How to become more energy efficient as a business

With prices already at record levels and set to climb even further in the months ahead, businesses need to do all they possibly can to mitigate against rising energy costs.

While companies are powerless to stop the upward trajectory, drafting and then implementing an energy efficiency strategy is one way they can help tackle the crisis.

Wastefulness is not something most companies can afford in the present climate so targeting a reduction in energy consumption should be high up the business agenda.

To able to reduce consumption, first businesses need to understand when and where they are using energy.

Energy Management has bespoke software that enables us to assess the energy performance of a business across its asset base.

Clients of Energy Management can also benefit from the use of our energy management portal, EM-Powered, which has a wide range of features that enable on-site energy managers and facilities managers to keep track of costs.

Once the data has been gathered and analysed, informed decisions can then be made about where savings can be made.

This may result in equipment upgrades or relatively low-scale investment in timer switches for lights or the installation of longer-lasting LED lightbulbs.

Encouraging behavioural change amongst employees is key to the success of an energy efficiency strategy.

Most money-conscious employees wouldn’t leave lights on unnecessarily or not properly shut down their electrical devices but gentle reminders from an appointed, in-house ‘energy champion’ never do any harm.

Alternatively, you could turn to an external energy agency to conduct an energy audit and determine how you can use less power without compromising business throughput, output or thermal comfort and wellbeing of staff.

Here’s a summary of the steps you can take:

  • Get an energy audit

Air leaks and issues around boilers and insulation will be identified along with any energy-saving opportunities.

  • Purchase energy-efficient equipment

Check the energy star rating of appliances and, where applicable, replace with more energy efficient models

  • Reduce peak demand

Try to stagger working hours to spread the load and bring energy consumption down during periods when it is typically at its highest.

  • Lighting

LED lightbulbs and timer switches that turn off the lights when not in use are simple measures that don’t have to break the budget

  • Heating

Check to see if the boiler that supplies heating to the building is serviced and well-maintained.

Install thermostats so that rooms are only being heated when they need to be.

  • Switch off idle devices

A great office energy-saving tip is to have your computer add-ons (printers, monitors, etc.) connected to power strips so that the flip of a single switch can shut down several devices at a time.

  • Office redesign

A simple redesign of the layout of your office may result in more natural sunlight entering the building and, therefore, reduce the need for artificial light. Greater exposure to natural sunlight is also known to improve the well-being of staff.

  • Home working

By offering employees the option of working from home, you are not only giving them flexibility in their work/life balance but also offset energy costs from the office.

  • Natural protection

Planting trees in strategic places around the outside of the building will provide shade from the sun and act as wind breaks during the winter months and can help reduce the demand for air conditioning and heating.

  • Cultural change

Appointing an ‘energy champion’ to advocate energy efficiency throughout an organisation and encourage their co-workers to adopt ‘cleaner’ practices in and outside of the workplace is one way of encouraging behavioural change.

Market knowledge invaluable in energy procurement decision making

At Energy Management Ltd, we believe that expert guidance and support are more important than ever before in the ever-changing energy markets.

Our years of industry experience allied to the best market-tracking software and analysis tools enable us to provide invaluable insight into the drivers that impact oil, gas and electricity prices.

Understanding those factors is key to implementing a well-informed energy procurement strategy that is individually tailored to your own specific business needs.

After a big spike in the early part of March, gas and electricity prices have remained fairly stable over the last two months but an upward trend can easily reoccur due to largely uncontrollable factors.

LNG fleet grounded

As we reach the middle part of the year, the drivers behind energy price rises remain as variable and unpredictable as ever.

Only last week, damage to the Freeport LNG Terminal in the United States caused by an explosion and subsequent fire in the plant shook the European markets as it accounts for 20 per cent of LNG gas processing.

Growing dependency on LNG deliveries from the US means the longer this goes on, the twitchier the markets will become.

The latest estimates suggest a three-week downtime period. Normally in that time, 13-15 LNG vessels would deliver LNG supplies, so not an insignificant amount, and it goes without saying, the markets will be keeping a keen eye on that situation in the weeks ahead.

