Managing Directors of local manufacturing firms in the Midlands held a Control Energy Costs Roundtable discussion on 26th January, at Petford Tools Ltd in Dudley. The discussion was facilitated by Made in the Midlands, who aimed to share best practice on behavioural changes that UK manufacturers can implement to reduce their energy liability.
The roundtable discussion started with MiM Director Charles Addison posing the statement: In a recent business survey, 9/10 manufacturers & engineers in a survey of 600 firms said energy costs were becoming business critical in levels at the end of 2015. 2/3 of these firms outsource their energy procurement and dont really understand what theyre being charged for.
The roundtable aimed to discover whether the statement accurately reflected their experiences of the renewed importance of energy. The experts of the conversation were Control Energy Costs Ltd (CEC). They have around 35 years of experience in energy consultancy and 52% of their clients are manufacturers.
Remarkably, Melvin Sinar, MD of Petford Tools Ltd revealed: Energy costs here are not really managed, we just buy it we need it but it hasnt warranted employment of a full time person to manage it.
Wholesale gas prices have plunged by 50% in the past two years with electricity down 30%. This should have led to a 23% reduction in gas bills while shaving 10% from the average electricity outlay. However, bills have stayed relatively unchanged since 2013, leaving 17 million homes paying a total of £3 billion a year more than they should.
Additionally, Deryk Law, MD of Clayton Holdings Ltd explained: Electricity is 12% of our turnover its shocking how many people within the business dont know how long equipment is being used for and what the costs are.
Chris Ellis, Director of CEC Ltd stated: CEC Ltd can explain and help you challenge your bill and are more of an outsourced expert rather than a broker. The trouble is the government approach is becoming increasingly difficult as their green incentives are being reduced, yet still maintain their commitment to the green agenda.
Only 50% of manufacturing firms who responded to the survey have an energy plan for the next five years. The manufacturers at the roundtable who were implicating measures to reduce costs highlighted the benefits of taking energy into consideration. David Lindsey, MD of Laser Process Ltd provided a brilliant example of reduced energy costs within their core business, as he stated: Our new fibre laser uses 40% less energy than our older CO2 lasers we probably spend around £3,000 PCM per machine on energy.
Guy Hitchman, MD of Voestalpine Rotech provided a great example of a manufacturer taking extensive measures to lower their energy bills and liability, as he explained: Over the last 15 years we have used a service that we pay a % of our saving on energy. In house, we look at behaviour closing shutter doors, turning heating on, opening them turns heating off.
We have a 70,000 sq ft of production area, the firm has also just fitted solar panels and LED lights and we should see considerable savings over the next three years.
In response to the feedback, Liam Conway of CEC Ltd said: There are some quick wins here though, we can generate a report on each company here and can seek out reimbursements and refunds on incorrect payments made to date on electricity, gas and water. CEC have the capabilities to look at your bill and discover any problems. The cost of their expertise is a lot less than the savings which will be made in the long-term.
In conclusion, the roundtable captured the necessity of improving behavioural energy saving. Manufacturers can reduce costs by simply improving compressor efficiency (leaks), close shutter doors, time heating better and train their workforce to slow down in forklifts. Also, the costs of investing in future technology such as LED lighting and energy-saving machines are significantly lower than the money you could be losing by not upgrading equipment.