There is no shortage of facts and figures to illustrate the huge savings businesses can make by becoming
energy efficient. According to the Carbon Trust,
small to medium-sized enterprises (SMEs) have the most to gain – 20 per cent savings on
energy bills (compared to eight per cent for larger organisations). Further research by the not-for-profit company concludes that through
energy efficiency measures,
SMEs could collectively save almost £400 million per year in energy costs and over 2.5 million tonnes of CO2.
Yet, all the evidence points to the fact that most
SMEs are still failing to take advantage of these massive cost savings – despite seeing big increases in their energy bills.
Recent research from energy company E.ON shows that energy inefficiency is costing UK’s SMEs £7.7 billion a year. Its research found four million out of the 4.8 million SMEs in the UK are not implementing any energy efficiency measures, translating into costs of up to £2000 per company. Research from energy experts, Energy Savvy, backs this up with figures showing that businesses can waste around 40 per cent of their energy, "if they fail to follow good energy conservation principles".
So why – if the figures in favour of energy efficiency are so cut and dry – are SMEs not embracing energy efficiency wholeheartedly?
Research from SECOS, an energy management company, reveals that despite policy makers’ best efforts at presenting the business case for sustainability, "SMEs remain highly resistant to voluntarily improving their environmental performance." This is because SMEs are "mainly driven by the goal of economic prosperity and face ambivalence as to whether improving environmental management will actually increase profits," SECOS says.
Myles McCarthy, managing director at Carbon Trust Implementation Services, adds: "One of the key reasons why SMEs don’t tackle energy efficiency is down to a lack of dedicated resources committed to sustainability and energy and a shortage of time on which to focus on these issues."
Another reason, according to SME energy broker Make It Cheaper, is the fact most of them rent the premises they work from (around 60 per cent), and don’t have any real incentive to spend time and money on greening their workplace.
"Our research shows the main factors [for not taking action] are time and not wanting to improve the fabric of a building that they are only going to be in for two or three years – and the absence of dirty great big [regulatory] stick like the Carbon Reduction Commitment," says Jonathan Elliott, managing director at Make It Cheaper.
The truth is though that SMEs that fail to take control of their energy costs and consumption are going to find it increasingly hard to compete in the future. DECC predicts that by 2020 non-domestic energy bills for medium-sized consumers will be 26 per cent higher, (although some sources suggest this is likely to be nearer 37 per cent higher).
McCarthy says this should sharpen SMEs’ focus on the energy efficiency issue: "Historically, energy costs have not been a significant for many SMEs, but as [they] continue to rise above the rate of inflation, it will be even more important for businesses with tighter margins to look at energy efficiency to improve their bottom line."
Although energy cost predictions are grim, McCarthy believes there are many opportunities for businesses to become more energy efficient – some of these are without big cost or time implications.
"Businesses can improve energy efficiency, without replacing existing equipment, by making staff aware of basic energy efficiency measures such as turning lights and equipment off, but also by ensuring the equipment is maintained properly and that the control settings on air conditioning and heating are set properly," he says.
The Carbon Trust has just launched an online learning tool – Carbon Trust Empower – to tackle the problem of employee engagement. It claims it has the potential to save a typical small business over 15 per cent in energy costs.
Other routes towards energy efficiency for SMEs do require a financial
investment, but, says McCarthy, as energy costs rise, the business case is getting stronger. "The opportunities for investing in energy efficiency and getting a short pay back is much more attractive," he explains.
LightingLighting is one area where SMEs can make a big difference to their energy efficiency and ultimately to their bottom line.
According to recent research by the Carbon Trust, investment in lighting efficiency could collectively save UK businesses and organisations up to £700 million a year.
"Investments in quality lighting solutions incorporating energy efficient lamps and luminaries (including LED technology) and lighting controls can deliver high returns very quickly," Eddie Taylor, chief executive at the Lighting Industry Federation, says.
The good news for businesses is that LED lighting has made huge strides in terms of quality of light and payback time in recent months.
MHA Lighting based in Atherton, Manchester, for example, has developed a 'revolutionary’ LED technology that offers up to 80 per cent energy savings.
The company recently installed LED lights in a branch of the convenience store, SPAR, in Widnes.
"By installing our LED lighting, energy consumption at SPAR Widnes was reduced by 79 per cent and the annual electricity costs have been reduced from £7,629 to £1,618 per annum," MHA Lighting managing director, Tom Harrison, says.
ITIT equipment consumes a lot of electricity and, according Andy Hawkins, product manager at
IT efficiency company, 1E, is a business’ second largest consumer of energy, behind heating and cooling.
He suggests SMEs should ask themselves three questions about their IT: "What is it costing me? Is it doing anything useful? What can be done to make it more efficient?"
Hawkins believes that because IT departments have not traditionally paid the electricity bill, they haven’t really cared about consumption. This is a view backed up by global IT company Faronics. Its own research shows that more than 40 per cent of businesses have no policy in place to power down computers out of hours.
But, according to the independent technology analyst firm, Ovum, PC power management (PCPM) solutions can deliver average power consumption savings of 40 per cent. It recently assessed 11 of the leading PCPM solutions and found they could on average deliver annual power consumption savings of around £23 per PC per year, while the payback period for many solutions was no more than six months.
SMEs can also make energy savings by investing in energy efficient hardware – up to 28 per cent, according to Kyocera Mita, the sustainable printing solutions provider.
Tracey Rawling Church, director of brand and reputation at Kyocera Mita, advises that when replacing ageing printers and copiers, consider replacing separate devices with a single multifunctional as they consume less – and choose new devices with a fast warm-up time.
