Beating the barriers to energy efficiency in association with the CARBON TRUST
Business leaders are expecting double digit price rises in
energy bills over the next three years and there is increasing concern this will lead to a growing impact on
business efficiency and
profitability. We’ve found that three quarters of businesses are more concerned than they were six months ago about rising energy costs and are very concerned about the impact on their business. However, 35 per cent do not currently have a plan in place to manage energy price rises, but acknowledge that they should make one.
So what’s holding businesses back from making plans to cut energy consumption at a time when energy prices are rising? We asked UK company owners and found that the most common reasons are: insufficient time or resources, not being able to quantify the expected returns, and energy efficiency being a lower priority than other business considerations. With this in mind, here are 10 tips for helping businesses tackle these factors and capitalise on energy efficiency:
1. Start with the basicsSome energy saving steps can be taken without any capital expenditure, particularly in terms of facilities management and operations. For example, Ladbrokes looked at the heating controls in 2,000 stores and set its systems to turn off heating outside normal opening hours resulting in significant energy savings without the need for major investment. This can have a particular impact in sectors such as retail, hospitality and leisure where lighting and heating are intensive. It is also important in manufacturing, industrial and warehousing where lots of machinery can consume energy.
2. Behavioural change
Encouraging staff and partners to take simple steps on a daily basis to reduce energy consumption is also a good starting point. Sainsbury’s appointed an energy champion in each of its stores to encourage best practice amongst other staff, promote good facilities management and highlight how the store is doing in comparison with other outlets. This led to a five per cent saving on annual energy saving across the group. One aspect to consider here is that this requires less capital expenditure but does require time from the management team to drive these schemes. In general, making a capital investment in energy efficiency typically generates more consistent, long-term savings and takes up less time for senior executives.
3. Identify the primary areas of energy consumption
Every business has unique patterns of energy consumption depending on how many shops or offices it has; how many staff it employs and the technology it uses. Some areas which often have high energy consumption include lighting, heating, cooling and powering equipment. Working out where these 'hot spots’ are and investing in new equipment can make a dramatic difference to energy bills. For example furniture retailer, WJ Aldiss saved £41,000 per year on its annual energy bill by installing energy saving lighting in its office and showroom.
4. Build the business case to prioritise energy efficiency
Energy efficiency projects can often deliver paybacks within one two years and lead to rapid, ongoing gains in operational efficiency. An important step is to benchmark energy performance; quantify the savings that specific steps will take and demonstrate how quickly these schemes can pay for themselves. For example Peach Pubs, the leading gastro pub group, invested in more efficient lighting for its restaurants, which paid for itself in less than two years. Independent services are available at no cost, which can help you make these calculations.
5. Assign an owner for energy projects
As mentioned, energy efficiency schemes are sometimes sidelined within a company and so allocating a senior owner who has the authority to approve energy efficiency investments and projects can help progress projects quickly – often this is an operations or financial director. Also this demonstrates that your company is serious about making improvements in this area, which motivates staff to get involved. It is worth the senior time – Astrum, a steel company was able to cut its energy bill by £80,000 and reduce CO2 emissions by 600 tonnes a year by improving its operational processes.
6. Carefully run and plan tenders
Clearly outlining project requirements to prospective suppliers is important to receive a detailed picture of which company offers the best deal. All proposals should provide whole life costings for the proposed solution, showing both the upfront capital cost of the equipment as well as the running costs (including estimated energy consumption and maintenance). Also make sure you receive quotes from at least three established suppliers to have a good framework for comparison. Again, independent services are available at no upfront cost which you can use to plan and coordinate tenders to save time for your management team.
7. Look for trusted, accredited suppliers
Embarking on an energy efficiency project such as low energy lighting or new efficient boiler systems requires the help of an accredited supplier with a proven track record. We’ve worked with the UK’s leading energy efficient equipment suppliers over the last 10 years. With our new accreditation scheme, Carbon Trust Implementation Services can provide an independently accredited list of trusted, reliable suppliers which enables you to choose the best technical support for a particular energy efficiency project.
8. Securing funding
Access to capital to purchase new energy efficient equipment can be a challenge as banks are often unwilling to lend in the current climate. However businesses can obtain finance from the Carbon Trust in partnership with Siemens Financial Services, which provide easy, affordable and flexible energy efficiency financing options. Flexible financing can often match estimated energy savings to monthly repayments, enabling investment in new capital equipment having no impact on an organisation’s cashflow.
9. Continue to evaluate energy projects
It is worth evaluating the success of different energy efficiency projects at regular stages after their completion. It helps demonstrate the return on investment for future projects; to identify which measures are delivering the biggest benefits and can highlight future enhancements to business operations.
10. Reputational gains
Energy efficiency has a tangible impact on the bottom line for an organisation, it can save a company tens of thousands and pay for itself within a short time period. In addition, there are significant reputational and commercial benefits. Efficient energy use invariably improves an organisations carbon footprint and wider environmental impact. According to research by the Carbon Trust, 56 per cent of the public are more loyal to brands that can show evidence of action to improve their environmental impact and 53 per cent want to work for companies which can clearly demonstrate a commitment in this area. This can be a great way to distinguish a company, product or brand and can help differentiate your company in new business tenders, marketing and recruitment.
For more information, please visit www.carbontrust.co.uk/implementation or call 0845 6008683.
