How to deal with energy on your way to net zero
27 April 2022
Alasdair Dalzel-Job explains how to kick-start your journey to net zero emissions by focusing on energy measures, and why there’s never been a better time to get started.
Energy, whether as electricity, heating, cooling or in another form, is a key contributor to the carbon footprint of most organisations. Thankfully, it’s also where there tend to be lots of ‘low hanging fruit’ that can be tackled quickly at relatively low, or sometimes zero, cost.
Taking action now will also help to protect you from increasingly volatile and rapidly rising energy prices, which if left unchecked could do significant harm to your business.
Energy is a win-win
Over time, energy-related carbon reduction projects pay for themselves through savings on your energy bill. These savings can then be used to fund the more expensive, difficult-to-tackle elements of your wider net zero journey.
Even if the payback period takes several years, most businesses can still invest on a cashflow positive basis through clever finance solutions like loans that link repayments to energy savings. These days, there are very few financial barriers to making a significant impact on the energy-side of your carbon footprint.
Here are a few general steps every business should take to maximise their energy and carbon savings, with some examples from businesses we’ve worked with along the way.
Step 1: Get your energy baseline
The first step in improving your energy performance is to get an idea of where you are now. Gather data on your gross energy consumption from energy bills as a minimum, but the more granular the data (e.g. half-hourly meter readings), the better.
When collecting data, take into account variables that affect your energy consumption, such as operating hours/time of day, seasonal temperatures, occupancy rate (for office or hospitality businesses) or output/equipment in use (for manufacturing businesses). Your total consumption over a given period forms your baseline data, against which all future periods can be compared.
Once you have your baseline data, you can use it to normalise your energy consumption and track performance over time as a Key Performance Indicator (KPI).
Measuring your consumption during the day, out of hours and at weekends will also highlight your baseload demand (the minimum level of demand to operate your business during these periods), which you can then try to reduce over time.
Tracking the ‘energy intensity’ of certain variables (e.g. kWh of energy per unit of product or per £ of turnover) can also be a useful measure of the energy efficiency of your business when you are ready to take this next step.
Energy intensity = kWh chosen unit of measure
You can easily convert all of your energy data into the equivalent carbon emissions (CO2e) using conversion factors available online (read our Beginner’s Guide to Carbon Footprinting for more guidance).
kg CO2e = kWh x conversion factor
If you need support with any of the above, get in touch with our Resource Efficiency Team.
“We started off by doing some extensive energy logging of our site to measure consumption in different areas. This helped us understand our energy profile on a much more granular level and see exactly where all the power was being used. Even now, with everything we’ve done since, I still think it’s the most important thing we did.”
Matt Edgeley, Group Commercial Director, Teledata
Step 2: Get your team together
Once you have the data you need, you can start to consider what you can realistically change and who needs to be involved.
Effective decision-making requires the involvement of individuals at all levels throughout your business. Senior decision makers need to buy into the agenda, but you also need a diverse portfolio of people from different parts of the business who are well-placed to make suggestions and offer insight on the data you’ve gathered.
It’s also important to identify and include those who will ‘champion’ your improvements, especially where behaviour change is required, such as using equipment more efficiently or turning things off after use. Clean Air Ltd in Bolton is a great example – its in-house ‘environmental committee’ is made up of a mix of volunteers from across the business.
“From the start I wanted to make sure that the whole company could participate, so we set up [an] environmental committee to get a representative from each department involved. We met every month at first to get the ball rolling and now we meet every three months to monitor progress. Together we’ve come up with a huge number of ideas I would never have thought of on my own.”
Will Perrott, Managing Director, Clean Air Ltd
Step 3: Identify and quantify opportunities
With data and buy-in secured, it’s time to explore opportunities to save energy and carbon. Using your data as a guide to pinpoint the biggest areas of concern, conduct a full sweep of energy-using equipment in your workplace. Try these top tips for ideas on where to look.
When you have identified key areas for improvement, estimate any capital expenditure required and use your data to calculate the time it will take to pay back the investment. If you are a manufacturing or energy-intensive business based in Greater Manchester, you may be eligible for a fully funded resource efficiency audit by one of our specialist advisors.
“The support we received in calculating the energy and carbon reduction of [our] LED lighting investment, and what it would mean in real terms, really put the case forward. Without the Hub, we wouldn’t have got that over the line.”
Peter Allen, Director, ISM Waste
Step 4: Prioritise projects using the Energy Hierarchy
One of the most confusing parts of your net zero journey can be deciding what to do first. For many businesses, a good way to prioritise action on energy is to follow the Energy Hierarchy. It works much like the more well-known Waste Hierarchy by separating actions from most efficient to least.
I define the Energy Hierarchy as follows, from top to bottom:
The lowest carbon form of energy is the energy you don’t use in the first place. Designing out energy from your business at an early stage is important because it will minimise the need for more expensive interventions further down the line (e.g. maximising natural light might mean fewer energy saving LED fittings are needed later). These sorts of projects are low/zero cost, zero regret, and you might be surprised just how much you could save.
