The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

Cheaper Tariffs Won't Reduce Energy Costs

06 October 2016 | Updated 01 January 1970
 

Energy cost management typically focuses on securing the best priced tariff at a given moment in time, but we are all barking up the wrong tree, singing the wrong tune and we need to call time on this particular merry-go-round, according to Ken Warner, MD, Energy Renewals

Instead, businesses should lower their energy usage. A reduced carbon footprint is good for the environment and is an all-important tick in the corporate social responsibility box. But it also reduces costs.

This is the message I will attempt to convey when I take to the podium at the 11th Facility Management and Property event which takes place at Cambridge University on 6 October 2016 

Whilst it sounds simple, it is easier said than done. Hence, most company bosses don’t think about their energy costs until the quarterly bill lands on the corporate doormat. It is far more painless to demand a cheaper tariff or change suppliers rather than implement a complicated strategy to reduce energy consumption no matter how longer lasting the effects or the more money which can be saved.

Adopting a six-step energy management strategy – audit, collate data, evaluate, recommend, implement and measure, will see companies on the right track of reducing both their energy consumption and their bills.

The foundation of any reduction programme is the ability to measure savings, not just in pounds and pence but in watts and cubic metres. Basically, you need a starting point to understand the effectiveness of your gains. So an audit is your first priority and once the data has been analysed, you can start to plot a way forward. Measuring energy does not save a penny; it is identifying the issues and taking action consistently and over time which results in savings.

Often it can be the simplest of changes which can have the biggest impact or a number of marginal improvements which deliver a dramatic effect overall. Overhauling your energy usage and implementing a structured energy management programme which is continually monitored, measured and findings acted upon is likely to net the biggest savings.

There’s a range of tools on the market which enables effective monitoring and provides the data companies need in order to identify where wastage occurs thereby highlighting where making changes will be most effective.

One of the tools utilised by our energy consultancy team from an extensive suite of smart technologies (there are several so you need to be sure the ones you choose reflect your individual energy usage and requirements) is our product Smart Billing. Developed by Measure My Energy and recently adopted by us, their stats and case studies are illuminating. One retail chain found its staff often used both the heating and air conditioning at the same time which meant both were working against each other using more energy, simply switching one off whilst using the other saved more than 40% in energy costs across their stores. Further evaluation at a later date found bad habits had returned at some stores as a high turnover of staff meant new incumbents were often not told of the energy saving procedures.

One of our team visited a school the other week and its classrooms overlooked a south-facing courtyard, effectively a sun trap. It meant the school’s air conditioning was working overtime to compensate when a simple solar film solution on the windows was all that was needed to deflect the heat. In most businesses, we typically find enough low hanging fruit to make an immediate difference.

Of course, for those of us in the energy consultancy business, spotting the discrepancies which contribute to energy wastage and higher bills is like spotting a Man United fan in the Chelsea end – the red in sea of blue. But for everyone else, it’s like looking for a needle in a haystack or worse – trying to find something in the haystack but you’re not sure what, a bit like trying to find the clean clothes in my son’s bedroom!

Other solutions can be driven by the business itself, such as the profitability of selling ice cream including the cost of refrigeration and returns from a seasonal product compared to say, sausage rolls; it could be cheaper to keep food warm than frozen. Admittedly, that’s a rather crass and simplistic business analysis, but you take my point, energy usage and therefore a company’s ability to consume less could well be determined by the operation itself.

Unfortunately, there is no one size fits all. Every business is different and therein lies the problem, energy reduction becomes so time consuming and ultimately overwhelming that a well intentioned strategy is shelved and we’re back to haggling over the tariff in an attempt to reduce costs.

More than a third (37%) of the UK’s carbon emissions come from buildings (with non-domestic buildings making up 60% of the total) equating to around 200 million tonnes of CO2 which is about the same as the annual emissions from the United Arab Emirates or those of Greece and Chile combined, according to the Carbon Trust. So, there’s a huge amount of saving in terms of costs and usage to be had, 35% is achievable by 2020 through cost effective measures, the Carbon Trust estimates, delivering £4 billion to the bottom line for UK Plc. The organisation maintains CO2 reductions of 75% are feasible by 2050 at no net cost to the economy.

In a nutshell, smart technology and effective energy management is the winning formula and companies can always outsource which will pay dividends in the long run.

Picture: Ken Warner, MD, Energy Renewals

 

 

Article written by Ken Warner | Published 06 October 2016

Share


Related Articles

Mercury Rising, Straw Dogs, Hot Fuzz, Top Guns, The Crown & Vikings

We've got an FM Digest so good you'd almost want to make a movie out of it. Mercury have taken the Almac contract; Elior are eliminating plastic straws; Tenon are...

 Read Full Article
Skanska Wins Contract for 20 Ropemaker Street

Skanska has won a £240 million contract to construct 20 Ropemaker Street in Central London for Great Elm Assets Limited, in association with Old Park Lane...

 Read Full Article
X Marks The Spot Of The Tallest Tower In Town

The City of London Corporation has approved 1 Undershaft - AKA The Trellis - which will be the second tallest building in the Capital after The Shard and thus the second...

 Read Full Article
Airline Company Guilty For Unsafe Operation of Passenger Lift

Flybe, the airline company, was sentenced on 4 February 2020 for the unsafe operation of a passenger lift. Meanwhile, a number of other firms have found themselves...

 Read Full Article
A Top Ten Guide To Making Your Venue More Accessible

Eight venues have received awards from the disabled access charity Euan’s Guide for their work welcoming disabled visitors – and this prompted ThisWeekinFM to...

 Read Full Article
Tackling The People Challenge Through Technology

Report - CBRE and ThisWeekinFM recently lead a delegation of experts to provide a briefing on technology in workplace and real estate strategy. The breakfast briefing...

 Read Full Article
Net Zero Rush-Through Criticised By Lords, Forum Claims

The Global Warming Policy Forum has claimed the House of Lords has rebuked the Government for rushing through a commitment to a Net Zero economy. The Forum refutes the...

 Read Full Article
Holland Match - It's All Gone Gooee Over There

ProptTech history has been made with global M&E firm Croonwolter&dros agreeing to connect the 5,000 commercial buildings it runs in the Netherlands  to the...

 Read Full Article
'IRA' Claim Parcel Bomb Responsibility In Correctly Coded Call

A claim has allegedly been made on behalf of the ‘IRA’ for the parcel bombs that were delivered to premises in the UK - using a recognised codeword. A call...

 Read Full Article
Emcor UK Takes Insurance On TFM Contract

Emcor UK, has been awarded a contract with multinational insurance company RSA Insurance Group which is being described as a total facilities management contract. It will...

 Read Full Article