight, and I do not want to. But if we can keep deploying solar and batteries, recycling that capital back into the next deployment for meaningful returns, we are going to do it. If we can then channel increasing energy into increasing returns through robotics and AI, I think we start to have the potential for serious positive impact across the business. All while reducing our reliance on a single system, increasing our resilience, and hopefully engineering out some of the shocks the world keeps throwing at us.

At what point does having no energy strategy actually become a risk to your business?