November 17 Newsletter 8th November 2017
Energy Efficiency: Overcoming The Barriers To Increased Energy Efficiency
Who wouldn’t want to reduce the impact of energy costs on their business? Over the years we have worked with many companies who have embarked on a sustained programme of reducing energy consumption and costs, and have heard some great success stories. Unfortunately we have also seen many of the companies struggle to achieve savings, despite clear and viable energy reduction opportunities being identified. Often the lack of success isn’t down to technical barriers, but commercial barriers.
A report by the Westminster Sustainable Business Forum looked at what these commercial barriers were and separated them into three distinct categories:
• A lack of understanding, awareness and experience of how to increase energy efficiency. It is reported that many companies struggle to collect and interpret data on energy usage or develop solutions.
• Energy efficiency suffers from being disconnected from the strategic targets and aims of the company. This disconnection can lead to some departments (e.g. an Estates department) prioritising energy efficiency but failing to gain wider support.
• In larger companies, communications between departments can cause problems with different areas of the business implementing energy efficiency measures in isolation which can increase disruption and costs unnecessarily.
The perception is also that introducing energy efficiency measures can require upfront capital expenditure to pay for new lighting, motors and drives, boilers etc. Obtaining capital finance is a problem for all business, but particularly for SMEs where investing in energy efficiency may come at the expense of other essential investments. In a survey by nPower, they identified that 60 per cent of SME’s who consider increasing energy efficiency to be important said that they did not have the cash resources to invest.
In reality many companies can achieve significant energy savings by overcoming the commercial barriers and concentrating on the operational and management factors that influence energy use.
Briar Associates offer our clients a fully holistic solution that includes energy procurement and management, forensic bill analyses and reduction in levies, and developing a connected energy reduction programme. The programme is designed to prioritise immediate opportunities prior to developing a medium and long-term commercially viable investment plan to deliver sustained energy reduction.
Current Market Position
Wholesale energy prices were influenced throughout October mainly by French nuclear reactors being taken offline, by oil price rises and the weather.
At the beginning of the month, prices jumped as the French nuclear safety authority announced that 20 nuclear reactors would be taken offline while cooling pipework was upgraded. It was discovered they might not be strong enough to withstand earthquakes, posing a risk to cooling systems. The closures have seen Britain exporting electricity to France for the first time in four years.
Concerns of cuts to oil exports from the Iraqi Kirkuk region due to potential unrest between Kurdish and Iraqi forces also elevated prices.
However, prices started falling mid month largely due to a reduction in gas costs, but also due to reduced concerns surrounding French nuclear plant availability for this winter, as reactors came back online.
The end of October saw high wind levels and along with LNG (Liquified Natural Gas)deliveries helped to keep prices steady.