ENERGY MANAGEMENT
ENERGY EFFICIENCY: The Unta A recent report by Carbon Connect
highlights how private sector investment in energy efficient buildings can help secure a low-carbon future for the UK.
With government support, UK businesses can save money, save carbon and safeguard UK fuel-security says Tommy Moody, Manager, Carbon Connect.
THE UK’S ENERGY FUTURE
The need to reduce our energy usage, as a nation, is paramount. The UK faces a challenging future with many existing power stations shortly due to close and the national grid in need of an upgrade. Until now, the recession’s effect on energy consumption has largely masked the inefficiencies of this system. But if the situation fails to improve, power cuts and energy cost increases will be the inevitable result. Lord Teverson, Liberal Democrat peer
and Co-chair of the parliamentary inquiry explained: “At the top of the government’s agenda is energy security. About £200 billion pounds’ worth of investment needs to go into our economy over the next decade, to ensure that the lights stay on and that we remain warm in the UK. Everything that we do in energy efficiency means that that strain, that cost can start to come down. Moreover, we have targets for all of us that we want to meet: 15% renewable energy by 2020 and more importantly, reducing greenhouse gas emissions by some 34% by 2020. These targets can only be met if energy efficiency is a major, major part of that equation.” This represents a major challenge; one that will affect us all. But the private sector can help.
MONEY, MONEY, MONEY What’s more, it’s in the private
sector’s interest to help. Poor energy efficiency is currently costing UK businesses over £6 billion a year. With Ofgem forecasting that energy prices will rise by 40% over the next decade, this situation will only get worse for both small and large businesses in already tight times.
Speaking at the launch of the report, the Rt Hon. Chris Huhne MP, Secretary of
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State for Energy and Climate Change, said: “We want to make sure that energy efficiency (energy saving) is seen as an absolutely key part of our energy policy. The great thing about energy efficiency measures, the vast majority of them, is that they do actually save businesses money”
He continued: “Having been in business myself, I know that it’s about getting your costs down, getting your revenues up and getting your bottom line looking good. I hope [energy efficiency] is taken very, very seriously by boards and finance directors because I’m completely convinced that we can in British business, as we can in the British economy as a whole, pioneer this enormously importantly move towards an energy saving low carbon world”.
THE BUSINESS OPPORTUNITY The case for businesses to invest in more energy efficiency products, services and buildings is a strong one. By adopting strategies to ‘avoid’ and ‘reduce’ emissions, most businesses can start to realise significant financial savings in a relatively short time span. Indeed, recent analysis by the Carbon Trust confirms that energy efficiency projects offer an average internal rate of return (IRR) of 48% and payback within three years. For
example, Premier
Decorations (one of the report’s case studies) were able to
achieve a 74% energy saving through the
use of a specialist lighting scheme in their warehouse in Wrexham. In absolute terms, this translated into savings of £67,000 from their annual energy spend and 271 tonnes of CO2
emissions. Julius Brinkworth, industry expert and
co-chair of the inquiry explained: “UK business simply cannot afford to ignore the financial benefits of being energy efficient in such tight times. By being smarter about how and when we use energy, the private sector can start making sizeable savings within less than a year”. Moreover, investing in energy efficiency can also boost an organisation’s environmental credentials. And of course there are additional benefits tied in with greener buildings, such as better productivity and reduced sickness rates amongst staff.
MAKING IT HAPPEN
But while the arguments for energy efficiency are easy, implementing such change is not. So government needs to help business make the change. Carbon Connect’s report investigated how government and the private sector can work together to make this happen, developing solutions based upon evidence gathered from a six month parliamentary inquiry.
AVOID AND REDUCE To help firms ‘avoid’ and ‘reduce’ energy use in the first place, the government should introduce an Energy Management Hierarchy (see below). By encouraging businesses to ‘avoid’ and ‘reduce’ emissions at source, the hierarchy advocates a more efficient use of resources that will be crucial to meeting national emission reduction targets.
THE ENERGY MANAGEMENT HIERARCHY
The options available for businesses to
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