IET logo
Wiring Matters

Wiring Matters 52 - Autumn 2014

Energy efficiency: achieving sustainability

Bill Wright, Head of Energy Solutions at the Electrical Contractors’ Association, discusses the importance of achieving sustainability through energy efficiency.

Why is it that renewable energy seems to get all the publicity? We continually hear about the latest wind turbines, placed in extreme locations and with the premise being ‘bigger produces more’. Biomass systems are ‘flavour of the month’ as the Renewable Heat Incentive encourages more people to install these systems. PV installations crop up everywhere even though the government can’t seem to decide whether or not it wants them; the original tariff was so good everyone installed them then the tariff was slashed, thereby cutting demand overnight. It has been a start- stop scenario ever since and, although the industry seems to have recently settled down to a reasonable level, confusion still reigns in respect of some larger systems.

What seems to have been lost in this mass of renewable energy systems are everyday energy reduction measures, and energy efficiency. It is both cheaper and better to reduce energy than to build new capacity conventional power systems or subsidised renewable power systems. We, as a nation, use far too much energy, and energy prices are continually in the news - but it appears that the price of energy is not high enough yet to force us to take energy efficiency seriously. Many countries in Europe, such as Denmark, which exports wind energy, pay a far higher price.

Domestically, we still continue to use energy-hungry appliances and run our homes inefficiently.  Commercially, many firms do not take energy usage seriously, often seeing it as a mundane overhead that does not merit senior management attention.  It only takes a stroll through the City of London on a Sunday night to see the number of lights left on in unoccupied offices and hear the A/C systems hum to realise that wasted energy is not even on the ‘to-do’ list.

Yet it is cheaper and more sustainable to reduce energy than to produce it, by whatever means. The government has at last realised this and more policies are being produced that encourage energy reduction rather than energy production. Commercial energy users should realise that energy costs come straight off the bottom line so any reduction in energy boosts profits. The cost of electricity is forecast to potentially double by 2020 so any cost saved now will reap additional benefits in the future. If your energy bill is £500k, which it is for many firms, then saving just 10% (generally easily achieved) will give an additional £50k profit.  By 2020 this profit could double to £100k.

How do we do this?

Energy efficiency is not the rocket science or black art that many suppliers would have you believe. Major savings can be made by a series of small steps, and useful savings can be made at no cost if no initiatives have previously been applied.

  • Do you know what your current energy usage is and what it costs? You would be surprised at the number of firms that do not monitor their energy bills or even understand them. Start by looking at, and noting down, the cost and energy usage per month. Suppliers will provide itemised bills, so these figures are easily available. Allocate a person to do this on a regular basis and build up a picture of what your energy usage is. There is an old energy proverb – ‘you cannot manage what you cannot measure’. How true.
  • If in doubt, turn it off. There are constant cries of “we can’t turn that off- it is essential!”. Look at what lighting is required; do you really need the lights on when the sun is streaming through the windows? Do you really need to keep all the systems on overnight or do you really need to keep your office cooled so it is comfortable to enter first thing in the morning? If in doubt turn it off and see what happens or who complains (obviously taking safety into account).
  • At this point you could carry out a simple energy survey of the building and processes. Take a new look at why those lights are on, why switch this machine or that fan on? Take a deep critical look. Even an untrained person can find many areas of energy wastage.
  • So far, a lot can be achieved at no cost. You will have gauged the amount you spend on energy and had an initial superficial assessment of the potential for savings.  At a small cost, it pays to educate staff on energy basics as they are the ones using it. A simple course on basics can provide major paybacks. If no initiatives have been carried out in the past then savings of around 10% have been made at companies who have educated and incentivised staff to reduce energy usage.
  • Once the easy bits have been identified, deeper surveys can then be carried out to identify further savings. These could be undertaken by in-house engineers or trained energy assessors or by external bodies. Many consultants or contractors provide these services, sometimes as part of other work being carried out on the premises.
  • After the no-cost initiatives come the more engineering based changes, such as the installation of sensors, change to LED luminaires, installation of variable frequency drives for fans and pumps etc.  All of these can be costed and assessed as to whether they are economic. If you are carrying out a survey and have provided costs it pays to find out what the financial requirements are in terms of return on investment. Many companies have fixed terms for payback and an analysis and business case has to be produced for the accountants who will assess how the cost of energy reduction compares to the return on investment in the core business. In many cases it is more cost effective to invest in energy efficiency than into the core business. It is now also increasingly likely that firms come under pressure from shareholders or those with a stake in the company to say how ‘sustainable’ the company is. This will undoubtedly affect the response from the finance departments!
  • As you seek further savings it pays to start monitoring energy usage at more local levels. The suppliers’ meter and any meters at the main incoming switchboard will only give you global consumption. You need to find out where the energy is being used and when. There are an increasing number of easy-to-install meters that can monitor individual circuits. Many systems are now IP addressable, enabling remote monitoring. Once installed, local energy use can be monitored from anywhere in the world, a kind of benign Big Brother. The profiles of energy usage so obtained can give an accurate picture of what is happening and you can hone in on areas of high energy use.

