There’s been plenty in the press highlighting that the wholesale cost of energy makes up only a proportion of overall energy bills. The remainder of the bill is as a consequence of a bewildering array of charges and taxes incurred as a result of generating and transporting energy from A to B. Therefore, even if energy wholesale prices fall, the impact on customer bills will be limited. Conclusion: The most sustainable way of reducing the cost of energy is to use less.
As this BBC article highlights, there is a huge range of energy saving technologies for businesses to choose from, driven by an increasingly strategic approach to energy management. More firms are recognising that reducing consumption makes good commercial sense. Energy forms an increasingly significant cost in many sectors; reducing consumption can be a key initiative to gain a long term and sustainable competitive cost advantage.
But where do you start? Understanding current consumption is a good place; but what and how do you measure it? How does usage break down into its component parts? What targets should be set? In what order should projects be tackled? Which measures will deliver the optimal cost/benefit? What is the business case for investment? What schemes are mandatory for businesses to comply with? How will changes to business activity/production drive energy costs? There are incentives to help businesses deliver improvements and reduce energy consumption – but how do you get hold of them? What sorts of projects are eligible for incentives?
Answering these questions is often complex and time consuming. With so many companies pushing their particular products, how can you tell if the claims are accurate? If you implement one energy saving measure, what will be the impact on the business case for another? What are the opportunities for making improvements that are free or very low cost – and what will be the likely impact? There is no shortage of firms offering a “free” energy audit, but what’s their agenda and can they be trusted? And will an audit cover all the areas that firms may soon be obliged to report on within the scope of ESOS (e.g. transport is an area that many organisations are going be caught out on)?
Some larger organisations have a full time energy manager to deal with the increasing complexity. Like any role within an organisation, there are pros and cons with DIY vs outsourcing. But for many mid-sized organisations, employing someone full time is not a viable option.
Talking to independent and objective advisers is a good place to start. They should start with a high level review to scan for opportunities and identify areas to survey in more depth. Identify the “no-brainers” and low/no cost options – and get staff involved to change habits/culture. Follow on with a high level analysis and assessment of selective areas identified in the first stage to get a rough idea of the cost/benefit before targeting individual projects for a detailed, specialist audits. You will then be in a position to make informed decision, with projects more likely to deliver the expected benefits.
If you would like to discuss this further, please contact us