A chemicals manufacturer in Oldham achieved annual energy savings of over £12,500 simply by switching off shrink-wrap machinery that was left running continuously despite being unused 30 per cent of the time.
An engineering firm in Bolton saved £2,400 by switching off a small process oven between cycles. The oven was left on permanently but was only needed for short periods and could warm up in a matter of minutes, so it could be switched off 90 per cent of the time.
2. REDUCE / CONVERT
Once you have eliminated unnecessary energy use, focus on reducing your energy demand through energy efficiency improvements. Think about how the environmental services in your building could be made more efficient, for example through insulation, heating or lighting upgrades. You could also look to replace inefficient machinery or install new equipment that saves or recovers energy another way.
After eliminating unnecessary energy use through controls and behaviour change, data centre operator Teledata invested in several major energy reduction projects. One of these involved upgrading its air conditioning units with more efficient variable speed drives (VSD). Previously, air conditioning was always running at 100 per cent, but with the addition of temperature sensors that tell the VSD motors how hard they need to work, the site can now turn two out of every eight units off completely while still maintaining the correct temperature.
It may also be feasible to convert some of your equipment from one energy source to another, such as switching from oil heating to gas or electricity, or recovering useable heat from an existing process rather than generating it yourself. In many cases, electrification (e.g. switching from a gas boiler to a heat pump) is the long-term goal, especially if it can be supported by on-site generation such as solar (see below). But that’s not always the case, as the example below proves.
After upgrading its heating system with a new steam boiler, lubricants manufacturer Metalube found that it could actually improve efficiency and reduce carbon by switching from heating barrels with electric heat jackets to using a gas-powered ‘hot box’. Electricity use dropped as a result, while gas consumption stayed around the same because of the improved efficiency of the steam boiler.
Minimising energy demand as much as possible will put you in a better position to generate your own clean energy on-site.
A solar PV system on your roof may be able to supply a substantial portion of your energy needs, and any excess can be sold to the grid. However, it’s important to get the size right – being able to use the energy you generate yourself is far more cost-effective than selling it to the grid. Eliminating and reducing energy demand first will ensure the installation is correctly sized for your site.
Bradley Manufacturing in Oldham invested in a large solar PV array on its roof after a range of energy reduction projects had been completed. These included LED lighting, a de-stratification fan to drive warm air from the roof down to working height, a variable speed compressor and a waste heat recovery system to recycle heat from the new compressor. The company is now well-positioned to add battery storage to its solar PV system in future to help manage electricity demand even more efficiently.
Even when you have reduced your energy demand as much as possible and maximised opportunities to generate your own power, most businesses will still need to draw energy from the grid. The UK’s energy system will eventually become zero carbon as we transition to cleaner energy sources, but until then you can reduce your carbon footprint and support the expansion of renewable energy by switching to a green tariff.
This is a simple action that’s relatively inexpensive, and there’s no reason why you can’t do it immediately. In fact, many companies looking to reduce their carbon footprint as quickly as possible do just this. The reason it comes at the bottom of the Energy Hierarchy is that it should only ever serve to ‘mop up’ any remaining energy you cannot eliminate or generate yourself. Nothing changes to your actual energy supply when you switch to a green tariff and not all tariffs are what they seem, so don’t assume you can just change energy contracts and think your work is done!
…But the Energy Hierarchy is just a guideline
The Energy Hierarchy is a useful methodology to follow, but it’s not a hard and fast rule. Deciding the order in which to progress the projects you identify also depends on your individual objectives. Take these three scenarios, for example:
A) Are you aiming to cut your carbon footprint as quickly as possible?
B) Is maximising energy efficiency the primary goal?
C) Do you need to focus on measures that pay back the quickest?
The chart below shows several hypothetical carbon reduction projects at a fictional manufacturer, coloured according to the Energy Hierarchy:
Energy savings are shown on the x-axis, the y-axis denotes the time it takes for the project to pay back on investment, and the size each bubble reflects the amount of carbon the project will save. As you can see, the highest energy cost savings do not always correlate with the highest carbon savings or shortest payback period.
In the case of scenario A, it may serve to progress the big ‘carbon savers’ first, such as the solar PV and oven process. However, in scenario B, the oven process will be less attractive than the LED lighting upgrade. In scenario C, the solar PV is likely to come last.
There may also be other issues to take into account. For instance, if a key customer decides to prioritise suppliers that can demonstrate a clear commitment to renewable energy, then a high capex project like solar PV may be worth the cost in sales alone.
Every business is unique, which is why it’s important to understand the primary objectives of your net zero strategy from the start. To work out where your priorities lie and learn more about how to reduce your carbon footprint by tackling your energy consumption, consider joining the next cohort of our popular Journey to Net Zero programme, or get in touch with one of our environmental business advisors today.
Alasdair Dalzel-Job, Environmental Business Advisor
Alasdair provides resource efficiency and environmental risk support to businesses, helping them to identify and implement low carbon solutions. As well as a Master’s degree in clean technology, Alasdair has 17 years' experience in the environmental field. He is an ESOS Lead Assessor, a member of the Chartered Institution of Wastes Management, an Associate Member of IEMA and an IEMA Associate Environmental Auditor.