Published: 21 Dec 2011
Last Updated: 09 Oct 2013
Energy prices have hit every business where it hurts this year, and climate change secretary Chris Huhne said in September he reckons bills for corporate customers will rise by up to 20% by the end of the decade. What’s even more depressing is that pundits believe he might be under-estimating.
We asked Mark Alston, general manager, Ener-G procurement for his energy pain relief remedies.
1. Strategic planning
Have an energy and carbon strategy that focuses on how your business will reduce CO2 emissions and improve energy efficiency in the short, medium and long terms.
2. Think ahead
Set financial plans based on 15% plus year-on-year increases in power unit costs through to 2020. Prices increased by about 20% in 2011 and could double by 2020. Energy efficiency should be a high priority, otherwise the impact on your bottom line could be substantial.
3. Shop around
Develop a robust procurement strategy for your business to buy at the best possible price. Consider which contract suits your business, whether it's a fixed, flexible or multi-site agreement, or a flexible capped-price product. The wholesale energy marketplace is very volatile and energy prices constantly rise and fall. This presents opportunities to buy when prices dip, but equally a substantial risk of paying a premium during a peak, especially if purchasing is left until the last minute and falls within the months leading up to the April or October contract renewal buying periods.
4. Stay alert
Ensure financial plans are based on the most up to-date information. Knowing how you use your energy is key to saving it. Smart meters provide frequent and accurate energy consumption data. Automatic monitoring and targeting (aM&T) software can collate, analyse and transform this data into meaningful information, allowing you to monitor energy consumption, identify waste, highlight areas for improvement and benchmark your consumption against other similar buildings or organisations.
5. Audit much?
Conduct an energy audit to examine where unnecessary consumption is taking place. This should cover the basics (heating, ventilation and air conditioning systems; boilers; lighting; electrical usage and control), as well as the building fabric, including insulation and repair. Then provide a costed implementation plan to indentify the best returns on investment. Look out for ways to shift necessary power consumption away from peak priced periods.
6. Switch off
The best way to reduce costs is to avoid consuming energy in the first place. With the advent of the Green Deal and the availability of Enhanced Capital Allowances, energy saving technologies are even more attractive.
7. Get staff involved
Involve your people in saving energy. This is one of the most cost effective measures for optimising energy consumption. Engage cross-departmental teams to challenge existing processes, behaviours and infrastructure and identify and evaluate opportunities to rapidly improve energy performance.
8. Be careful
Don't get locked into expensive 'out of contract' electricity tariffs. Many businesses fail to meet the deadline for serving notice on their energy contract - resulting in paying up to 50% more for as long as 12 months. Link in to a contract renewal reminder service and consider your options well in advance of your contract end date to provide ample time to research the market and find the most competitive contract.
9. Check, check, check
Check your utility bills for errors. Utility invoices are well known for containing inaccurate data, due to estimated billing, meter faults and the incorrect application of tariffs.
10. Make your own
On-site generation can provide some cost certainty and protection from volatile market rates. The new Renewable Heat Incentive and Feed in Tariff can make microgeneration an attractive option. A guaranteed, tax-free, index linked payment is worth serious consideration.
- ENER-G designs, develops, operates and finances energy efficient, sustainable and renewable solutions on a business-to-business basis globally.
We asked Mark Alston, general manager, Ener-G procurement for his energy pain relief remedies.
1. Strategic planning
Have an energy and carbon strategy that focuses on how your business will reduce CO2 emissions and improve energy efficiency in the short, medium and long terms.
2. Think ahead
Set financial plans based on 15% plus year-on-year increases in power unit costs through to 2020. Prices increased by about 20% in 2011 and could double by 2020. Energy efficiency should be a high priority, otherwise the impact on your bottom line could be substantial.
3. Shop around
Develop a robust procurement strategy for your business to buy at the best possible price. Consider which contract suits your business, whether it's a fixed, flexible or multi-site agreement, or a flexible capped-price product. The wholesale energy marketplace is very volatile and energy prices constantly rise and fall. This presents opportunities to buy when prices dip, but equally a substantial risk of paying a premium during a peak, especially if purchasing is left until the last minute and falls within the months leading up to the April or October contract renewal buying periods.
4. Stay alert
Ensure financial plans are based on the most up to-date information. Knowing how you use your energy is key to saving it. Smart meters provide frequent and accurate energy consumption data. Automatic monitoring and targeting (aM&T) software can collate, analyse and transform this data into meaningful information, allowing you to monitor energy consumption, identify waste, highlight areas for improvement and benchmark your consumption against other similar buildings or organisations.
5. Audit much?
Conduct an energy audit to examine where unnecessary consumption is taking place. This should cover the basics (heating, ventilation and air conditioning systems; boilers; lighting; electrical usage and control), as well as the building fabric, including insulation and repair. Then provide a costed implementation plan to indentify the best returns on investment. Look out for ways to shift necessary power consumption away from peak priced periods.
6. Switch off
The best way to reduce costs is to avoid consuming energy in the first place. With the advent of the Green Deal and the availability of Enhanced Capital Allowances, energy saving technologies are even more attractive.
7. Get staff involved
Involve your people in saving energy. This is one of the most cost effective measures for optimising energy consumption. Engage cross-departmental teams to challenge existing processes, behaviours and infrastructure and identify and evaluate opportunities to rapidly improve energy performance.
8. Be careful
Don't get locked into expensive 'out of contract' electricity tariffs. Many businesses fail to meet the deadline for serving notice on their energy contract - resulting in paying up to 50% more for as long as 12 months. Link in to a contract renewal reminder service and consider your options well in advance of your contract end date to provide ample time to research the market and find the most competitive contract.
9. Check, check, check
Check your utility bills for errors. Utility invoices are well known for containing inaccurate data, due to estimated billing, meter faults and the incorrect application of tariffs.
10. Make your own
On-site generation can provide some cost certainty and protection from volatile market rates. The new Renewable Heat Incentive and Feed in Tariff can make microgeneration an attractive option. A guaranteed, tax-free, index linked payment is worth serious consideration.
- ENER-G designs, develops, operates and finances energy efficient, sustainable and renewable solutions on a business-to-business basis globally.
