Effectively overseeing a $100 million energy portfolio across 287 sites – all in Australia’s volatile energy market – has garnered chemical engineer Michaela Craft a slew of awards.
If you’re struggling to keep track of rising energy prices in your own home, spare a thought for Michaela Craft. As energy manager of leading gas and engineering company BOC, Craft oversees the company’s $100 million energy portfolio, which includes the electricity, natural gas and renewable energy certificates for its 287 sites across Australia and New Zealand.
In addition to BOC’s energy procurement, Craft is responsible for developing the strategies behind how and when they buy it. At a time of unprecedented change in the nation’s complex energy market, this is no easy task.
Research from Australian consultancy WattClarity shows average wholesale power prices for east coast states in the National Electricity Market (NEM) have jumped between 150 per cent and 240 per cent over the past two years.
Craft said the market’s volatility was most evident during the summer of 2016-17, when rising demand and a contraction in supply contributed to a spike in costs. It was a time she describes as “challenging”.
“We had a lot of extreme weather events and the highest [energy] pricing on record,” Craft said.
“Making a call on how we could best approach that summer and beyond, and then educating BOC management about the risks, benefits and overall impact was definitely my most challenging experience to date, but also the most rewarding. I learned a lot about myself and how you’ve really got to be resilient.”
Ready for the challenge
Resilience is just one of Craft’s strengths. The role of energy manager is both complex and crucial to BOC’s operations, and the dynamic nature of the energy market can see costs changing right throughout the day.
Craft’s talents have been recognised through a number of accolades over the past year, including the Rising Star of the Year at the Women in Industry Awards and the Young Achiever of the Year at PACE’s Zenith Awards. At the time create spoke with her, Craft was also preparing for a more personal achievement – the birth of her first child.
Craft is confident that BOC will support her re-entry to the workforce after maternity leave but notes that such support is not widespread within the engineering industry.
“I don’t think gender has played a role in my career opportunities so far,” she said.
“My husband is also a chemical engineer and we’ve always had the same opportunities. Where I see the difference is more at the management level, particularly as women try to re-enter the workforce after having children. Finding a company that will be flexible and allow you to keep climbing the ladder isn’t always easy, but I feel quite confident that the opportunities will remain for me.”
A career in engineering was a logical step for Craft.
“My high school principal had actually been an engineer before she went into teaching, my dad used to be a surveyor and my sister is a mechanical engineer, so I always had exposure to the industry,” she said.
“I knew that engineering could open up a lot of doors. I’m also a logical problem solver, so I think I’ve always had an engineering mind when it comes to that.”
The creative side of engineering was also appealing.
“I love the idea that you can take one thing then mould it into something else,” Craft said.
After graduating with a degree in chemical engineering from University of Sydney in 2012, Craft underwent the graduate program at MARS, which she describes as valuable training ground.
“I really enjoyed my time at MARS and I got a lot of training but, as it is a FMCG [fast-moving consumer goods] company, there was a strong focus on sales and marketing and I was keen to progress in an engineering environment.”
Craft joined BOC’s operations team in 2014 before moving into a role in the company’s
energy group. Her current role involves negotiating energy contracts, developing budget forecasts and reviewing and improving the energy efficiency and operating profiles of BOC’s industrial gas operations.
“I look at how our plants are designed and work with the operations team to develop the best and most cost-effective way of running them from an energy perspective,” she said.
The NEM is an interconnected grid made up of regional networks that supply around 200 terawatt hours of electricity to businesses and households each year.
Its spot pool market is operated by AEMO, which publishes a half-hourly spot pool price for electricity in each region. Pricing tends to be highly volatile, ranging from minus $1000 to $14,200 per MWh and, to hedge against the financial risk and provide with greater price certainty, some parties choose to buy energy through futures contracts.
This involves taking delivery of a specified amount of electricity at an agreed contract price. It’s a risky business, but Craft enjoys the challenge.
“If you’re locking in power for the next 10 years, your risk is whether the price will go up or down,” she said.
“In the shorter term, there are some onsite management things we can do to operate a plant most efficiently. This includes potentially shutting them down or starting them up in peak or off-peak times. It’s really about understanding forecasts and expected demands.”
A key part of Craft’s role is communicating the risks and rewards behind her energy strategy.
“There’s a real education piece to my role,” she said.
“I need to be able to explain to management why we’re buying [energy] at certain times and what the risk profile is of buying it on a futures basis or on the spot market and how it aligns with the overall business strategy. I work very closely with the operations team at BOC, as well as the planning team and the marketing team to ensure I’m aware what’s coming up for the business, so I can ensure we make the best decisions possible.”
It’s a role that requires a high degree of confidence, a quality Craft said she sometimes lacks.
“You’ve got to make sure there is a clear strategy behind your decisions and that people understand the upsides and downsides,” she said.
“A lack of confidence is something I’ve always had to try to overcome. There’s a lot of trust in me in this business, which is great, but I think the person that trusts me the least is myself.”
Stephen Murphy, Manager, Projects and Improvements at BOC, has seen Craft’s confidence grow over the two-and-a-half years they have worked together.
“Michaela’s role requires her to attend high-pressure meetings with senior management where she needs to defend her arguments and influence business decisions,” he said.
“This isn’t a skill taught at any university, but a skill she has had to learn and master during her career development. Since joining BOC, Michaela has grown in confidence, which has helped her defend and influence decisions.”
Murphy added that the versatility of Craft’s engineering degree has been vital to her success.
“It has allowed her to maximise every opportunity and break down complicated issues into simple, achievable activities,” he said.
With no crystal ball to help chart energy prices, Craft has learned to back her own decisions.
“Sometimes you will make the wrong call and sometimes you will make the right call because you’re dealing with an unknown territory,” she said.
“That’s always going to be the case.”