SUPPLY CHAIN SOLUTIONS LIFE AFTER COVID-19 – TOP 10 CONSIDERATIONS FOR WAREHOUSING FIRMS
6. How does my energy get measured? “What you can’t measure, you can’t manage” is a saying used in business and rarely is it more true in energy. Leading consultancy’s should be able to offer portals giving access to real time energy usage and providing appropriate data in useful and meaningful formats as required.
7. When was the set capacity last reviewed? Your set capacity is best described as paying a fee for reserving the maximum amount of energy a business will need at any given time. Measuring this is important as if its set too high then you are essentially paying for reserving energy that you don’t need, whilst if its set too low then you are likely to be penalised for exceeding it. If you haven’t had your capacity checked in recent times, then it is certainly worth doing so as it is not uncommon to uncover significant savings opportunities.
Andy Grover – CEO Advantage Utilities A
s the post Covid-19 recovery takes shape and realistic hopes of a rapid ‘V’ shaped recovery for the UK economy do currently exist, considerations for businesses across all industries now turn to creating long-term sustainability and profitability. Reducing overheads is of course paramount to achieving both these aims and energy, which for most business falls within the top five areas of expenditure, may represent an excellent opportunity to try and accomplish this goal. Here are some of the key considerations in the current climate:
1. Can I reduce my tariff? With crude oil and consequently wholesale energy markets being at virtually their lowest level for a number of years, now may represent an ideal opportunity to extend out a supply agreement, regardless of current end date and secure a competitive rate, potentially giving long-term budgetary certainty.
2. Fixed or flexible contract? Fixing now offers budgetary certainty however you may also want to consider the advantages that come with a more granular, flexible agreement which may derive further benefit, particularly in the event of a second wave or another event which would cause the wholesale market to decrease again in future.
3. Can I reduce my overall consumption? Clichéd as it sounds, the cheapest unit of energy is the one that isn’t used and advancements in technology over recent years which have seen available measures become more effective, has been matched by an
evolution in financing options which can see savings achieved with zero capital outlay or risk.
4. Can I create my own source of energy on site? With solar expected to be the world’s leading source of energy by 2050 and other options such as Combined Heat and Power units (CHP) available there is every reason to explore off grid supply options. This is particularly true given that these on-site generation measures can also be assessed for the possibility of funding if preferred, the outcome often being significant and immediate savings for zero capital expenditure, risk or ongoing maintenance responsibilities.
5. Can I change my consumption pattern? Whilst reducing overall consumption where possible will of course always be key to reducing cost, a critical non-energy cost element is Distribution Use of System (DUoS) and costs for this are actually dependent on when in the week energy is consumed. At certain peak times DUoS costs are charged at a higher rate (The red band) whilst other usage (In the Amber or Green bandings) is far cheaper. Timings for the various bandings differ slightly between local distributors but around 4-7pm, Monday to Friday are consistently in the red zone and therefore best avoided. Therefore, it is advisable to have an understanding of the various zones operating in your geographical area and if you can reasonably change consumption usage patterns, without disrupting business operations this would derive financial benefit.
32 SEPTEMBER 2020 | FACTORY&HANDLINGSOLUTIONS
8. Could my metering costs be reduced? A meter operator agreement (MOP) is a legal requirement for any supply with a Half Hourly meter profile. These meter types also attract a requirement for Data Collection/Data aggregation (DC/DA) services. In many cases both MOP and DC/ DA these can be negotiated independently at a cheaper rate than that being levied through the existing supplier. Savings of over 30 per cent against the supplier rates are not uncommon.
9. How will forthcoming changes in legislation affect my business? New legislation becomes effective in the coming months including Streamlined Energy Carbon Reporting (SECR) and Targeted Charging Review (TCR). It is always important to receive good advice and/or be well informed as to developments in the industry with a view to maximizing any opportunities or mitigating risk as required.
10. Should I be considering the need to work towards being carbon neutral? The UK Government have set a target for the country to be carbon neutral by 2050. So far 171 major, private enterprises have outlined plans to achieve this and more are expected to follow suit. It therefore seems logical that many of their respective supply chains will eventually be expected to do likewise. When you consider changing consumer expectations and the fact that savings may be achieved as part of the process is now the time to consider embarking on the journey to being carbon neutral?
Advantage Utilities
www.advantageutilities.com
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