Storage target under lock and key

Meanwhile, the EU has passed the 50 per cent gas storage landmark ahead of forecast. At that replenishment rate, the 80 per cent target rate will be met well ahead of the November deadline, possibly September.

On that note, a formal application has been submitted by Centrica to reopen the Rough Storage facility in the North Sea five years after its closure. A bearish or bullish response will be triggered depending on the outcome.

The COVID-19 lockdown situation in China, one of the world’s biggest energy-consuming countries, is always a keen area of focus as prices rise and retract depending on whether restrictions are being rolled back or reimposed.

Also, the gas maintenance season is now into its stride but activity appears to be at the lower end of the scale at present.

Read more on how our Energy Procurement expertise enable us to get the best energy deal for your business.

Long-term success is built on exemplary customer service

At Energy Management, ensuring the highest possible standards of customer service is critically important to us and explains why our client retention rate is so high.

So it is always pleasing to hear that what we do is validated by our clients, many of whom have been with us for years, some from the very outset of the company when energy management was in its embryonic stages as an industry.

Read our Howard Tenens Case Study

Whether it’s energy procurement, invoice validation, legislation and compliance, ESOS Phase 3 or SECR, or any other services in our energy management portfolio, the same exacting standards apply in terms of customer service.

Each client has a dedicated and highly knowledgeable account manager on hand to deal with any concerns and queries, to ensure they are in safe hands.

We always make it our mission to get the right business energy procurement deal for clients, not what’s best for us as a consultancy, and go the extra mile to deliver on that.

As well as the human touch, Energy Management clients benefit from having access to our bespoke energy management portal, which arms energy managers and facilities managers with accurate, almost-live data to make informed decisions around energy management strategy.

EM-Powered has been universally praised for its functionality and the array of features that add real value to the relationship between ourselves and our clients.

David English, commercial director of the leading records management company, Restore until his recent retirement, is a big advocate of the portal.

“I’m delighted with what Energy Management does, they are good honest people to work with, and the portal has just added even more value to our relationship,” he said during his time with the company.

EM-Powered – a tool to help you take back control of your business energy costs

EM-Powered - Monthly Consumption

In the four years it has been fully operational, Energy Management’s bespoke energy management portal, EM-Powered has become an invaluable tool for companies with regard to their energy procurement strategy.

With the business energy markets as high as they currently are forming a sound energy procurement strategy is more challenging than ever but one thing companies can do is ensure they know exactly how much energy they are consuming and when are the peak times.

EM-Powered collects and aggregates live data to allow end-users to monitor and analyse their business energy consumption to a very high degree of accuracy, which in turn is massively beneficial when it comes to budgeting.

Put simply, EM-Powered gives control back to its users at a time when energy markets are extremely bullish in their behaviour.

Focusing on consumption rather than energy procurement at such times is crucial because, as the time-worn phrase goes, the cheapest unit of energy is the one that is never used. Knowing how much energy is being consumed, and when and where, is key to that energy procurement strategy.

Amongst the many add-on benefits listed here, an alarm system has been built into EM-Powered to help customers avoid exceeding their Excess Capacity Allowance and potentially fall foul of punitive penalty charges.

As well as energy reporting, EM-Powered speeds up the reporting process in other areas such as the Carbon Reduction Commitment (CRC), where the savings being made can be monitored regularly rather than waiting for the traditional annual report.

For further information on EM-Powered and how it may help your business, please get in touch with Ian Scattergood is@energymanagementltd.com or call: 01225-867722.

Energy procurement in the NHS

IAN SCATTERGOOD, BUSINESS DEVELOPMENT MANAGER – HEALTHCARE FOR THE ZENERGI GROUP, GIVES AN INSIGHT INTO THE ENERGY CRISIS AND THE IMPACT ON THE NHS

Energy procurement within the NHS is complex, with many different risk strategies. The majority of NHS sites in England will be covered by the requirements of the Public Contracts Regulations, meaning they have to conduct an open tender or become part of a procurement framework – the latter being the more likely.