"Always buy devices that are Energy Star compliant, it’s the de facto global standard for energy efficient equipment," she says.
According to research by Gartner, a typical PC runs at 114 watts, translating into costs of £114 per year to run, but UK manufacturer VeryPC makes computers that, on average, use less than 20 watts a year.
Sustain, a carbon reduction company based in Bristol selected VeryPC as its desktop supplier and found that this didn’t mean compromising on efficiency or reliability.
"As a carbon management company, VeryPC’s environmental credentials were the initial draw, but the efficiency, reliability and build quality of the machines […] meant it was an easy decision to select them as our sole desktop PC provider," Kevin Dines, ICT associate, Sustain, says.
Voltage optimisationVoltage optimisation is beneficial when a business’ electricity supply is at a higher voltage level than needed. The average voltage from the National Grid is 242 volts, whereas many electrical devices only require 230 volts, resulting in higher electricity bills. Voltage optimisation systems work to optimise the voltage without compromising the supply. The technology is not just suitable for large, energy intensive businesses, but can also deliver small businesses energy savings of 10 per cent.
Sean Quinney, general manager, Down Hall Country House Hotel, Hertfordshire, installed a PowerPerfector voltage power optimisation unit at the property and says the hotel is now achieving "savings in the region of 20 per cent year-on-year in electricity usage."
Dr Alex Mardapittas managing director of EMSc UK Ltd, which manufactures the Powerstar voltage optimisation system, adds: "Savings from the installation of voltage optimisation systems can be achieved very quickly, with ROI achievable in many cases, in only two and a half years."
InsulationInsulation is another solution that can reap energy cost savings for SMEs easily. According to the National Insulation Association (NIA), 50 per cent of a building’s heat is lost through the roof and walls as a result of inadequate levels of insulation.
Bill Rumble, commercial director for energy saving installation company, Mark Group, says insulation is the next step along the route to energy efficiency after a business has integrated using less across the business.
"We advise our customers and clients to look at the bigger picture, the 'whole house’ if you like. We have adopted the phrase 'use less, lose less, generate more’," he says.
The NIA recommends that SMEs use an approved installer for a free survey on insulation measures including loft insulation, draft proofing, cavity wall insulation, and solid wall insulation either internally or externally.
Insulation isn’t just limited to heat loss via a building’s structure, but also to heating and steam pipes.
Johnson Matthey Catalysts, in Billingham in Stockton on Tees, fitted insulation to steam distribution pipes, valves and flanges, which resulted in an annual cost savings of £5,880 with a payback period of 1.6 years.
"The improved standard of insulation of steam pipe and fittings represents a relatively low-cost improvement with an attractive return that results in a significant energy saving and environmental benefit," Adam Woodhouse, Asset Manager, Johnson Matthey Catalysts, comments.
Heating, ventilation and air conditioning Heating, ventilation and air conditioning (HVAC) are major contributors to energy bills.
According to The Carbon Trust, air conditioning can increase a
building's energy consumption and associated carbon emissions by up to 100 per cent.
It is possible to make existing HVACs more energy efficient through regular maintenance and utilising system controls properly, but if HVAC systems need renewing, then installing energy efficiency equipment can "pay back its costs very quickly", according to the Carbon Trust.
Optical disc replicators, the London based, VDC Group, fitted an evaporative cooling system at its warehouse centre as summer temperatures became stifling.
Evaporative cooling works by flowing fresh air over water saturated pads and results in a an cooling system that uses up to 80 per cent less energy than traditional air conditioning.
Commenting on the company's system, Joe Bennis, group manager, VDC Group, says: "The system is working very, very efficiently and is very economic to run."
Heating and hot water
Heating and hot water can account for up to 60 per cent of an SMEs total energy use, so it makes sense to reduce consumption as far as possible. Significant savings can be achieved through simple measures, such as turning heating down by one degree centigrade, which can reduce heating bills by up to eight per cent. Servicing a boiler can save up to 10 per cent on heating costs, while setting timers to heat the building according to occupancy use can also have dramatic effects on heating bills.
In addition, there are a number of technologies on the market that can be integrated into an existing building management system (BMS) and reduce energy consumption. Sabien Technology’s M2G intelligent boiler load optimisers allow companies to save up to 25 per cent on energy consumption, the company says.
International Students House (ISH), which provides permanent and long stay accommodation for British and international students at two properties in central London, installed a total of eight M2G units to existing boilers in two buildings. It has recorded savings in gas consumption of 14 per cent to date, saving the company over £11,000 a year and giving it a payback period of around 1.3 years.
"The performance of the M2Gs was assessed during the very cold weather at the beginning of 2010, so we are impressed with the reduced gas consumption under these conditions and can reasonably expect greater savings in future years," ISH chief operating officer David Chapman says.
Again, if heating systems need to be renewed or installed, there are many energy efficient options to consider, such as radiant heaters to heat small areas efficiently and de-stratification fans to blow warm air down to ground level.
Joseph Barraclough, a Yorkshire based textile company, operated an old boiler and steam heating system and had annual energy bills of £92,000. The company replaced the heating system with suspended gas fired fan heaters, saving itself £11,410 a year in fuel bills, with a 4.6-year payback on its investment.
Once a business has reduced energy consumption and become more energy efficient, the next step to becoming more sustainable is switching to fuel from a renewable energy source, according to the experts.
"Energy efficiency is just the start of a sustainable business journey," says McCarthy, "Energy is a major cost but there are other costs as well, and as a business becomes more sustainable overall then this will have an even bigger impact on the bottom line."
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