Planning for replacement of infrastructure is frequently undertaken due to the loss of productivity and increased maintenance costs. However, all too often companies put off capital replacement simply due to cost. This mentality is flawed because one very important cost factor has not been taken into account...energy usage. Tim Brown reports.
According to the Carbon Trust, businesses waste more than £3bn every year on energy which could be saved if businesses employed more energy efficient structures, equipment and practices. Enter the Big Business Refit, a Carbon Trust interest free loan scheme aimed at assisting businesses to make infrastructure changes and scrap old power-guzzling equipment in favour of newer and more efficient kit.
The Carbon Trust provides expert guidance and has interest free loans available from £3000 up to £400,000, which can be paid back through the energy savings the new equipment delivers. Three businesses that have taken up the Big Business Refit challenge are Mastmead, Hadleigh Castings, and Precision Engineering Plastics. The three companies differ greatly but each has experienced a considerable benefit from their association with Carbon Trust.
Mastmead: double glazing was the key to saving
Energy efficiency wasn’t an architectural priority in the 1900s, as Mastmead Ltd has discovered. An interestfree Energy Efficiency Loan from the Carbon Trust helped the business install double glazing throughout its 100 year-old building, and reduce its energy bill by over 25%.
The business case
Based in north London with three staff, Mastmead Ltd offers 88 business units for rent as office spaces.
Founded in 1987, the company and its tenants are housed in a building dating from the 1900s, complete with rattling window frames. “The windows were as old as the building,” explains the Manager, Sharon Pines.
“They were in metal frames which didn’t fit, and leaked whenever it rained.”Replacing the windows had been a long-term plan, but until Sharon discovered that the Carbon Trust offered interest-free loans for energy efficiency projects she was unsure how to fund it. The Carbon Trust provided a loan of £53,715, half the cost of installing double glazing throughout the building. Mastmead met the remaining costs itself. Since the installation, the company’s energy bill, originally £65,000-£70,000 a year, has fallen by 28%. Mastmead is on target to save £24,231 a year, which means it will see a return on investment in just over two years.
Double glazing does more than keep the rain out. By reducing the amount of heat lost through windows, Mastmead is able to save on heating bills and prevent wasted energy. “We’ve tried to discourage tenants from using individual heaters, as there are radiators in the rooms, but before we replaced the windows lots of them had their own,” says Sharon. “They don’t need them now – when the windows fit properly and are double glazed the building is warm enough.” By reducing heat loss and therefore eliminating the need for extra heaters in the building, the company should save 138 tonnes of CO2 a year. Mastmead is now considering applying for further Carbon Trust loans to install more efficient lighting and to insulate the roof.
Savings at a glance
Loan amount: £53,715
Payback period: 3 years
Return on investment: 2 years, 2 months
Annual cost savings: £24,231 Annual CO savings: 138 tonnes
Hadleigh Castings Ltd: compressing the carbon footprint
When an air compressor at Hadleigh Castings Ltd had to be replaced, the company turned to for an interestfree Energy Efficiency Loan. Through the assistance of the Carbon Trust to help purchase an energy efficient compressor, Hadleigh Castings now saves over £11,000 a year.
The business case
Based at Hadleigh, near Ipswich, Hadleigh Castings Ltd is an aluminium foundry employing 120 people and serving industries ranging from aerospace to life sciences. The foundry is heavily dependent on a regular supply of high quality compressed air, produced using compressors which consume large amounts of increasingly expensive electricity.
The decision to update the system with a more efficient alternative was made for the company when the largest compressor fell over. With an interest-free loan from the Carbon Trust of £30,000, Hadleigh Castings replaced the fixed speed compressor with a variable speed option, ensuring that energy is not wasted. Installed at the end of 2008, the new compressor is on target to save the company 78.92 tonnes of CO2 a year, reducing the energy bill by £11,330 – based on today’s prices.
Hadleigh Castings previously had six compressors of various sizes, three of which were controlled by specialised software to generate the right amount of compressed air. A certain amount of power was inevitably wasted as the levels could not be altered on individual machines. Three fixed-speed rotary screw air compressors were replaced with one large variable speed machine. The company also held onto several smaller compressors to top up the air supply if necessary. So far these have not been needed, as the single compressor provides all the compressed air required for the foundry, and the supply can be precisely controlled. As well as significantly reducing the amount of electricity used by the company, the new compressor is quieter, will need to be serviced far less frequently than the old machines, and delivers a much better quality of air to point of use. On the back of this success, the company is exploring the financial cost and projected energy savings involved in replacing at least one of its furnaces.
Savings at a glance
Annual energy savings: £11,330 Annual CO2 savings: 78.92 tonnes Loan payback: Three years
Return on investment: 2.6 years
Precision Engineering Plastics (PEP): energy efficient loan fits the mould By using three interest-free Energy Efficiency Loans from the Carbon Trust to upgrade equipment, Precision Engineering Plastics has stayed fighting fit to face the recession.
The business case
Founded in 1985, PEP started life as a 2,000.sq.ft unit with a couple of machines for producing injectionmoulded plastic components. Nearly 25 years later, the company employs 45 people in its 24,000sq ft factory in North London, which runs 24 hours a day, five days a week, and has an annual turnover of £4 million. Initially focusing mainly on the automotive and engineering sectors, PEP’s customer base now includes companies within the electrical and medical sectors, as well as the Ministry of Defence. The machines provide batches ranging from 50 samples to many millions.
In terms of energy efficiency, the business faces two common challenges: it needs machines that are modern enough to compete in their chosen markets, and sufficient cooling equipment to keep those machines running through relentless production cycles. When the company’s equipment supplier recommended the Carbon Trust interest-free Energy Efficiency Loans scheme, it was the beginning of a long-term partnership to modernise PEP.
PEP initially applied for a £10,900 interest-free Energy Efficiency Loan from the Carbon Trust to fit energy optimisers to 19 motors used on injection moulding machines and chillers around the site. This change went on to provide annual energy savings of £3,114.
In February 2008, in line with its continued growth, the company approached the Carbon Trust again, this time for help to replace two injection-moulding machines with newer models. We provided a second interest-free loan, of £47,285 to help fund the purchase of the new machines.
Besides being quieter and more energy efficient, the replacements are also quicker – reducing cycle times and running costs. This has reduced PEP’s annual energy bill by £18,700. At the end of 2008, the company used a third Carbon Trust loan – this time £10,500 – to buy a power factor correction unit and regulate the amount of power consumed by the plastic moulding machines. This change should deliver annual energy savings of £4,600. The company is now considering relocating its factory, at which point it will look at further efficiency measures such as lighting and insulation.
Savings at a glance
Total loans value: £68,685
Total annual energy savings: £26,414
Total annual CO2 savings: 223.65 tonnes
Overall average payback period: 3.5 years per loan