Competitive efficiency

Posted on 5 Apr 2014 by Callum Bentley

Wayne Mitchell, director of industrial and commercial sales and marketing at npower explains that staying competitive is all about how you make the most of your energy.

If you are to believe the latest economic forecasts the boom times are – if not quite back – then certainly a lot closer than they have been for years. As the economists keep reminding us, however, growth is tentative and even the smallest adverse breeze could sail us right back into the economic doldrums we have only just left. In this context, the UK’s manufacturing sector, which accounts for around a tenth of the total economy has a huge role to play. If secure growth can be created in this sector then the UK will have a solid foundation on which to build a sustained and powerful recovery. For this to happen however, the manufacturing sector has to be competitive. It is here that energy efficiency will prove crucial.

As one of the biggest industrial users of electricity, there is no escaping the fact that success in the sector is inextricably linked to how well organisations manage their energy requirements. It is a no brainer really – energy efficiency is more than an environmental nice-to-have for manufacturers; it is absolutely fundamental to their profitability.

The good news is that this message finally seems to be making headway, and this can only bode well for the wider competitiveness of the sector.

As part of our on-going dialogue with major UK energy users, npower recently issued a research report, jointly undertaken with EEF, which questioned business leaders at 200 UK manufacturers. With 96 per cent of companies surveyed quoting the reduction in energy bills as a reason for implementing energy management, it is clear from the report that energy efficiency feeds directly into the strategic business decisions made by manufacturers.

Encouragingly, many manufacturers are already alive to the opportunities energy efficiency presents and have started to make important changes. Almost two thirds of manufacturers surveyed have undertaken energy audits, for example, while more than half of manufacturers have adopted lighting efficiency strategies.

With this in mind it is good to see that energy efficiency has made its way to the top of the corporate agenda, with the report revealing that an increasing number of CEOs and managing directors are taking direct control over the energy strategies of their organisations. Energy usage and energy efficiency is no longer a minor operational matter – it is a key strategic lever for business success.

This is not to say that the whole picture is rosy however; there are still some important barriers that need to be overcome if manufacturers are going to be able to better manage their energy. 64% of manufacturers cited extensive payback periods as the main barrier to implementing energy efficiency measures, for example, with others noting their company had limited scope to increase efficiency and that other investments sometimes took greater priority.

Such barriers are not insurmountable however, so long as the energy industry and government can cooperate to get the correct policy framework in place. If such cooperation occurs, then manufacturers will be free to make their energy strategies work for them, helping to reduce costs and ultimately keep manufacturers from leaving the UK for less expensive shores. From the perspective of securing our long termeconomic growth this can only be a good thing.