Energy efficiency and saving money

Energy is the third largest cost for most food or beverage manufacturers, after materials and labour. Energy is easier to manage.

You can optimise your energy use without harming your business through:

  • efficiency
  • monitoring
  • timing your loads to manage peak demand and coincide with lower energy tariffs.

As energy costs increase, investing time in reducing energy use will prove worthwhile.

Reasons for and costs of energy in your business

All businesses differ in how they use energy. Your business energy costs depend on: 

  • how much energy you use
  • whether you use electricity, natural gas, or another form of energy
  • when you use energy.

You should review your energy costs regularly, even if only to check that you’re on the best tariff.

A useful way of tracking your energy savings progress is by working out the cost of energy you use compared to what you produce. You can do this by dividing your energy costs by the volume of your product. 

For example, if your energy bill is $15,000 and you produce 150,000 baked items, your energy costs you 10 cents per item.

Many services powered by gas or other fuel can now be electrified, which is a first step towards decarbonisation.

These graphs show how small to medium bakeries use energy and where there might be savings opportunities. 

Typical energy use split by energy type, small to medium cake and pastry manufacturing. Shows Electricity as32% and Other as 68%.
Typical energy use split by activity, small to medium cake and pastry manufacturing. Shows Production/Baking as 29%, Transport as 20%, Freezing/Chilling as 26%, Washing/Sterilising as 17%.

Measuring and valuing energy

The easiest way to understand your energy use and costs is through your bills. However, they probably don’t show when you used energy or what you used it on. 

There are metering and monitoring tools available to give you that data in real time. Sub-metering can be easily ‘clipped on’ to a particular process or piece of equipment to tell you how much energy it is using. These tools can generate reports and highlight irregularities which help to identify equipment which is operating inefficiently or needs maintenance. You can apply for an Energy Efficient Communities Food and Beverage Manufacturing Business (EEC) grant to purchase, hire and install energy meters, or to digitally connect energy meters and process sensors. 

Energy audits

An energy audit can give you immediate savings through:

  • reviewing the energy tariffs you pay
  • identifying equipment maintenance needs
  • identifying potential low-cost interventions.

An independent expert audit, to the Australian Standard, is likely to cost $5,000 to $10,000 depending on the complexity of your business. The audit might compare your business against similar businesses. It should provide you with an action plan, prioritise tasks according to impact, and show you the costs and benefits. 

The plan might also include suggestions for:

  • on-site generation and storage
  • demand management
  • use of waste
  • decarbonisation. 

Audits are of most value when they are based on good quality data, so before you start, consider improving how you measure your energy. At the very least you’ll need to locate your energy bills from the last full year.

You can apply for an EEC grant to carry out an energy audit at your bakery product processing business.

Opportunities for improvement

You can apply for an EEC grant to carry out these activities, except for the ones noted as not eligible:

  • review your tariffs, consumption and bills (not eligible for EEC grant)
  • carry out routine equipment maintenance including seals, filters, settings (not eligible for EEC grant)
  • install or upgrade metering
  • implement a monitoring program 
  • commission an energy audit 
  • check your electricity distribution board and modernise if required, so that you can upgrade to use electrically-powered equipment  
  • install power factor correction or voltage optimisation equipment. 

Small businesses can use the Small Business Energy Check - external site - external site  to compare their energy spend with similar businesses in the same sector and region. Small businesses in NSW, QLD, SA, TAS and ACT can also compare energy plans from different retailers at Energy Made Easy - external site - external site .

If you’ve got a sense of your position and you’ve captured the easiest opportunities you might:

  • install or replace a component to help an existing system run more efficiently
  • replace existing equipment with more efficient equipment
  • reconfigure a process to optimise energy use.

Likely opportunities for bakery product manufacturers

Optimise process heating

  • Audit performance 
  • Optimise controls and timers 
  • Schedule and carry out routine maintenance, check and replace oven seals (not eligible for EEC grant)
  • Optimise equipment insulation
  • Use recovered heat from oven exhausts to heat water 
  • Replace ovens with higher efficiency units 

Keep cool rooms cool

  • Maintain seals (ineligible under EEC)
  • Insulate refrigerant piping 
  • Reconfigure processes and equipment to reduce cooling loads (not eligible for EEC grant) for example, pre-cool product before freezing 

Optimise fridges and freezers

  • Audit performance
  • Optimise controls and timers 
  • Schedule and carry out routine maintenance 
  • Recover waste heat
  • Replace low efficiency fridges and freezers with high efficiency equipment


  • Install a heat pump for hot water requirements for cleaning and washing-up water. Invest $5,000 and save $500 per annum. 
  • Replace a commercial fridge or freezer with a high efficiency unit. Invest $5,000 and save $500 per annum. 
  • Install a metering, monitoring and control system. Invest $15,000 and save $3,000 to $6,000 per annum.

Pretzels in a conveyor oven.