Cutting costs: making energy management work for you

It is said that if you can't measure, it you can't manage it. This may not be a universal truth but it certainly applies to those companies planning to reduce their variable costs as part of a business improvement strategy.

For many businesses energy costs are addressed only quarterly – when the bill arrives from their supplier. The financial impact of energy consumption is seen simply as an unavoidable cost – which is, to an extent, true. However, it is possible to take a number of actions that can alleviate this problem to a greater or lesser extent.

Typically, the more a business spends on energy consumption, the bigger is the opportunity for making savings. But regardless of scale or scope, it is always possible for an organisation to take some kind of action that will boost energy efficiency in such a way as to improve financial performance.

Poor practice at an enterprise can significantly limit any improvement push undertaken. Examples of bad habits include:

  • Accounting for energy purely as pounds and pence rather than by consumption
  • Not checking your utility bills
  • Accepting estimated readings
  • Not analysing energy use on an annual basis for trends
  • Accounting for energy use as KWHrs but not relating the results to production activities or weather conditions.

As is always the case in life, doing something differently or better requires effort and time. A more managed approach to energy consumption will have to be driven from a senior level in a business to ensure it is sustainable and achieves the cost reductions desired. And only when the benefits of such an approach are fully understood at this level can energy management work its way up the business agenda.

And once an organisation begins to think in an ‘energy strategic’ way, what are the next steps? Well, careful analysis of data already held or available to a business is a good place to start.

This will involve:

  • Checking utility invoices for accuracy, the right tariff and Climate Change Levy  (CCL) reductions
  • Providing actual meter readings to the supplier
  • Providing automatic readings where possible, perhaps by using
    half-hourly metering
  • Using sub-metering
  • Making consumption data available to high users within the
    business
  • Accounting for weather or production cycles
  • Making energy consumption auditable

By beginning to look at energy in this way, by measuring energy data and making the results and trends widely available across an organisation, a business can begin to exert more control over the energy it uses, where it is used and when, and begin to understand where savings can be made.

Of course, that outlined above is just the tip of the iceberg when it comes to energy management. There is so much that can be examined and improved. And the more seriously your business takes this issue, the bigger the savings it will make.