Business thinking drives energy efficiency

Ian Ellis reviews speakers at this year’s Energy Event and finds a common theme in the business-focused approach to saving energy

One of the advantages of chairing an event like the Energy Information Theatre (at September’s Energy Event) is that you can take in a wide range of current thinking on an important area like energy efficiency. Listening to speakers at the event one message is very clear: efficiency is an increasingly important strategic business issue.

It was obvious from a number of key speakers that the cost of energy is probably the main driver to efficiency across organisations. Speakers from the retail, utility and university sectors all said the same: energy’s impact on their bottom line is driving them to reduce energy consumption. And the figures they are talking about are certainly a big incentive to save:

“We spend £25 million per annum on electricity,” explained Colin Braidwood, energy manager for retailer Dixons. “That’s second only to payroll.”

“Our energy costs were going up, and those costs were very volatile,” said Mark Oliver, director of business services for Wales and West Utilities.

The financial impact of the Carbon Reduction Commitment (CRC) is also being felt: “The CRC has added £1 million to the University energy bill,” commented Paul Hasley the energy manager for Cambridge University.

Although they represent diverse sectors with different energy requirements, these organisations all faced similar questions: how can we reduce energy usage while growing? How can we persuade occupants to take energy saving seriously? How can we manage our energy in the long-term?

At the heart of the solutions for all these organisations was good information: data retrieved from building energy management systems (BEMS) or even through better meter reading. In terms of energy saving, it’s clear that a long-term strategy starts with knowing where you stand now.

“You need to understand energy demand first: what are the drivers to energy use in the business,” explained Braidwood. “The aim is to know your numbers and that includes the number of sites and meters which is not always as easy as it sounds.”

Oliver also pointed out that finding this initial core of energy use data can be a challenge, and it can also throw up some unexpected results:

“We have a complex property portfolio and at the start of this project we had limited or no data. After we started investigating, we found that we were paying energy bills for sites that we didn’t own. Bill validation has delivered substantial benefits and given us accurate reporting for future improvements.”

Once the current status has been established, it is important to identify the most suitable way to keep monitoring and measuring energy use. In some cases, sub-metering can be added for more accurate reporting. Cambridge University took this route; and Wales & West Utilities replaced 180 manual meters with AMR smart meters. However for Dixons, with 600 retail stores of various sizes, this option was not suitable. Instead, Braidwood modelled the energy profile for a typical store:

“With the information we gathered on floor area and energy consumption we knew how the typical store performed and used that as a rule-of-thumb,” he explained.

Dixons was able to identify typical energy-draining issues: out-of-hours consumption caused by drifting time clocks; failed switches so lights were not turning off; manual overrides and lack of back-of-house sensors. Also, as a high-street retailer, the lighting load for each store was very high.

Fixing these issues, and also persuading store managers to lower the lux levels for lighting in small increments, quickly resulted in lower energy usage. Braidwood and his team gained £1 million in funding from the business to tackle energy use in six key stores and were given one year to achieve payback: they managed it in just eight months.

Another benefit of having good data on energy use is that it can be used to educate and motivate occupants to better energy usage behaviours. At Cambridge University, many of the buildings occupants did not see energy as a factor to consider.

“Energy used to the ‘free’ to the departments, but now we have ensured that they are paying for usage,” says Hasley. “We also include a levy on electricity to pay for the CRC.”

Each of the 150 University departments which occupy 300 buildings, now has an annual energy-use target. “If they use less energy than the target, the departments receive a payment; if they exceed the target they are fined. These are real financial payments, so it is an incentive for them.”

By providing information on energy use, Hasley has made building occupants very aware of the financial implications of leaving equipment running unnecessarily. Dixons has taken a similar approach.

“We started store profit-and-loss reporting and energy use was included in that information. Energy use therefore became more noticeable to store managers,” said Braidwood.

“The next step was to introduce a league table. Store managers are used to being measured so it worked as an incentive for them.”

Both the retailer and the University also undertook training and energy-awareness campaigns, linking this with the data provided by BEMS and metering to give building occupants a reason to save. This combination proved successful for both organisations who are experiencing substantial savings on energy costs.

Of course, saving money is not the only reason to reduce energy use. “Our CRC reporting has improved considerably and it is easier to assess potential costs,” said Braidwood.

“We saw 20 per cent costs savings in the first two years and have achieved £2.5 million in energy cost savings over the past five years. But we also now have accurate and transparent reporting,” said Mark Oliver, “We have better information for making future improvements.

It is clear that energy measurement and management is no longer something that can be left in the back-room, with meters ticking away unnoticed. Energy is a business issue because it’s a business cost – and must be treated in the same way as any other cost. Good information is the starting place for any business strategy – and where energy is concerned this means the building controls and BEMS.

Ian Ellis is President of the Building Controls Industry Association ( and marketing manager for Siemens Building Technologies UK.