Renewable energy push has boosted the bottom line for O2 Marine, a Fast 100 list company which has doubled its workforce in the past 12 months.
At an industry networking event years ago, O2 Marine founder Chris Lane heard a competitor from a larger firm disparagingly refer to his start-up as an “angry poodle nipping at the heels of a great Dane”.
Four years later, his so-called poodle has outgrown the great Dane in size and scale. O2 Marine, included in The Australian Financial Review’s 2022 Fast 100 list, now boasts one of the biggest marine science teams nationally, having doubled its workforce to 45 over the past 12 months on the back of major port expansions by miners scrambling to meet the world’s appetite for Australian commodities.
We’re pretty much fully booked for the next two years, says O2 Marine founder Chris Lane.
Rising demand for iron ore exports out of Western Australia has created a flurry of work in environmental impact assessments. This boosted O2 Marine’s revenue by 50 per cent, to $7.3 million, for the year ended June 30.
O2 Marine will spend the next 18 months consolidating before hitting the acquisition trail to expand interstate.
Lane says about 15 per cent of its sales over the past two years have been derived from renewable energy generation projects, including hydrogen and offshore wind. This is off a base of virtually zero.
Looking ahead, he anticipates defence contracts will account for a big chunk of income. An Australian Defence Force white paper due next month is expected to unlock new investments in defence infrastructure, including port facilities upgrades and subsea technologies.
“We’re pretty much fully booked for the next two years,” Lane says.
O2 Marine has formed a new subsidiary focused on developing subsea technologies for military application in collaboration with the defence force and university researchers. It represents a completely new revenue stream for the business.
O2 Marine has a history of innovation in marine technology, having previously developed a low-cost wave buoy with funding assistance from a state research and development grant.
Lane is also seeing growth in hard-to-abate sectors, such as gas, turning to marine-based carbon sequestration, including mangrove regeneration, to reduce their CO2 emissions footprint and meet net-zero commitments.
The biggest threat to capturing these growth opportunities is a lack of skilled staff and rocketing salaries.
When you are passionate about what you do, success will follow.
— Chris Lane, O2 Marine
Lane is having to compete with 50 per cent signing bonuses from giants like Fortescue Future Industries.
“Salaries in our industry are currently not sustainable,” he says. “It’s frustrating, we’ve seen it before. At some point, it’s going to crash, people will be made redundant. I’d rather have sustainable salaries and have people keep their jobs.”
Lane set out to create a business model and ownership structure that allows team members to generate wealth and opportunity while doing something they love.
“When you are passionate about what you do, success will follow,” he says.
His advice for aspiring entrepreneurs is to “back yourself and don’t be afraid to ask for help when things get tough”.
Despite its expansion plans, O2 Marine won’t be straying from its bread-and-butter environmental compliance work.
“Our core business is built around being really good at the ongoing compliance. We secured some of the fastest approvals for marine projects in Australia ever this year. If we do a good job at each stage in a project lifecycle, a client is a client for life,” Lane says.
As a nation, we’ve got a long way to go in EV sales, says EVSE co-founder Brendan Wheeler.
Electric vehicle technology reseller and solutions provider EVSE has implemented out-of-cycle pay rises and biannual salary reviews to combat acute skills shortages amid a surge in demand from large property developers and fleet operators shifting to EVs.
Electrical engineers and project managers are currently commanding 30 to 40 per cent salary bumps, EVSE co-founder Brendan Wheeler says.
At the same time, inflation is driving up the cost of materials and transportation. This has been offset by a huge increase in volume which has helped to preserve profit margins over the last 12 months.
“There’s a big shift from government and corporates to electrify and decarbonise their operations to meet sustainability goals,” Wheeler says.
“Margins will be squeezed as it gets more competitive and there are more options, but the volume coming through is huge.
“Between 2 and 3 per cent of new car sales are EV now – which equates to about 30,000 cars a year out of a couple of million. We’ve got a long way to go.”
This demand has seen AFR 2022 Fast 100 company EVSE’s revenue increase by 95 per cent, to $7.5 million, for the year to June 30, with 30 staff spread between offices in Sydney Melbourne and Brisbane.
Wheeler says the new Labor’s government’s national EV strategy is a step in the right direction. But EV car makers will continue to overlook the Australian market unless the government imposes a fuel efficiency standard.
“Australia is one of just two developed economies without fuel efficiency standards, the other being Russia,” Wheeler says. It will become a dumping ground for the least efficient petrol-powered cars that can’t be offloaded elsewhere, he warns.
“Europe, China, the United States, their fuel emission standards ratchet up over time, increasing pressure on automakers to send EVs there. Australia is at the bottom of the list and risks falling even further behind without a fuel emissions standard.”
An eye-watering amount of EV infrastructure must be built over the next 20 years. And EVSE is positioning to capture the lion’s share of integration work.
It has secured crucial agreements with several EV car manufacturers, including KIA, Polestar, LDV and Renault to act as preferred supply partners to their dealership network and end customers.
“All the hardware and software we provide is agnostic to brands, it gives the customer maximum flexibility, which is essential for these infrastructure assets to get greater utilisation and better return on investment,” Wheeler says.
He says EV infrastructure networks must be interoperable and convenient to achieve mass market adoption.
EVSE is closely watching the emergence of “vehicle to grid” technology, which uses the car’s battery to power homes or feed back into the grid.
“That technology is very exciting, but there is a lot of work to be done before it becomes practical and viable, and realistically it’s a while off yet,” Wheeler says.
The rise of these so-called distributed energy technologies will completely reshape the sector. It has unleashed a turf war among the likes of Ampol, BP, AGL, Origin, car-makers like Tesla and even telecom companies. They are all fighting for a piece of the action.
