In the current economic climate, businesses have a greater incentive than ever before to save costs.
Energy is one of the biggest variable costs for businesses and is an important area where organisations can achieve cost reductions through better energy efficiency. The benefits, of course, are not just financial, but also environmental as the same energy efficiency measures will also deliver CO2 emission reductions. Increasingly, it is becoming important for businesses to consider both.
Managing energy consumption must now also consider environmental and societal demands. The current regulatory schemes EU ETS and CRC do and will call for businesses to reduce their CO2 emissions in cap and trade frameworks.
Simultaneously, the growing responsibilities and a broader public awareness of the need to reduce environmental impacts are necessitating a closer look at all utilities, not just electricity, but also gas and water.
Just as measuring a carbon footprint is now routinely expected, water footprinting is becoming more common – for practical operational reasons as well as those of sustainability.
The important thing is to recognise that focussing on a reduction in both carbon and water footprints, need not be a business burden but an opportunity. Businesses embracing the challenge to become more sustainable also stand to benefit financially.
The number of businesses signing up to the FTSE4Good Index – which measures the performance of companies that meet corporate responsibility standards – is testament to just how many are serious about their environmental credentials when it comes to doing business. To join the Index, businesses must satisfy three key criteria which include demonstrating that they are working towards environmental sustainability.
With carbon reduction in mind specifically, reducing emissions will provide businesses with better trading options under the existing cap and trade schemes.
Against this backdrop, how do businesses continue to drive forward with plans to reduce their consumption of utilities to meet growing environmental and societal demands?
Energy monitoring in action
Many companies have recognised how important it is to understand energy consumption better and have since improved their energy metering to gain this understanding. Through the use of smart meters, gathering energy consumption data is now standard practice for many businesses. The challenge then is to interpret the data gained to identify real and sustainable actions to reduce energy consumption and save costs.
npower is providing businesses with analytical, monitoring and targeting software – encompass – to make sense of the data provided by smart meters and to start turning data into ongoing cost-effective actions. The rationale behind encompass is that a business can only truly deliver on its cost and emission targets by looking at how, where and when it is using energy and then translating this into actions to reduce consumption. Put into practice there is strong evidence to support this approach.
Yorkshire Water has been working with npower to develop ways to enhance its energy management. In 2005, it became one of the first businesses to trial automated meter reading and, recently, it adopted the encompass software.
It already had many initiatives to help reduce its environmental impact – from investing in on-site renewable energy (for example from hydro-electric, wind turbines and combined heat and power plant) to installing more efficient pump technology. But combining automated meter reading with encompass has enabled Yorkshire Water to really understand how they use energy – and this is key to helping them use less and cut costs.
Initially, smart meters were installed at 300 of Yorkshire Water’s sub-100kW monthly-billed sites. This meant it was able to receive consumption data at half-hourly intervals via electronic transmission, meaning it could monitor electricity use at these sites, but also provide accurate rather than estimated bills. Previously it had only had that functionality at its larger half-hourly sites.
Using the data analysed by encompass, Yorkshire Water got a real understanding of its energy usage. As a result it has been able to optimise energy use at certain sites – for example by using two water pumps during low-tariff pricing and one at peak pricing.
Switching to just one pump is a relatively easy action, but one that will make significant savings by optimising charging rates. It demonstrates that processes that perhaps look unchangeable can be adapted so that business-as-normal operations are not compromised, but cost reductions are achieved instantly.
The important thing for an energy intensive business like Yorkshire Water is to have the right tools in place to identify measures they can take and then monitor their effectiveness.
From these electricity monitoring foundations, npower is now working with businesses to look at all utilities, recognising that the tactics that have proved so successful with electricity can be applied to all utilities to provide cost and environmental benefits across the board.
The new advanced version of encompass is a functionally rich product, developed specifically in recognition of businesses’ varied and complex monitoring and targets requirements.
The encompass software takes data collected from across the company, providing detailed reports on a business’s consumption together with analysis of water, steam and any secondary metered utility data and the related environmental impacts.
By analysing this data in detail, encompass can pinpoint where economies can be made, arming businesses with the information they need to deliver actual reductions in consumption and CO2 emissions and to better manage utility running costs.
The data derived is loaded and stored to allow a complete review and analysis in graphical and tabular formats across a company’s entire portfolio of sites traversing all its utilities.
With this data, benchmarks can be set and consumption tracked, as well as providing mapping potential for carbon use, cost and budget to give immediate visibility of potential issues and the opportunity to take corrective action instantly.
Furthermore, encompass can compare and benchmark performance against typical standards for similar businesses, government targets and past energy usage, as well as assess patterns of consumption, compare open and closed periods, perform sophisticated energy analysis and see advanced consumption forecasts.
In trials across six businesses, the use of encompass has identified total energy savings of over £183,000 and CO2 emission reductions of 19.2%, achieving a payback period of less than one year, suggesting it has a valuable role to play in helping a business meet their financial and emission reduction targets.
The bigger picture
Undoubtedly metering and monitoring is crucial, but it cannot be used in isolation. Multi-utility tracking using software such as encompass must form part of a combined utility management strategy and requires the efforts of all parts of the business from building services and environmental engineers to MDs and CEOs.
To help businesses achieve exactly this npower has developed m3 – measure, monitor, minimise – a suite of energy management products, including encompass, that provides support and guidance on developing and delivering an ongoing programme to reduce consumption.
With this level of support and technology, businesses will be able to better manage energy and CO2 reduction and take advantage of the opportunities of low carbon economy, now and in the future. By using technological advances such as encompass, businesses will
be on the right track to meeting their financial, social and environmental targets to prosper in a low carbon economy.