The power and potential of managing energy

Posted on 17 Feb 2014 by Callum Bentley

As British power prices continue to surge, manufacturers must look to new ways of managing how they use what power they have and how to do it in the most cost effective manner.

According to a joint survey released today by manufacturing organisation EEF and energy supplier npower, Britain’s manufacturers are increasing their investment in strategic energy management and efficiency, in order to improve their competitive position against a backdrop of rising energy costs.

The survey voices the concerns of manufacturers and recognises that investment in energy management is not without significant barriers, including the perception of extensive payback periods and businesses prioritising other investments

Gareth Stace, head of climate & environment policy at EEF, said: “Managing higher energy costs whilst maintaining international competitiveness is one of the biggest challenges facing manufacturers today. The most advanced companies are systematically addressing inefficiencies in their buildings and processes to try and mitigate rising costs that come straight off the bottom line. This must remain a focus for all manufacturers.

“The prize of getting it right for companies is significant. This is not simply because of the direct benefit of reducing costs and improving our competitiveness, but because manufacturers will develop the technologies and services which will help other parts of the economy improve their efficiency.”

The survey also shows that since 2002 the industrial price of gas has increased by 122%, while industrial electricity prices have increased by 94%. As such, 96% of businesses cited reducing energy use and addressing cost as the main reason for investing in energy efficiency.

Key findings

  • One third of CEOs and Managing Directors have taken control of energy efficiency decisions
  • Once turnover exceeds £20 million, manufacturers start turning to specialist energy buyers or managers
  • One in five manufacturers are looking to suppliers for advice on energy savings and efficiency
  • 96% of companies surveyed quoted reduction in energy bills as a reason for implementing energy management
  • Almost two thirds of manufacturing companies cite reducing their carbon footprint as the reason for implementing or considering energy efficiency measures 

The survey also highlights that manufacturers are taking their responsibility to reduce their carbon footprint seriously. Reducing electricity bills is cited by over two thirds of manufacturers as the main benefit of investing in energy efficiency, whilst a similar number see a reduced footprint as the main benefit arising from their energy efficiency investments.

Wayne Mitchell, director of industrial and commercial sales and marketing at npower, commented: “Good energy management happens in the boardroom, and with the cost of energy continuing to rise, making strategic decisions with a trusted energy expert can help a business stay competitive. At npower, we’re committed to developing that kind of relationship with our manufacturing customers.”

The rise of energy on the boardroom agenda is emphasised by the fact that over a third of CEOs and managing directors retain control over energy efficiency decisions, with a similar number taking the lead on procurement. Whilst the survey shows that specialists tend to be introduced in companies once turnover exceeds £20 million, of all manufacturers surveyed decisions were still taken at board level by half of companies.