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Strategic view on energy usage

05 October 2011

Dave Lewis

npower’s Dave Lewis looks at the steps energy providers can take to assist facilities managers in energy management, reducing energy use and satisfying industry-wide legislation.

The role of the energy supplier is evolving as businesses have to consider the total cost of energy as well as meeting internal and industry-wide quotas for usage and emissions. Previously, an energy supplier did just that – supply the necessary energy as the business managed its own procurement risks, legislation and usage.

However, the latest findings from npower’s Business Energy Index (nBEI) report revealed that nearly half of the businesses surveyed (46%) felt they had not received adequate guidance from the government on the CRC since it was implemented in April 2010. A quarter (28%) felt that they needed external advice and support on reducing/managing carbon emissions, with SMEs ranking energy suppliers as their preferred source for this advice.

Clearly, businesses are asking for more information and support, and it is the role of the energy supplier to deliver this advice. npower is one company aiming to add value by advising businesses on how to meet new energy legislation while retaining a competitive edge. This is done through a strategic approach of measurement, monitoring and minimising energy usage.

Regardless of the different energy targets each individual organisation strives to meet, access to accurate and comprehensive data underpins the instigation of an effective energy management strategy. Only by having a full understanding of energy consumption can facilities managers set benchmarks, identify areas for improvement, and prepare the business case enabling the board to ensure it invests in the right areas to achieve energy savings. Organisations which operate across numerous sites often find it difficult to see where areas of inefficiency are present as electricity is measured through one central meter. Accurate data is needed for cost-cutting and for legislative compliance, and can often be achieved by submetering.

Some energy providers will be able to provide the required primary metering and submetering infrastructure for all utilities (gas, power, water, steam etc.) to collect data across and throughout the premises. This data is the basis with which to indicate areas to be targetted for energy-efficient measures, and can also measure the postinstallation success of such measures. If operating a number of similar sites, facilities managers can compare the energy performance of each site against good practice guidelines. Typical examples of simple improvements include upgrading controls, checking set points, and equipment replacement.

In order to correctly analyse and interpret the large volume of interval data that a metering infrastructure provides, it is essential to use a monitoring system to generate information and, as a result, steps can then be taken to control energy consumption and carbon emissions. Building on the data gathered through measurement, facilities managers can use monitoring technology to gain greater insight and therefore control over a building’s energy
usage levels.

Energy management systems allow facilities managers to spot any discrepancies in energy usage, which can highlight problems. This is particularly useful for buildings which are empty for several weeks of the year, as facilities managers can make sure it is kept at the optimum temperature for energy efficiency throughout this time.

An accurate energy monitoring system is also important for companies taking part in the CRC and the European Union Emission Trading System (EU ETS). The CRC League Table will be published in October, providing a ranked list of companies which are acting responsibly and penalising those which have not met their targets. It is essential for companies in the CRC to know what their energy consumption is and to have a plan to reduce it year on year. Using energy monitoring systems, facilities managers can track their carbon consumption against forecasts to ensure they stay within the purchased emissions allowances.

Energy use can be minimised through a number of highly-effective methods, such as in-house training, equipment optimisation, or on-site generation. By implementing one or more of these schemes, not only can a company reduce energy wastage, but such initiatives also encourage employees at all levels to become more aligned to the ideology of cutting energy usage and increasing efficiency.

One of the quickest and most effective ways to improve energy efficiency for any business is to alter the behaviour of employees working in the building. Small actions such as only lighting occupied rooms and using timers and thermostats to regulate heating can produce significant savings. Many organisations find it useful to appoint an ‘energy champion’, who takes responsibility for initiating small-scale efficiency practices, and reminds colleagues of steps they can take to reduce their energy usage.

On a larger scale, some companies may even find that a dedicated energy management team is effective in positively altering the behaviour of staff and at raising issues of energy usage to the board. This energy management team can be part of the internal team, or this task can be outsourced to an external supplier.

As an example npower provides a service called ‘CRC Assist’ service which supports customers in managing their CRC obligations and seeks to integrate energy management into the normal course of business, and at the same time creating value.

Aside from the peace of mind this support provides, using services like CRC Assist also helps ensure the CRC strategy is based not only on compliance, but on long-term goals to integrate energy management to deliver energy savings and carbon reductions. As identified in the nBEI, energy is a big risk for many organisations with 82% asking for more clarity of what is required of them in order to comply with the CRC.

Only by integrating energy management and carbon reduction strategies into all aspects of the business can the risk become more managed – examples of the affected business areas being: capital planning; property selection; maintenance programmes; procurement; working practices and staff training. This integrated approach ensures existing property and utility equipment is working at optimum efficiency, according to the demand or usage.

In addition to minimising energy consumption from existing plant and equipment, organisations can also implement cost effective on-site energy generation projects such as solar photovoltaic (PV), microgeneration or wind turbines.

Generating solar energy is an effective solution for businesses looking to minimise both costs and carbon emissions. Solar PV panels require only daylight - not direct sunlight – to generate electricity, making them incredibly efficient as businesses will often be able to utilise 100% of the electricity they generate during the day, drastically reducing their energy costs and emissions.

The benefit of having solar panels installed by an energy supplier is that they are also able to help with the set-up and management of Feed-in-Tariffs (FITs), and monitor any additional electricity that businesses buy from or sell to the national grid. FITs provide a payment of up to 43.3p for every unit of electricity generated, regardless of whether it is used on site or exported back to the grid.

Energy providers are not only knowledgeable to provide support on issues of procurement, management and generation, but are well placed to do so. With companies facing numerous challenges when it comes to meeting internal targets and industry-wide legislation, subcontracting some of this responsibility enables companies to benefit from the knowledge and experience of an expert, giving them more time to concentrate on their business.

● Dave Lewis is head of business energy services at npower

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