Rule-changes drives an energy rethink for UK companies

28 October 2010

A change to the Carbon Reduction Commitment (CRC) scheme included in the UK government’s recent Spending Review has made it even more important for companies to cut their energy bills, argues Andy Parker-Bates of Parker SSD Drives.

Monies raised through a levy on major energy users, that were intended to be redistributed to companies who had done well in reducing their energy consumption, will now go to the Treasury instead, alongside general taxation.

“Companies that thought they had a guaranteed chunk of money coming in through the CRC will now have to find a replacement,” said Parker-Bates “The best option is to crank up the energy reduction measures that are already in hand.”

UK Chancellor, George has stated that this move was to reduce bureaucracy, but omitted to say how it would affect the private sector companies that the government had said it wants to help. (Calculations suggest that a moderately large company could actually be £100,000 out of pocket).

“The CRC only came into force six months ago. Many people have only just worked out a strategy for being a winner under the scheme, getting a payback greater than the levy paid. The most sensible thing to do, going forward, is to maintain, or even increase, the proposed investment into energy saving technology and reap rewards that way,” said Parker-Bates. An energy audit will identify areas where energy usage can be cut and how to do it. If there is an investment, payback calculations will help to identify a schedule of projects.

Some things, like reducing leakage from compressed air lines and turning off lighting when no one is present can produce large savings at little or no investment. “Most companies will have gone through this phase a few years ago,” says Parker-Bates. “But fitting inverters to motors and similar technical solutions still create many more opportunities for energy savings.”

Naturally, production companies with manufacturing or processing plant will have many motors to be assessed, but motors are also found in air conditioning systems, driving pumps in the plumbing, and many other pieces of equipment. All of these have the potential for significant energy and cost savings. “Many motors are left running continuously, even through the night and at weekends; while others could be switched off for a notable proportion of their duty cycle,” said Parker-Bates. “Very importantly, it should be noted that a motor’s energy consumption is proportional to the cube of its running speed. So cut its speed by half and you save 80% of the energy.

Parker-Bates identifies another strategy: “Consider replacing the motor itself. Motor efficiency has improved steadily over the last 10 years, so any motor over a few years old may be inefficient by modern standards. Motors also tend to lose efficiency with use; another reason for considering renewal.”

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