The relatively low wholesale cost over the last 4-5 years (with the occasional blip) hit multi-year lows in the spring of 2020 and from the autumn of 2020 wholesale costs began to rise.

From the start of April 2021 to today the wholesale cost of gas has increased by 241% and power 184% (year ahead prices) so regardless of the procurement strategy employed by each NHS Trust in England the impact will be felt, either now as they forward hedge or as they look to renew a fixed-term contract.

The majority of the invoiced cost of gas is the gas itself, whilst power has many other non-energy charges applied. At the beginning of 2021, the non-energy charges equated to about 60% of the overall cost (environmental levies, transmission, distribution charges etc.) but that balance has now swung the other way.

Carbon Costs – whether EU ETS or since last year UK ETS has also seen the carbon cost rocket, and this cost will be passed on to the end-user.

Weather can play a big part in the energy requirements and the long cold winter of 2020/21 will have seen an increase in comfort heating requirements. A long hot summer switches that demand to comfort cooling.

With an estimated spend of over £630 million for the 2020/21 financial year, it’s easy to see how much of an impact even a small change to the wholesale cost will have.

However, the increased invoice price of power now makes the cost-benefit analysis of installing renewable generation much more attractive. Power Purchase Agreements are becoming more commonplace across sites within NHS England, and it is likely we will see this accelerating over the next few years.

NHS has committed to being Net-Zero by 2040 and has spent over £50 million installing LED lighting, which when expanded over the entire NHS would save over £3 billion over the next 30 years.”

Keep ahead of the game with our Market Intelligence energy bulletin

After a year unlike any other, forecasting business energy prices has become something of a lottery for anyone other than the best-informed analysts in the market.

At Energy Management we have a team of highly-skilled and experienced energy consultants to assist customers in determining the length and type of energy contract that is best for their business.

In the last 12 months, it has all been about peaks not troughs with prices for gas and electricity at levels previously unseen.

And while the business energy markets are as volatile as they have ever been, having that personal experience and insight, as well as bespoke market analysis software, enables us to keep customers as well informed as they can be.

Having as much insight as possible into the way different factors may lead to bullish or bearish runs in the business energy price markets is essential to good energy procurement, which is why we pool those resources together to produce a free to download Market Intelligence monthly bulletin.

Available in PDF format, Market Intelligence helpfully breaks down the trends in the Gas, Oil and Electricity markets, whist giving updates on significant changes in areas such as legislation and compliance and information about Third-Party Costs (TPCs).

If you are a business owner or energy manager and want to feel more empowered in the energy procurement decision-making process, you can download Market Intelligence or have it delivered to your inbox for free.

How we help customers through the energy procurement process

Business energy markets are volatile at the best of times due to the plethora of factors that can drive up prices, and pretty much all of them are outside of a company’s control. But everyone working inside the energy industry would agree that the present UK business energy market is unlike anything we’ve seen before, certainly since the 1970s.

With prices rocketing to unprecedented levels and forecasts that they will climb again next year, getting the best energy price has never been more important for the financial wellbeing of any company, but even more so when it comes to energy-intensive companies.  

Energy procurement can be a complicated process, especially in the fast-moving environment currently being experienced. So it may be that you, as a company owner, managing director or facilities manager, decide to outsource energy procurement to a specialist energy consultancy.

If you choose to go down this route, what can you expect? We cannot speak for other companies but, at Energy Management, years of experience, high levels of customer satisfaction and business energy market-tracking software support are guaranteed.

Here’s a brief summary of what happens when you entrust your energy procurement needs with us …

  • Key Account Manager appointed

Having a dedicated point of contact is vital to ensure customer satisfaction. We all know the frustrations that interacting with a faceless company can bring – if you can get hold of them in the first place!

Our Key Account Managers all come with vast experience and are dedicated to serving your best interests. Each customer is unique so our solution will be tailor-made to their needs.

  • Two-way information exchange

It’s a simple statement but true, that you cannot make savings on your energy bills until you properly understand what it is you’re paying for, and how much.

