Derrick Hidden, Group Consultancy Director and Co-founder of Cloudfm, explains how a little focus on energy saving measures can pay the sort of dividends that make a real difference to an organisation’s bottom line.

Energy use is one of the major ongoing costs in the management of a commercial estate. Many businesses often assume that energy costs are fixed, or perhaps more accurately, a cost that will increase year-on-year with inflation. But in fact, they represent a great opportunity to cut spend. Indeed, according to the Carbon Trust, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales in many businesses.

The implementation of environmental taxes, such as the Climate Change Levy, and building and energy regulations present added costs to businesses. However, many suppliers now offer free or subsidised energy saving measures to customers through government-backed schemes to encourage energy efficiency. Tax exemptions are also available for businesses that utilise low carbon technology. The reward of lower energy bills should therefore be enough to persuade the implementation of a strategic programme of energy-saving works.

Whilst understanding energy usage across multiple sites is a challenge, without this insight, there is no way to minimise costs or procure effectively.

LED lighting LED lighting is a good place to start. It’s not only straightforward to convert from fluorescent or incandescent lighting to LED, but the resulting energy savings are significant. It’s worth comparing product properly, rather than just looking at payback periods, because ‘cheap’ doesn’t always equate to ‘best value’. For example, a product with a one-year payback and one-year warranty, might be cost neutral – the savings are cancelled out by the investment, and because of the short warranty it’s possible that the same capital expenditure will be required year after year. In contrast, a higher-quality product with a 10-year warranty, might boast a three-year payback – which sounds less appealing initially, until you realise it could deliver a seven-year period of true savings.

HVAC Maintenance Other measures worth investigating include upgrading (or even just better maintaining) the building’s HVAC system, and optimising business processes and organisation (for example, rather than place two small teams in large spaces, can they share a single area so that the heating and lighting overheads are reduced accordingly?). It also might be worth upgrading the building management system (BMS) to a smart building energy management system (BEMS) – this will optimise energy usage according to demand.


IoT for HVAC energy consumption Smart energy management is also possible when assets are equipped with sensors, connected to the internet. With these in place, they can be monitored for predictive maintenance, picking up on any inefficiencies or anomalies that may affect energy consumption and be economically detrimental. This is achieved by utilising data, based on the current status of the asset. Ultimately, by focusing on the ‘vital signs’ – the running and functioning – of mechanical and electrical systems, it is possible to predict when an asset is experiencing issues. The benefits that businesses can expect are a reduction in maintenance costs, an increase in asset quality and more controlled risk. What’s more, through more intelligent maintenance of its assets, it will not only improve financial sustainability but minimise its carbon footprint also.

Energy consultancy It’s important to retain the services of a consultant who really understands the business in question and will be able to deliver both immediate and long term reductions in true energy costs. They achieve this by ensuring that all potential energy saving measures will be appropriate, result in compliance, and also are presented in a way that is thoroughly business-relevant – for a board to sign off on the expenditure with confidence that it’s the right decision, to the proposals being presented in such a way that makes business sense. An independent expert will also be able to make sure that any potential pitfalls are avoided – such as the wrong lighting levels having a negative impact on productivity, for example – and will take time to plan the right scheme for the business’s needs.

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