Why Don't More Businesses Save Money Through Energy Management?

Richard Rugg, the Director of Carbon Trust Programmes, really can't understand why more organisations are not taking advantage of the free advice available from the Trust.

Because at relatively low cost a wide range of industrial, commercial and public sector organisations can cut their energy bills by up to 25% if only they took energy management seriously. Payback periods can be as low as two months - and then it's into the profit zone.

Richard is full of examples of success stories, such as a famous confectionary company who, within two weeks of developing an energy plan, had taken action and was seeing noticeable improvements.

It had set up a team that met on a monthly basis. The end result was a reduction in the energy bill of £22,000 - plus a 22% improvement in production output.

The total cost of the projects implemented was £58,790 giving a simple payback of 2.8 years. The company was also easily able to achieve its Climate Change Agreement targets.

The Trust is reminding businesses and organisations once again that it has a free Advice Line (0800 085 2005) as a first port of call.

But it has also published a new, user-friendly guide to managing energy and is running a free webinar on 28th September, which anyone can sign up to.

“Cutting overheads is rightly high on the agenda at the moment," says Richard. But he is still observing that energy costs don't receive the attention they deserve.

"When it comes to managing energy, ignorance certainly isn't bliss," he continues. "If you don't know where to start, download our new guide, and call our advice line for your free Energy Saving Plan, to see how your organisation could start cutting its energy bills."

Energy management is the systematic use of management and technology to improve an organisation’s energy performance.

But to be fully effective, it needs to be integrated, proactive, and incorporate energy procurement, energy efficiency and renewable energy.

The new guide, Energy management – a comprehensive guide to controlling energy use, is part of the Carbon Trust's Expert in Energy series, and contrasts poor practice with good practice.

Examples of poor practice include: treating energy costs as an unquestioned overhead; having no clear or consistent chain of responsibility for energy management; a lack of awareness of energy issues; and procuring energy from the same supplier year-on-year, without a cost comparison.

Good practice would involve treating energy as a strategic issue and its management as an opportunity, with strong guidance from board level permeating through to rewarded action throughout the workforce, with adequate resources and business planning attached to it.

The guide includes an Energy Management Assessment for an organisation to test itself on how energy-aware it already is and where there is room for improvement.

It can then chart its way through a handily-designed 'energy management matrix' of options.

The guide also points readers to other sources of help from the Carbon Trust, such as a document on how to make the business case for a carbon reduction project and get senior decision-makers on board.

Many companies have already taken advantage of the Carbon Trust's support, from household names like Sainsbury's - who used appointed 'energy champions' to save 5% on energy consumption - to small companies like Guala, a manufacturer of bottle closures for the spirits industry, which was able to make energy costs savings of £117,000 per year based on annual electricity savings of 2,000 Mwh, at their plant in Kirkintilloch, Scotland.

Some measures had ridiculously short payback times, and resulted from getting a fresh eye in to examine habitual behaviour patterns and point up ways to change them that meant money wasn't being unnecessarily wasted.

For Guala, this included increasing the temperature of cooling water, which cost £500 but yielded savings of £3,800 per year - a payback period of less than two months.

The same payback period came from an outlay of £2,500 for advanced ultrasonic leak detection equipment plus £8,000 for new nozzles and valves, which eased the load on the air compressors, saving over £58,000 per year.

Many energy efficient technologies qualify under the Enhanced Capital Allowances scheme, and may be written down in the year of purchase.

Furthermore, the Carbon Trust can provide Small and Medium Enterprises or businesses that do not qualify for participation in the Carbon Reduction Commitment, with an interest free loan of up to £400,000, repayable over up to four years, for investment in energy efficiency measures.