Wholesale energy price volatility has been going on for years now, first observed during the notably cold winter of 2021/2022, and worsening as Russia invaded Ukraine and caused significant disruption to global gas supplies.
Manufacturers that don’t take control of their energy consumption will be relying on the more unpredictable, expensive and carbon-heavy supply from the grid.
Shifting away from the grid or reducing on-site usage was, in the past, seen as the expensive option, with upfront costs for new machines or systems outweighing the reduced operation costs - but not anymore. The economics have changed and manufacturers can now cut their energy consumption and costs at the same time.
Add to this government incentives and making the switch becomes even cheaper. Schemes include full capital expensing, enabling cost reductions through investment of year-end profits as well as the 50 per cent first-year allowance tax relief scheme, which enables businesses to claim 50 per cent of the cost of eligible capital expenditure, including thermal insulation and solar PV.
What does this look like in practice? One of our manufacturing clients, Silverline Office Equipment, made a combined annual saving of £671,753 and lowered its energy consumption by 58 per cent by installing solar photovoltaics (PV), optimising its energy voltage and adopting a flexible purchasing strategy.
So how is this possible? At Advantage Utilities, we have two guiding principles which shape how we make energy and operational savings while reducing carbon emissions.
‘The cheapest and greenest form of energy is that which is not used at all’ is a principle which refers to newer, more efficient technologies which provide the same functions and same performance as existing installations but consume less energy.
‘The greenest form of energy is now the most affordable’ follows the notion that renewable energy generators have undergone significant advancement over the past decade, meaning these technologies can now produce energy at a cheaper rate than power from the grid.
Increasing onsite efficiency
Businesses should look to the following solutions to increase onsite efficiency: Industry 4.0 solutions, upgraded heating, ventilation and air conditioning (HVAC), LED lighting, voltage optimisation, and energy efficient boilers.
Industry 4.0 is the connecting of technologies throughout the manufacturing process with the aim of making it smarter. Digital monitoring, predictive maintenance, and automation; all of these technologies can be applied to make manufacturing more efficient, and with efficiency comes not just energy cost savings but increased output.
A comprehensive assessment of a business’ operational footprint helps to identify where these efficiencies can be found and from there solutions can be identified and implemented. These efficiencies can be found not just in key manufacturing equipment but in adjacent systems like HVAC.
HVAC systems, for instance, can be made smarter by introducing technology that allows them to better monitor the facility environment and so turn on only when needed.
By switching to LED lighting, businesses can make impressive energy savings. A client of ours was able to make 52,000kWh in energy savings within the first year, having replaced 382 existing non-LED fittings with high-efficiency, long-lasting LED alternatives.
Savings were estimated to total £130,000 over the 10-year lifetime of the LED fittings and the enhanced lifetime of lighting fixtures saves on OPEX replacement which would otherwise cost £680 per year.
Voltage optimisation is another effective method of improving onsite efficiency. By matching onsite electricity to the exact supply voltage required for equipment and lighting via voltage optimisation devices, businesses will reduce their grid consumption and make savings in the process.
Another client of ours was able to reduce grid consumption by 8 per cent, saving a total of 134,975 kWh a year or 25,645kg of CO2. Yearly savings were estimated at £33,744 and the voltage optimisation devices have an expected lifetime of 100 years, so 25-year savings alone would total £843,593.
Last but not least, boiler upgrades should not be overlooked in any organisation’s journey to net-zero. Installation of two 120kW Strebel S-CB 120 boilers allowed another of our clients to increase their efficiency from ~80 per cent to ~95 per cent, leading to an annual saving of ~100,000 kWh per year on gas. The value of this saving was £9,000 in the first year alone, also making carbon savings of 19,000kg in the same time frame.
Increasing onsite generation
Onsite renewable energy generation has become significantly cheaper in recent years thanks to maturing technology bringing down costs while increasing efficiency, making them a viable alternative to drawing supply from the grid.
There are numerous methods manufacturers can choose from, including solar PV, wind turbines, hydro power, energy storage, air and ground source heat pumps, electric vehicle charging and hydrogen. However, not all of these solutions will be applicable to each business, so a consultation on your site is the best method to identify which technology is best.
Beginning with conversing and auditing a site, involving data collection and site assessments, businesses are then designed an accurate system model of what their site would look like. The process ends with delivery and management, enabling businesses to increase their green credentials and energy savings by reducing grid-sourced energy which is both pollutive (0.207kg of CO2/kWh) and expensive (~18 to 28p/kWh).
To give an example of this in practice, Advantage Utilities helped Kurt J. Lesker, a leading global provider of high-quality vacuum equipment, to reduce its carbon footprint by installing solar PV. This also helped reduce energy costs by using 70 per cent renewable energy at its warehouse.
The installed size of solar PV was 100.04kWp and was able to make £25,687.20 in energy savings (85,624kWh) in the first year alone. With a lifetime of 25 years, the business is projected to save £513,265 by making 2,053,061 kWh in energy savings over this period.
With high energy costs and the urgent need to decarbonise, manufacturers must find solutions to weather this difficult period.
Thankfully, a maturing green, smart technology sector is allowing manufacturers of all sizes to reduce their energy consumption and lower their costs. My advice: they should not delay in finding out how such strategies can benefit them.
