All businesses want to be efficient, right? We all know that that you save 100% of the cost of an item not purchased so cutting down on the amount purchased will give you a better saving/unit than a marginal improvement in unit pricing. So, what is preventing energy efficiency improvement in UK businesses?
A recent study by the Energy Managers Association and EON, on how energy efficiency is managed by British businesses, found that 88% of businesses are actively reviewing energy efficiency. The most popular projects being considered include:
- Implementing metering and monitoring systems
- Lighting solutions
- Installing Building Energy Management Systems (BEMS)
- Heating, Ventilation and Air Conditioning (HVAC) efficiency improvements
- Demand Side Reduction (DSR) projects
- On-site storage (batteries)
However, the study also found the top five obstacles to implementing energy efficiency projects are:
- Lack of funds, incentive or return on investment
- Lack of capital
- Inability to build a business case
- Organisational structure
- Corporate apathy
Other obstacles were also listed, including a lack of in-house expertise, lack of understanding of new technologies and lack of management buy-in, risk and risk management, objective advice and so on.
What’s the fundamental problem?
Why are businesses unable to make the right decisions? No director will commit to capital expenditure that does not provide a real return on investment, risk and corporate social responsibility targets.
Therefore, framing the “why projects aren’t being done?” question would be better asked:
“What is preventing proper project returns being reliably calculated and the other impacts on a business case (technology, risk, etc.) properly assessed and managed?”
It is down to getting the right expertise.
The basic problem therefore may be a lack of suitable expertise and resources in the business (time, people, experience, expertise, supplier knowledge etc.) to prepare the business case and manage the project. Many businesses can’t justify having such resources permanently employed and may also be simply unaware of the opportunities that may be there.
Here the justification for outsourcing frequently applies: you could do it yourself, badly, or employ an expert full-time, or ask specialists who can do it correctly and cost-effectively.
Auditel affiliates have many years of combined experience in helping our clients in many sectors develop suitably complete and reliable business cases for energy efficiency projects as well as implementing the projects.
If you would like a conversation on how Auditel has helped organisations in the UK define and manage energy efficiency projects, please email or phone me.
Article by: Mike Jearey