Posts Tagged ‘energy management’

Solar the cheapest form of energy?

A December report by Bloomberg New Energy Finance found that unsubsidised solar is beginning to see lower costs than wind and other forms of energy, becoming one of the cheapest forms of energy. While the lowest solar costs are being seen in countries such India and Chile (where it is now about half the cost of coal), 2017 looks to be the year that solar becomes truly mainstream.

Windy up north

Not to be outdone, wind generated enough power to supply Scotland for four straight days at the end of December (including Christmas day itself), the longest period when wind supply has matched demand.

The strong end to the year resulted in wind power contributing more to the UK supply in 2016 than coal for the first time, 11.5% of total UK output compared to 9.2%.

However, the government’s withdrawal of subsidies for new onshore wind power has resulted in criticism that one of the lowest cost forms of generation is being denied the support given to far more costly technologies including offshore wind and nuclear.

2017 Christmas in the dark?

The British Infrastructure Group has warned that the National Grid’s buffer between supply and demand could fall to as little as 0.1% next winter, resulting in power failures, particularly if there’s unusually severe weather.

At the moment the supply-demand margin is 1.1%, increasing to 6.6% if emergency measures are implemented.

These measures include paying power stations that would otherwise be closed to be kept on stand-by, businesses and other large consumers using emergency generators and old coal-powered stations being put back into operation, all of which add around £30 a year to a residential energy bill.

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The implementation of Ofgem regulation P272 from April 2017 means that around 155,000 electricity supply points will move to half-hourly billing from next April (if not before).

The new ruling affects supply points with Meter Point Administration Number (MPAN) profile classes beginning 05, 06, 07 or 08 (the first 2 digits of the 22-digit supply identification MPAN). Those beginning with 00, 01, 02, 03 and 04 will see no change.

While the intention is to offer these businesses cheaper off-peak electricity and therefore incentivise them to cut consumption at peak periods, it could lead to higher costs for those which have little choice on when they use power (eg schools).

In the short-term those renewing supply contracts for 05-08 supplies should prepare for and understand the changes…

  1. Suppliers are taking different approaches to the change, with some transferring supplies to half-hourly rates within 45 days of a new contract starting, while others are waiting until nearer April 2017. As P272 means new charges apply to your supply it’s important to understand the approach being taken by your supplier.
  2. Supplies renewing in the next few months should receive a non-half hourly (as before) offer, along with a half-hourly price, which means you should be able to compare the change in overall cost.
  3. The principle new cost you’ll see is a capacity charge, which is the maximum electricity you can draw from the grid at any one moment, determined by the local Distribution Network Operator (DNO). The capacity level should reflect your actual demand so needs to be monitored to ensure you’re not paying for something you’re not using.
  4. Half-Hourly supplies also incur Meter Operating (MOP) and Data Collector/Aggregator (DC/DC) charges: the MOP covers the installation and maintenance of the meter, while the DC/DA pays for the collection of meter data and passing it to the supplier. These charges can vary widely, particularly if you’re put onto default contracts, so do shop around for the best options.

Do get in touch to find out more about how P272 could impact your organisation.

A recent npower survey found that 49% of UK manufacturers are unaware of the new Energy Savings Opportunity Scheme (ESOS), while 69% feel uninformed about the scheme’s requirements.

Organisations meeting the ESOS criteria must complete an energy audit by 5 December 2015 or face fines of up to £90,000. The policy is designed to help businesses cut energy use as part of the UK’s commitment to cutting carbon emissions.

While the audit is mandatory, implementing the efficiency recommendations is not, which leaves ESOS at risk of being seen as a costly tick-box exercise, rather than something with the potential to reduce energy consumption at the average business by 20%.

Long-term benefits of ESOS

ESOS will only turn from cost to benefit if the recommendations are implemented, so it’s important to consider your capacity to deliver these recommendations when appointing your ESOS Lead Assessor.

