COMMERCIAL PROFILE:ENERGY HAS BEEN identified as one of the top five outlays for small to medium-sized businesses in Ireland and it is now universally agreed that preventative measures will help businesses cut energy costs, reduce their carbon footprint and increase goodwill from established and prospective clients.
“Significant savings and an attractive rate of return on investment should make energy efficiency a realistic business proposition for companies seeking to cut costs and improve margins,” says Joe Walsh, head of sales at Bord Gáis Energy. “While environmental concerns alone may have driven people to consider energy efficiency in the past, ever increasing energy costs and related carbon taxes are making the business case for it more compelling than ever.”
In a recently published report by the Carbon Trust, research showed that large UK-based businesses are missing out on upwards of €1.6 billion in savings that can be achieved through energy-efficiency measures that realise an average of 15 per cent reduction on their annual energy bills. For many of these large energy users, a 20 per cent decrease in energy spend can often be equivalent to a 5 per cent increase in sales.
“These figures are equally applicable to Irish business,” says Walsh. “Chief financial officers and other business leaders who re-evaluate their expectations of what a viable energy-efficiency programme can deliver for their organisation should be able to unlock significant hidden value within their business. Energy efficiency should be on every boardroom agenda.”
An energy review by the Sustainable Energy Association of Ireland (SEAI) has also found that both small and large businesses could cut energy costs by anywhere between 10 per cent and 20 per cent through simple changes, such as encouraging a change in staff behaviour.
However, despite these attractive returns, businesses often only implement less than half of the energy savings recommendations put to them. Naturally the tendency is to focus on those changes that generate the highest immediate returns while others are put on the back burner. This is despite the fact that the remaining recommendations still fall within many companies’ investment criteria.
“It is vital for companies to create a clear business case for energy-efficient investments in order to see clearly the opportunity available if changes are made,” said Walsh. “Companies also need to move away from the perception that energy has a poor return on investment and is not a material business cost; for many it is one of their top five operating expenditure items.”
However, in many cases companies may have had to postpone the energy- saving measures due to the unavailability of investment capital to finance the projects. An increase in the use of the energy services company (ESCo) model where energy suppliers work in partnership with clients to help deliver energy-saving projects over time is helping to address this issue. This means that companies who do not have the ability to finance the energy-efficiency projects themselves can still gain from the benefits of lower carbon emissions and taxes and ultimately significant lower energy costs.
Walsh also has some practical advice for companies looking for reduced energy costs and the first is to understand the key elements of the final energy bill. Efficient energy management need not be a vicious hair shirt exercise, as low- and zero-cost actions can yield savings of up to 10 per cent – with cuts in energy costs of one-fifth being the equivalent of a 5 per cent increase in sales, he contends. According to Walsh, there are many simple ways to reduce your energy bills, and all depend on being aware of what you’re paying for.
“Acting on the fact that energy prices vary significantly at different times of the day, and that they can also be drastically cheaper at night is key to working towards reducing overall bills,” he says. “Scheduling work at night-time, while inconvenient, is another way of avoiding the peak-time charges.”
Other ways of reducing your energy bills include regular servicing of boilers, and ensuring that heating and air conditioning systems are not running simultaneously. Walsh also highlights that familiar offender: the PC monitor. According to Walsh, leaving a single PC monitor on all day can lead to an energy bill of €80 a year. Switching to standby, or turning off the monitor when not in use, can lead to a saving of 70 per cent.
Walsh suggests becoming acquainted with new meter technology and data in order to improve understanding of the charges. “Know the type of meter,” he emphasises. “Some meters don’t require a read, and transmit data more frequently. Review energy bills and take regular meter readings to stay informed.”
This, he says, allows for comparisons with previous years’ usage, and leads to a better understanding of the seasonal aspect of energy consumption.
He also recommends businesses to work more closely with their energy suppliers. “Having an account manager for your energy expenses is becoming close to essential,” he points out. “Businesses should meet regularly with their assigned account manager to review their spending and learn ways to save on their energy bills. Account managers can assess consumption trends, provide consumption reports, advise on the energy market’s outlook – and generally educate customers about the best practice on consumption.”
The apparent irony of a supply company trying to help customers buy less from them is not lost on Walsh. “For supply companies, the concept of teaching customers to use less is counter-intuitive – at Bord Gáis Energy, we have embraced it,” he says.