Having all the facts and correct data to hand is vital in this. We’d need to establish the following information from customers:

– How much energy do you use per year?

– Is a dual fuel contract required?

– How many supplies are needed?

– When is the renewal date and do contracts renew at different times?

– Are the contracts fixed, flexible or something else (basket, energy-only for example)?

– What’s your attitude to risk – do you look for long term budget stability or are you more inclined to track the market?

– What’s your current energy procurement strategy – energy broker, energy consultant or in-house?

– If you use a broker or consultant, how do you pay and have you already issued termination?

  • Letter of Authority

Having a letter of authority from you enables us to contact suppliers to obtain prices. Ideally, we’d also require a recent invoice for each supply. This allows us to check we have the right information and also use the existing contract rates to provide a comparison.

  • Tender process

Once all the necessary information is to hand, we raise the tender to multiple suppliers (including the incumbent normally). This can take 10-15 working days.

  • Contract decision time

On receiving the various offers, we present you with an easy-to-view analysis sheet. This shows the average p/kWh and total cost, compared to an existing contract. Options for different durations are also provided together with current business energy market conditions, to help with the decision-making process.

You choose the supplier and duration combination that best matches your unique requirements and a signable offer is then provided. We conduct thorough checks before sending the offer to you, to ensure what you’ve signed is what was tendered.

  • Closing stages

Once the documents are signed by you and returned to the supplier, they will then confirm the contract is locked in.

This triggers an email to acknowledge this, and once that is done, prices are entered into our system for invoice validation.

Our team would also check with a new supplier that the contract has successfully started.

Once the contract has started, our commitment to you does not stop. Your Key Account Manager will always be available for dialogue about market conditions, and to assist you with any queries you have around energy procurement and energy savings opportunities.

With a client retention rate of over 95 per cent, our formula clearly works.

If you would like to discuss your energy procurement needs with us, please call one of our highly-skilled consultants on 01225-867722

Become EM-Powered in the face of energy price rises

EM-Powered - Monthly Consumption

With industry experts warning that the recent surge in energy prices might be a sign of things to come, it is more important than ever for businesses to manage their energy costs more effectively.

Proactive energy procurement and the introduction of energy efficiency measures are two ways of tackling the problem of rising energy costs but, first, companies need to fully understand their energy consumption behaviour.

A reliable way of doing this is through the use of an energy management portal, such as our own bespoke software, EM-Powered.

With its ability to collect and aggregate live energy data, EM-Powered enables users to quickly put an estimated cost against energy consumption, making it an invaluable asset at times when the market is shifting so quickly.

Also, EM-Powered enables facilities managers and business owners a better understanding of which times and which areas of the operational side of their business use the most energy, enabling them to identify potential savings areas.

Reporting these findings to a wider audience could not be easier, either, as PDF documents with all the necessary information can be downloaded in PDF format and tailored to the user’s needs.

Given a five-star rating by one of our long-established clients, Restore, EM-Powered is available to all Energy Management customers.

How did the energy crisis come about?

With colder weather now arriving it’s easy to think that the energy crisis will get worse before it gets any better.

The demand for more heating in homes and offices will only put supply under more pressure and continue to push prices in an upward trajectory.

Gas prices in the UK have more than quadrupled over the last year to highs of 180 pence per therm, from around 40p/therm this time last year. In the last month alone, prices have climbed by 70 per cent.

But how did we get into this position in the first place?

Low storage volumes, disappointing Russian flows, North Sea glitches and limited LNG deliveries in the face of still-rising Asian prices alongside tightening coal markets, have all been contributory factors.

Rough decision

The decision to permanently close the U.K’s largest offshore storage facility, Rough, in the summer of 2017 deprived the country of 70 per cent of its total gas storage capacity and increased the dependence on imported gas by pipeline from Norway and Russia, or by LNG from the US and Qatar.

The slow boat to China

With China’s economy bouncing back as the country emerges from the after-effects of COVID-19, there has been record demand for gas to keep machinery running and the lights on.

To satisfy this, China’s imports of gas via super-chilled tankers were expected to surge by almost a fifth, meaning fewer shipments travelling to Europe from countries such as Qatar.

