Whilst researching our latest report with npower on Business Productivity and Energy Efficiency, we spoke to some of the country's leading manufacturers to see how they were managing their energy use. They shared their top tips with us. Here's what they told us:
Embed commitment: Without gaining executive level commitment, most energy programmes will fail to achieve their full potential. Ensure that someone on the board has responsibility for energy. Set appropriate KPIs linked to business performance.
Plan to invest in energy efficiency: Make budgets available for energy-saving projects, as long as they meet standard payback criteria. Ensure capital processes include specific criteria for energy and carbon savings. Make the business case relevant to the top-level audience by linking savings to an equivalent increase in top-line growth, or to another metric that will gain attention. Build in anticipated increases in energy costs and tax relief options. Explore other sources of financial support such as the Green Investment Bank and Green Deal for Business.
Manage energy use at company level: Put in place an energy policy, an energy reduction plan and a quantified list of improvement projects to underpin it. Larger companies should consider following the energy management systems standard ISO 5001. Explore software options that enable sophisticated energy monitoring across the business. Automated monitoring and targeting software (aM&T), which is required under building regulations, is a powerful and cost-effective tool if used correctly: use it to develop customised reports and analysis and to validate savings from Capex investments. Review how you buy energy to ensure you are receiving the best value for money: consider seeking specialist energy procurement advice.
Map your energy usage: Carry out an in-house energy audit to understand how and where energy is used across your business. Install sub-metering and put in place energy performance indicators (KPIs) for all energy-intensive plant. If heat is produced on site, carry out a heat mapping exercise to assess whether any wasted heat can be utilised in other processes or areas within the site or by neighbours. Consider establishing an energy action team which meets monthly to review consumption patterns, to identify and build project proposals and to report to the board.
Manage energy use at site level: Ensure that there is a person responsible for carbon and energy management at each site. Carry out annual leak surveys for your compressed air systems. Carry out regular site energy walks to spot opportunities for improvements. Fresh eyes can spot opportunities that others have inadvertently overlooked, so rotate staff for energy walks. Use aM&T software to help prioritise areas for improvement.
Look again at technology: Routinely consider the whole range of options available to you from compressed air systems, climate controlled factory areas and boiler houses to heat distribution systems, lighting, pumps and motors. Ensure you have access to the right level of expertise. Seek out best practice in your sector, potentially through trade associations, and benchmark your performance against best in class. Plan for improvements during scheduled downtime. Do not ignore larger investments such as more efficient machinery – these might offer substantial payback. Review the business case for previously considered technologies in light of anticipated price rises.
Engage staff: Put in place processes for staff to report energy wastage and improvement ideas and ensure that these are actioned and communicated back. Consider incentives to encourage involvement and energy champions. Carry out an energy awareness campaign or staff training programmes at least every 12 months. Effective programmes use a range of communication tools and media to engage staff. If you have an aM&T system, use it to make your communications timely and relevant. Embed energy efficiency into other relevant staff training programmes.
Reduce grid consumption: Consider generating your own energy. Energy generated by on-site renewable and low carbon generation technologies are exempt from some of the charges and levies that form part of the costs charged by suppliers. In addition, you can sell surplus electricity back to the grid, creating a revenue stream as well as contributing to longer-term carbon reduction initiatives. As well as renewables, explore other technologies such as ground water source heat pumps, biomass boilers and fuel cells. Explore other options such as leasing land to energy generators to operate technologies on site or leasing generating technologies for projects that don't meet standard payback criteria.
Monitor government policy: Stay on top of your legal obligations. Regular energy audits will be a legal requirement for non-SME companies by 2015. Be aware of the range of incentives that government has, or is planning to, put in place to encourage businesses to reduce energy consumption or change the way you use it.
Consider alternative business models: Fully circular or closed loop supply chains help retain value in materials, components and products and could potentially improve energy efficiency. Explore options with your suppliers and customers and consider new strategic alliances and partnerships with other supply chain stakeholders. Challenge designers to think about opportunities for circularity. Selective finance models can remove the need for capital investments whilst providing a positive cash-flow contribution. In some cases, full energy performance contract models may be appropriate.