“Everyone is vying for the customer. There’s a lot of convergence and it will be interesting to see who comes out on top. In the meantime, we’re going to supply all of them,” Wheeler says.
Energy-efficient hot-water pump-maker Solar Thermal expects exports to overtake domestic sales within three years as the Russia-Ukraine conflict accelerates the shift from gas to electrification in Europe and the United States.
“Europe will be one of our biggest markets,” Solar Thermal chief executive Chris Taylor says.
He points to Europe’s progressive clean energy policies as a key driver of growth, including a raft of micro reforms in construction codes that hold valuable lessons for Australian legislators.
The global energy crisis, soaring domestic power prices, and generous government rebates have supercharged Solar Thermal’s sales. Included in the 2022 AFR Fast Starters list, its revenue increased 104 per cent to $9.5 million for the year to June 30.
Based on year-to-date orders, Taylor says the 2022-23 financial year will be even better, provided it can secure critical components and overcome supply chain issues that have resulted in ships bound for Australia being rerouted to Europe at the last minute.
Taylor travelled to Japan this month to shore up the supply of critical components and formalise international expansion agreements.
He says Australia’s ability to secure sufficient product to meet forecast demand in the niche where Solar Thermal plays is vastly diminished by lagging legislation.
“At the moment, consumers are doing the heavy lifting and the pace of change is stymied,” Taylor says.
Australia is also at risk of becoming a dumping ground for inferior heat pump products if governments don’t resist pushback from incumbent technology suppliers and impose energy efficiency ratings on hot water systems for residential and commercial use, he warns.
“Most builders will look at the legislation and do the minimum to meet it as cheaply as possible,” Taylor says.
Plumbers are the other key influencer in the green building value chain. Taylor says mechanisms to break the cycle of replacing old systems with conventional technology without exploring low-emission alternatives needs to be broken to accelerate the decarbonisation movement.
“There is a massive education piece,” he says.
Solar Thermal aspires to capture roughly 3 per cent market share domestically, which equates to around 20,000 out of the 700,000 hot-water systems installed annually.
Right now, Taylor says dealers are seeing so much demand, they are ordering container-loads of product.
But inflationary pressures are biting. Solar Thermal’s profit margins have been hit by rising fuel prices and the removal of diesel rebates. The cost of transporting a system from its Byron Bay assembly plant to Victoria has risen by 230 per cent in the last four months, Taylor says.
A former lecturer in organisational behaviour and leadership at the University of Western Australia, Taylor was engaged as a consultant five years ago to write the business case for Thermal Solar by his now Japanese supply partners.
He had previously dabbled in reselling imported solar hot-water units but recognised this technology was being superseded by cheaper photovoltaic rooftop solar. Instead, he and engineer Dr Saeed Tehrani designed a hot-water system that would complement PV solar systems rather than compete for roof space.
Taylor was engaged as caretaker chief executive for four months while a suitable candidate was found. He never vacated it and now manages a team of 13 staff based in Byron Bay, Melbourne and Sydney.
Taylor’s advice for aspiring entrepreneurs: enjoy what you do. “If you’re going to run a business going through fast growth it’s got to be fun because it’s pretty stressful,” he says.
Banks must offer better green finance options for asset owners trying to retrofit and decarbonise existing building stock if Australia is to meet its carbon emissions reduction targets, Bridgeford Group managing director Nick Tassigiannakis warns.
The net-zero consulting and engineering house started out three years ago working with clients such as the City of Melbourne to electrify their 40 largest gas consuming buildings in a feasible way from a capital and operational expenditure perspective.
Having assessed more than 200 facilities since, across state government, local councils, universities and for large property groups, Tassigiannakis says a lot of this activity is bankable.
“The challenge is that banks don’t have the necessary level of sophistication in their loan assessment process and product offerings,” he says.
We must raise the bar on energy efficiency standards, says Bridgeford Group managing director Nick Tassigiannakis.
The decarbonisation movement has seen Bridgeford Group’s revenue surge by 102 per cent, to $1.3 million, for the year to June 30, earning it a place in the 2022 AFR Fast Starters list. Its team has swollen from four to 12.
“We saw a gap in the market relating to upgrade pathways at a portfolio level. For example, when, how, and why you prioritise certain facilities and projects, and the unique challenges at each site,” Tassigiannakis says.
He feels the National Construction Code 2022 is a missed opportunity to incentivise property developers and asset owners to move beyond “the easy stuff” and tackle more challenging elements such as heating and cooling. These have a long way to go.
“The National Construction Code 2022 is lacking in a number of areas,” Tassigiannakis says. “Definitely for new facilities you need to raise that bar on energy efficiency standards.”
This would reduce the overall cost of decarbonising the economy, he explains. Things like upgrading from double-glazing to triple-glazing pose a margin cost in new builds compared to retrofitting it in an old one.
But focusing on new developments alone won’t move the dial fast or far enough. The volume of existing building stock far exceeds new construction and it is in this space that assertive decarbonisation solutions are needed.
Inflationary pressures are being felt across Bridgeford Group’s business. It has created an additional impetus to automate repeatable functions using software, something that was already on the firm’s strategic road map.
“It’s up to us to increase productivity while delivering to the same quality,” Tassigiannakis says.
The firm is also investing in unique intellectual property, including a tool that allows clients to reset their decarbonisation road map, based on changes in upgrades, advancements in technology or changes in energy and cost structures.
Over the next 12 months, Bridgeford Group wants to expand into the health care, which is ripe for reform, according to Tassigiannakis.
Follow the topics, people and companies that matter to you.
Fetching latest articles
The Daily Habit of Successful People
Recent Comments