How manufacturers can leap over the power price surge
Written by Linda Allardyce
The manufacturing sector is reeling under the extraordinary surge in energy prices over the past year and effective strategies are crucial for long-term survival.
Energy-intensive industries from ceramics and chemicals to glass and steel, along with other sectors, are looking for the best ways to adapt and thrive in the new age of high-price power. Some companies have seen energy costs quadruple in just 24 months, with sector leaders like Pilkington reporting that its energy bill for glass production has risen by an additional £10 million.
There’s little sign of the power pain easing. In early July, Britain’s day-ahead gas price reached a three-month high of 272.5p a therm, up 17.9%. Gas for delivery prices for August rose 7% at 302p a therm. The Society of Motor Manufacturers and Traders (SMMT) said costs within the sector have risen by almost 50% this year alone – an uplift of £90 million.
Mid-term pressures on energy prices include the Fifth Carbon Budget (2028-2032) which specifies a very demanding 57% reduction in emissions from 1990 levels. As the energy sector is responsible for around 21% of the UK’s total emissions, the response from the sector in the coming years will have a great impact on commercial energy bills.
SaveMoneyCutCarbon was founded on the basis that the era of “cheap-as-chips” energy fuelled by cheap oil, coal and nuclear was coming to an end. Its Carbon Mentors work with companies to develop sustainable strategies that drastically reduce energy costs and cut carbon emissions at the same time, while strengthening Environmental, Social and Governance (ESG) credentials.
It’s well understood that any sustainability project has to move beyond simply being green – just good for the environment. While that’s now essential for any business, there has to be a sound business case, with any investment in energy and water-saving projects delivering a rapid return on investment.
72% energy savings
One example is SaveMoneyCutCarbon’s work with Greene King. The brewery company’s large distribution centre in Abingdon had inefficient and aging lighting. SaveMoneyCutCarbon conducted an extensive technical survey and drafted a comprehensive energy and carbon report, with an investment-ready proposal that made the business case for a full LED lighting upgrade.
The experienced SaveMoneyCutCarbon team installed 97 Thorn HiPak Pro LED high bay fittings in the warehouse and chilled room areas. At the same time, it fixed energy monitoring equipment to provide accurate data on electricity savings, and worked closely with the managers to make adjustments to ensure optimum quality of light with extra high bays and repositioning.
The installation team also fitted LED panels with Lutron smart controls in the main office to maximise energy savings. LED panels were also fitted in other offices and the reception area with LED tubes installed in the distribution areas.
The project was completed on time and within budget to deliver 72% annual savings in energy use while reducing carbon footprint by nearly three-quarters. Longer lasting LED lighting also reduces maintenance costs substantially.
- Energy costs reduced by 72.3%
- ROI in 2.29 years
- Savings of £14,797 p.a.
- Carbon emissions cuts by more than 72%
- Improved & consistent lighting in all areas
- Reduced maintenance costs.
Greene King is committed to reducing environmental impact, winning awards for its development of energy and water saving strategies, which it sees as key to the long-term sustainability of the business.
Wayne Brownlow, Green King Abingdon distribution centre said :“We needed to improve the lighting as it was very dark in the warehouse and ensure that safety standards were being met. There were big patches of the area that were not covered for light.
“While quality of light was the driver for the project, there was also a bonus in choosing LED fittings with the energy savings they provide. After the initial installation, it was clear that extra lighting would be needed and SaveMoneyCutCarbon delivered on that. I was extremely pleased with the installation team and the clear communications they provided. The final lighting levels are excellent.”
SaveMoneyCutCarbon works with a wide range of businesses, delivering projects that over the past decade have saved companies millions of pounds. It has a proven track record of over 1,000 audits and energy reduction projects completed. See the Projects page showcasing how it has helped companies slash bills and cut carbon
Top 3 savers for manufacturing
LED – The manufacturing sector will continue to benefit from sustainability strategies that focus on excellent results from LED lighting installation together with smart controls that optimise both use of lighting and electricity consumed.
EV – The sector will reduce costs through the migration of vehicle fleets to electric. The government is committed to banning sales of new petrol and diesel vehicles from 2030 and the EV tide seems unstoppable. What’s more, lifetime ownership costs of EV are now lower than for internal combustion engine models.
Solar – Companies can ally the move to EV with the installation of solar panels to fuel vehicles and help to run plant. Self-generated energy is increasingly important as a means of reducing costs and as the price of electricity will continue to rise, cheap sustainable power sources will be a crucial part of the net zero mix.
5 ESG tips in the green age
Manufacturing companies have been at the forefront of a new focus on ESG policies, mindful of the growing concerns among investors and other stakeholders around long-term sustainability as the impacts of climate change begin to manifest.
With the mandates for net zero strategies being reinforced by national government and international organisations, companies are keenly aware of the need to shrink climate footprint and cut carbon emissions by addressing all parts of the value chain.
- Manufacturers should view ESG as a transformation project that produces radical, responsible differences. This means building a “shop-floor to top-floor” strategy.
- Fully develop an energy-efficient infrastructure, avoid natural capital depletion and improve waste management.
- Company leaders should capitalise on existing operational expertise to drive the reinvention of business models, identifying and supporting innovative ideas.
- Gather data: identify the most effective ways to measure. Define and embed key performance indicators (KPIs) and industry benchmarks.
- Develop and promote diversity, tackle economic inequality and root out discrimination.
The manufacturing sector is effectively geared to meet these transformative challenges, building on deeply embedded expertise in large-scale project management as well as the commitment to effective definition and execution of KPIs.
SaveMoneyCutCarbon is proud to be a Member Rewards partner with ICAEW, supporting members to reduce business energy costs and delivering ESG agendas. Any company of any size can book a free call with an Energy & Carbon Mentor. During the 30-minute Zoom consultation they will assess main business drivers, answer questions and share recommendations to help the business save money and cut carbon. Book a call here