Russian gas roulette

Russia’s state-backed gas company, Gazprom, has refused to increase its exports to Europe, to help meet the high demand – despite record-high prices across the continent – in what is seen as a strategic move by Vladimir Putin.

Adding fuel to the fire

A large fire at the interconnector site, near Ashford in Kent, has severely impacted on electricity imports from the sub-sea cable that runs between France and Britain.

The IFA1 interconnector has been used to import electricity from France, to support the UK grid, since 1986. It was only operating at half capacity at the time of the fire because of planned maintenance work and is expected to continue to run at reduced capacity until the end of March due to this latest incident.

The energy mix

A more diversified energy mix mitigates against supply issues because there are more options to get around the problem. Countries that have prioritised domestic low-carbon energy are less prone to risk and able to ride out the storm easier.

But low wind output and a lack of investment in other forms of renewable energy, as some see it, means there isn’t enough green energy being produced in the U.K to meet demand without firing up environmentally damaging, fossil fuel-burning power stations or importing energy from abroad.

… but it’s not all bad news.

On 1 October, commercial electricity will start to flow on the 450-mile North Sea Link, the world’s longest sub-sea power cable, connecting British and Nordic power markets for the first time.

Supply will initially be limited to about half of its 1,400-megawatt capacity, with plans to gradually increase to full output by the start of next year.

Russian policy prompts energy supply crisis fears

Energy Procurement and Management

Daily Telegraph report warns of potential gas shortfalls in the UK if a ‘perfect storm’ materialises.

Depleted gas storage capacity combined with a host of other factors could result in factories being forced to shorten their working week due to power shortages. That is the potential doomsday scenario highlighted by a report in The Daily Telegraph.

In the report, Marco Alverà, chief executive of the Italian pipeline and infrastructure group SNAM, says the UK government may live to regret the decision not to fund the refurbishing cost of the UK’s biggest gas storage site at Rough on the Yorkshire coast.

Centrica subsequently shut down the facility which accounted for 70% of the UK’s gas storage in the summer of 2017, leaving Britain more dependent on imports and exposed to price spikes.

“The country is blessed with the geology of the North Sea but it hasn’t used those advantages, and now it has to rely on German and Dutch storage,” Mr Alverà said.

Russia president Vladimir Putin’s strategy of restricting the seasonal flows of pipeline gas into Europe for his own political gain has added to the sense of uneasiness.

“The UK is more vulnerable to a gas supply crisis than other Western European countries. It has way too little storage and it is buying more Russian gas than it realises through the Netherlands,” added Mr Alverà.

Energy procurement

With coal being phased out in the drive towards net zero carbon, gas has become the predominant source of energy for power plants. Gas prices have gone through the roof and the balancing act of energy procurement has arguably never been trickier.

The crunch has been compounded by voracious demand for liquefied natural gas (LNG) in Asia, the report states, along with a host of complications in the global gas industry linked to Covid. “The storage situation in Europe has turned increasingly dire, with winter quickly approaching,” said Francisco Blanch, chief energy strategist at Bank of America.

Should the UK be hit by another Beast from East cold weather blast and heating demand goes up as a result, added pressure would be placed on the UK’s diminished storage and it is likely prices that are already at record levels will continue to climb.

Buying in gas may become so expensive that businesses will have to reconsider how they operate. Also, this year’s disrupted shipping market may mean that shipments do not arrive in time to meet demand in the coldest months.

Gas and electricity interconnectors with mainland Europe could meet the demand but these too have become politicised post-Brexit and supply through this network of pipes is not as straightforward as once was. Other countries could be prioritised over the UK, for example, if there is an energy shortfall elsewhere on the continent.

While the report concludes by saying that a three-day working week is unlikely, it does highlight the myriad of factors that can affect supply and subsequently the energy price markets.

By signing up to our free Market Intelligence monthly bulletin (at the bottom of the page), you will be able to keep abreast of all the geopolitical and meteorological factors that influence business energy prices and subsequently your energy procurement strategy.