Answers to the power problem

Posted on 15 Aug 2011 by The Manufacturer

In recent years, the cost of gas and electricity has risen by extraordinary amounts. Tim Brown looks at some of the solutions.

A recent survey from the Institution of Mechanical Engineers has found that 60% of manufacturers say rising power bills are their biggest fear. So are increasing power costs inevitable or can anything be done to stem the tide?

Fortunately there are ways to reduce costs.

Research by Business Consultants estimates that some 80% of organisations throughout the UK are unaware that they are paying too much for their electricity, gas and water. Many organisations simply do not have the time or specialist expertise to audit their utility bills which results in inaccuracies, mistakes and energy/water wastage. Given though that utility costs are on the rise, it is important that all utility bills are thoroughly checked. Utility costs and consumption should also be tracked on spreadsheets, so that you can quickly spot anomalies in your costs and consumption.

Using smart meters and data loggers, which transmit real-time data to a central computer, you can analyse electricity, gas and water consumption to identify inefficiencies, thereby achieving significant cost reductions and a rapid return on investment. The system can give users early warning of potential problems such as undetected gas or water leaks by highlighting “abnormal” consumption.

Most people wrongly think that the best ways to attain good prices for their energy contracts are to seek plenty of prices and to try to buy in bulk. However, if you go into the energy markets at the wrong time, the difference between all the prices quoted will be a few percent. The keys to successful purchasing of energy contracts are time to market, alternative routes to market and presentation of your consumption data.

The experts monitor energy markets on a daily basis and pay for market intelligence. That is why they will buy energy contracts for their clients near the bottom of the market. In any year wholesale energy prices will fluctuate by about 100%.

The launch of the CRC (Carbon Reduction Commitment) now means that large energy users must purchase carbon credits to offset their carbon emissions. If organisations don’t purchase enough credits they will be taxed for every additional tonne of carbon dioxide produced. There are steep financial penalties for non-compliance in the scheme. Therefore, it is in the best interest of manufacturers to “become greener”.

There are many steps that manufacturers can take to reduce utility costs and consumption. The above only outlines some examples. If you want more expert advice, a utility consultant can be of great assistance.