A ‘full service’ Assessor will help to maximise savings through impartial advice on the best solutions tailored to your operational and financial criteria that:

  • improve your bottom-line
  • reduce energy consumption
  • future-proof your business against rising energy costs
  • make premises more comfortable and efficient for your staff and customers

Energy management system

With ESOS now on a 4-yearly cycle it’s also worth establishing an energy management system that makes future compliance straightforward, particularly energy data collection and an asset register that includes key ESOS data.

A robust system means that next time round ESOS can become a stock-taking exercise that measures progress, highlights new opportunities and maintains efficiency momentum, rather than a costly one-off project that has little long-term benefit.

To gain a clear idea of the costs and benefits of ESOS do get in touch.

 

The prospect of winter brown-outs, planned reductions on voltage by the National Grid to avoid full-scale black-outs, has hit the front-pages in the last few days.

While this should ensure that power cuts are avoided, brown-outs have number of side effects including appliances switching on and off, flickering lights and interruptions to internet/wifi. While these might be annoying, they’re pretty harmless.

However, much as some electronics can be damaged by power surges, they can also be affected by power sags. At the first sign of a brown-out, usually flickering lights, it’s therefore time to unplug computers, printers, TVs, charging mobile phones and tablets to avoid damage.

The risk is that some electric motors may respond to a reduction in voltage by drawing more current, which, unless there is excess cooling capacity, may lead to overheating and burnout. Surge protectors can protect against voltage spikes when power is fully restored.

Peak demand times

Peak demand in the UK, not surprisingly, take place between November and February, usually between 5-7pm on Monday to Thursdays when industrial and domestic demands coincide, and it is these periods that are most at risk for brown-outs.

While most businesses may have limited opportunity to cut power demand during these times, it’s worth looking at whether manufacturing processes can be rescheduled, which has the dual benefit of helping to avoid a brown-out, while ensuring that these processes aren’t disrupted if one does take place.

Households can also help avoid brown-outs by not using energy-intensive appliances such appliances such (washing machines, dryers, dishwashers) between 5-7pm in the winter.

One-third of commercial properties could fail to meet new energy efficiency standards being introduced in 2018, making it difficult for landlords to let these properties.

A DECC consultation proposes to make it mandatory for commercial properties with an F or G EPC rating to have efficiency improvements made before they can be let from 2018, which they predict could impact 18% of properties.

However, a recent report by consultants WSP predicts 35% could be affected due to a tightening of EPC scores over time. For instance, a building receiving an E rating today, might receive an F rating by 2018. Such a result would have a significant impact on the landlord’s ability to rent the building, while also impacting its value.

There are two immediate actions that can be taken to mitigate this risk however…

  • ensure that you have an up-to-date and accurate EPC that reflects any improvements, and is not based on old assumptions
  • focus on energy-efficient lighting, which has a positive impact on an EPC rating as well as a strong ROI

Improving the efficiency of a commercial property has other benefits including making them more attractive to potential tenants and improved investment value.

DECC last week released further details of the forthcoming Energy Opportunities Savings Scheme (ESOS), being introduced as part of the EU Energy Efficiency Directive.

The mandatory scheme requires an estimated 7,000 large businesses – those with 250+ employees or turnover of £40 million+ and annual balance sheet greater than £34.4 million – to complete an energy audit every four years. Public sector bodies are exempt.

The audit must…

  1. Measure total energy consumption in buildings, processes and transport
  2. Conduct energy audits to identify cost-effective energy efficiency recommendations
  3. Report compliance to the Environment Agency

While the audit is mandatory, implementing the savings identified will be voluntary, with the government and EU hoping that by identifying cost-effective options companies will be sufficiently incentivised to implement them.

The government estimates that ESOS will have a net benefit of around £1.9 billion between 2015-30, based on a rather pessimistic assumption that only 6% of the identifiable efficiency opportunities will be implemented.

