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North West manufacturers have most energy efficiency potential

By increasing investment in energy saving tech over the next decade, UK manufacturers could cut consumption by nearly a third, with the North West set to benefit the most, a new report concludes.

By increasing investment in energy saving tech over the next decade, UK manufacturers could cut consumption by nearly a third, with the North West set to benefit the most, a new report concludes.

The Energy Resilience in UK Manufacturing report from Barclays examines the attitudes of UK manufacturers towards energy management from a YouGov survey and models how they could reduce their demand.

The research estimates that manufacturing output and the wider economy could be boosted by £2.56 billion over the next decade through increased energy saving investments. Notably, it shows that the North West could benefit from accelerated investment more than any other region (£1.06 billion).

Overall, the UK manufacturing sector could cut its energy consumption by nearly a third (31.6 per cent) over the next decade, the report adds. 

Price hikes

Energy management is high on the agenda for many manufacturers. According to the survey of more than 500 manufacturers, over half expect energy shortages in the coming decade and nearly three quarters expect significant price rises.

Furthermore, more than one in four are now more concerned about energy supply than at the start of 2016, due to increases in the price of other raw materials, greater competitive pressure and the eventual impact of the UK leaving the EU. Nearly half expect energy price hikes in 2017. 

However, only 35 per cent of those surveyed are currently using or seeking to implement energy efficiency measures in the next 12 months.

Best practice

According to the report, the best performing companies have focused on one or more of the following strategies:

Quick wins – such as monitoring energy usage, reducing wasted energy and encouraging staff to reduce energy use

Processes and systems – such as introducing energy management programmes, changing operating procedures, improving maintenance or setting up energy use reporting systems

Structural change – for example, through a step change in the business, new production equipment or process redesign.

Mike Rigby, head of manufacturing, transport and logistics at Barclays, said: “We know manufacturers are already taking steps to improve their energy resilience, from investing in energy efficiency to self-generation and partnering with resource recovery parks.

“However, our research shows that increasing this investment will not only protect the sector from future fluctuations in energy supply, but will also benefit the wider economy by making the sector more internationally competitive through reduced costs and increased productivity.” 

SMEs

The report also adds that larger businesses are expected to become more demanding of their suppliers in the coming years, which may result in a greater need for SME manufacturers to emulate some of the advances in energy management made by larger businesses and industry trailblazers. 

However, a separate survey conducted by YouGov on behalf of ScottishPower has revealed that only one in ten SMEs have taken measures to decrease their energy consumption in the last 12 months.

Greater Manchester SMEs can benefit from fully-funded specialist support to improve energy efficiency through the Business Growth Hub. For more information, click here.