The steps above are all very simple and yet they can have a very high return on investment. There are too many systems for saving energy to go through in a short article, but do the simple, inexpensive things first. You will be surprised at what can be achieved on a small budget. Experiment with switching times and the use of sensors. If the mains voltage is too high and the company has its own transformers, try tapping down the voltage before installing any voltage optimisation measures. When installing a new lighting system use LEDs as first choice. Take advice from specialist engineers. Major savings can be easily achieved.

What is the Government doing?

There are an increasing number of initiatives by the government through the Department of Energy and Climate Change (DECC) and the Department of Environment, Food and Rural Affairs (DEFRA) to encourage consumers to reduce energy. The Carbon Reduction Commitment (CRC) was first introduced to incentivise high-spend users to reduce energy by pricing the carbon they were responsible for.  It was changed dramatically by the Chancellor who decreed that the government would keep the income from the purchase of carbon allowances and the cost of carbon would be part of their budgetary process!  At the initial £12 per ton of carbon it raised the cost of electricity by about 0.6p per unit. However, this is still an incentive as it makes the rate of return of investment potentially better.

The Energy Performance Certificates (EPC) and Display Energy Certificates (DEC) introduced by the Energy Performance of Buildings Directive all have recommendations for the recipient on what measures can be undertaken to reduce the energy use and improve the rating.

There have been recent  Consultation Documents, Private Rented Sector Energy Efficiency Regulations (Non-Domestic) and Private Rented Sector Energy Efficiency Regulations (Domestic), which sought feedback about minimum energy performance standards in the private rented sector. It is proposed that all properties being rented out should reach a set minimum, E, EPC level. If this is not reached, the landlord must bring it up to this minimum level of energy efficiency before it can be let. This could have a profound effect on the private rented sector!

Another initiative is the requirement for all FTSE listed companies to publish their Greenhouse Gas Emissions in their company reports. This forces companies to at least look at their energy usage and carbon emissions.

A very recent addition to this encouragement is the Electricity Demand Reduction auction. This is a £10M pilot auction to encourage companies to reduce their demand (though not necessarily their consumption) at peak times in the winter.

The recently published EU Energy efficiency Directive requires governments to ensure that regular audits are carried out on larger companies’ energy consumption. The Energy Savings Opportunity Scheme (ESOS) is being introduced to meet this requirement. All eligible companies will have to have an energy audit carried out by December 2015 or they may be subject to penalties. Guidelines have recently been published by DECC and companies will have to carry out four-yearly audits. One drawback is that they do not have to implement the findings of the audit. It is hoped that many will see the advantage in carrying out the efficiency recommendations produced in the report.

Finally, the much-maligned and often-ignored ‘Green Deal’ is an attempt to encourage householders to install energy efficient measures that are paid for by a loan that is fixed to the house, not the owner. This has not taken off as was hoped because of a variety of reasons, mainly due to lack of incentives and high interest rates on the loans. A recent incentive scheme that gave additional grants was ‘sold out’ rapidly, showing that incentives can work! The Green Deal has had very limited success with commercial premises, due in some part to the legal complexities.

Energy Efficiency is the first thing that should be carried out before any installation of other power sources. It can easily repay any investment and as we have seen it is far better to reduce energy use than to only look for new ways to produce it.