The Carbon Trust, on the other hand, predicts energy savings 2-3 times greater, based on its track record of 40% of simple recommendations with quick payback being adopted.

If businesses don’t implement the savings, particularly those with a good ROI, they’ll continue to pay more than needed for energy, while also paying for an audit from which they fail to benefit.

The first assessment must be completed and notified to the Environment Agency is 5 December 2015. Fines of up to £50,000 can be imposed for failing to carry out an audit. If your organisation is already covered by ISO 50001 then an audit is not required (although the Environment Agency must be informed).

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ESOS is coming: what does it mean for you?

The Energy Savings Opportunity Scheme (ESOS) being developed by the government is beginning to gain some publicity prior to its proposed launch in December 2015, in line with the EU Energy Efficiency Directive.

ESOS will introduce mandatory energy efficiency audits for all large businesses as part of the government’s push to reduce energy consumption and carbon emissions.

Who qualifies? Business with over 250 employees or turnover of over €50 million will be required to conduct an audit. Public sector organisations are exempt, while SMEs can participate voluntarily.

What’s involved? ESOS audits must review total energy consumption and establish an energy intensity measure (eg energy use per employee), as well as identifying and quantifying cost-effective energy savings opportunities. The audits should take place at least every four years, though it’s unlikely there will be penalties for not implementing efficiency measures.

Who does it? Qualified ESOS assessors must carry out the audits – the qualifications required are being established by the government working with the British Standards Institute, who aim to develop a Publicly Available Specification detailing the minimum competences needed.

What’s next? DECC has said it will allow organisations to use already collected energy data under existing schemes (eg the CRC) to be used for ESOS audits, so there’s nothing to lose (and potentially a lot to gain) by continuing or initiating energy efficiency programmes in advance of Dec 2015.

With penalties unlikely for not reducing energy use and intensity, the aim appears to be that companies will act once they see the financial benefits of implementing energy savings measures. In which case there’s no advantage to waiting for ESOS to kick-in before understanding and reducing your energy consumption.

The EU’s new energy efficiency directive, due to come into force in December 2015, requires businesses with over 250 employees or a turnover greater than €50 million to complete an energy efficiency audit at least once every four years.

While compulsory, the directive does not require businesses to actually implement identified savings. The government is therefore expected to announce a new Energy Savings Opportunity Scheme (ESOS) using a standardised assessment process to pinpoint potential efficiency savings.

According to DECC, the new scheme has the potential to deliver economic benefits of £1.9 billion a year, with the average business making annual energy savings of £56,000 from efficiency investments of £15,000. The government hopes that ESOS will encourage businesses to see the EU directive as an opportunity to identify and implement cost-effective measures, while driving investment in the energy efficiency sector.

There’s a clear risk that the EU directive becomes a painful tick box exercise, so anything that simplifies the process of identifying and understanding potential efficiencies is to be welcome. The key will be to providing a framework that makes realistic and robust payback assessments, taking into account unique operating practices and facilities, while also providing financing facilities and incentives to back up government directives and schemes.

 

A UK property management company wanted to cut energy consumption at its headquarters building, so signed up to the Energy & Carbon Management Gold Standard energy services programme which reported monthly on the building’s energy use. The detailed analysis identified consumption trends, peaks, troughs and any variances.

The first E&CM report showed that immediate savings could be made by resetting the building’s internal climate control systems to ensure the heating was on only during office hours when staff were present. It also highlighted how further savings could be realised if staff switched off their computers and other electrical equipment at the end of the day.

The client subsequently rolled out the E&CM energy services programme to its entire UK operations, benefiting their tenants through reduced consumption and lower utility costs. E&CM is now managing the installation of new gas loggers, which should support help identify further savings on gas consumption.

Savings delivered:

  • a 59,000 kwh annual savings on energy consumption
  • a £5,900 annual savings on head office heating costs
  • a 12% reduction in energy consumption after 6pm

5-step energy health check