What is the business case for energy reduction?

By Ben Warden. A 40% cut in energy use by 2030 through efficiency measures would increase the UK’s GDP by £62 billion and create 40,000 new jobs, according to unpublished EU figures.  Hitting a lower target of 30% would create 13,000 jobs and boost the economy by £17.3 billion says a study by independent consultancy Cambridge Econometrics (Guardian Sustainable Business, 2014).

Large UK businesses are paying out more than £1.6 billion too much on their energy bills every year because many are yet to seize the full opportunity to cut bills by around 15% through energy efficiency measures (The Carbon Trust, 2014. These savings are available through changes in behaviour & equipment and represent highly attractive returns on investment. On average, an internal rate of return (IRR) of 48% and payback periods (PBP) of three years are on offer.

Experience shows that even low and no-cost actions can usually reduce energy costs by at least 10% and produce quick returns. For many businesses, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales. This is the reason why globally, over 60% of companies are now taking action to reduce energy use in their operations and many of them are employing staff with direct responsibility for achieving this (The Carbon Trust, 2012).

Energy management

Energy management is the use of a management system to improve the energy performance of an organisation. Successful energy management requires senior management commitment, an energy policy and an effective energy strategy. A complete and effective energy strategy will address the following aspects:

  • Organising roles and responsibilities and ensuring there are sufficient resources available.
  • Compliance with energy and climate change regulations.
  • Investment in projects will be needed to take full advantage of cost effective energy efficiency opportunities.
  • Procurement of buildings, equipment and services should take due account of the implications for energy efficiency and energy related costs.

Simple measures to increase energy efficiency and reduce energy related costs within a business include:

  • When not being used, switch off computers and other appliances
  • Switch lights off where light is already adequate
  • Turn heating down, better control/timing of your heating and avoid draughts.
  • Become aware of how much water you are using
  • Check for dripping taps and leaking pipes
  • Reduce waste
  • Refill printer cartridges instead of buying new ones
  • Office insulation
  • Regular maintenance of air conditioning and refrigeration equipment (avoid leaks)
  • Defrost fridges and freezers regularly

Energy efficiency grants for businesses

Low Carbon Workspaces helps small to medium sized enterprises (SME’S) identify opportunities to reduce energy usage by offering a match funded grant of up to £5,000 to help pay for the installation of energy efficiency solutions. Grants are open to SME’s across the South East of England (excluding London) and potential activities that can be funded by the grant include:

  • Energy efficient lighting (LED’s)
  • Cavity and solid wall insulation
  • Efficient boilers
  • Double glazing
  • Efficient process machinery



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