Companies which have come to the end of a fixed price energy deal in the past year will have had a sharp reminder about such costs. Many will have experienced rises of 30-100% in energy prices and this impact goes straight to the bottom line.

The amount that you pay for energy has two components, the price and the volume. If the price is largely outside your control, it is necessary to concentrate on reducing the amount required in order to generate savings, or at least to reduce the scale of the increases.

Virtually any company which has not previously considered energy management has the potential to save 10-20% of the amount it uses. Much of this saving can be achieved through no and low cost measures. Where investment is required, this can be made economically attractive with an interest-free loan from the Carbon Trust, an independent, non-profit company set up by the government.

Measure to manage

The first stage of any efficiency programme is to measure exactly what happens at present. As a minimum, all companies will have energy information from their bills consisting of volume and price for a specified period. Depending on the meters, contracts and supplier, manufacturing sites may also have available half-hourly data regarding electricity consumption.

A number of initial checks should be performed:

  • Make sure you can find all of the meters to which the bills refer – to ensure that you are not paying for someone else’s use and are not paying standing charges for meters which you no longer use.
  • Have you checked the customer profile issued by your electricity company? This is the figure at the top left of the identifier code on your bills (see above image). The profiles run from 01 (domestic) through 09 (heavy load) to 00 (half-hourly metered supplies). Check that your profile is suitable in terms of maximum demand, day/night units and total consumption.

Have a look at the amount of energy used when no-one is on site. This can be achieved by charting the half-hourly data or simply reading all meters last thing on Friday and first thing on Monday. Multiply this usage rate by the number of non-working hours on the site, for example, nights, weekends and holidays.

If so, try to break down this use into its component parts and address each in turn, for example, allocate responsibility for checking that process machinery, compressors, lighting, heating, cooling and office equipment are turned off overnight. Put programmable timeswitches on communal equipment which can be turned off, such as water coolers, drink vending machines, large printer/copiers.

Process energy

The big savings are likely to accrue from process machinery. For sites with wood dust extraction, how many kW of fans do you have on site? It is not uncommon to have 50-100kW. A site at the bottom of this range will spend £4.50 per hour to run its fans (at 9p kWh), which does not sound much, but equates to around £11,000 per year. Further costs will be incurred during winter to heat the air which is then extracted. Realisation about these costs has prompted innovative companies to look at inverters to reduce power to the system when possible. Similarly, the consumption of the induced draught fan of wood combustion systems can be significantly reduced through the use of inverters. Motor providers will offer free advice over the phone and will conduct free site visits to advise on the potential payback of upgrades.

Compressed air is another significant cost. Employees often assume that, as it is air, it must be free. In reality, compressed air costs around 10 times as much as electricity per kWh and will often account for 20-30% of manufacturing site electricity usage.

Walk round your site at lunch time and count the number of hisses. An air leak which you can hear will cost at least £100 if left uncorrected for a year. Therefore, there should be a system for reporting leaks and ensuring that they are repaired each week. If compressors are over five years old and are in constant use during the working day, it is likely that there would be cost savings from replacement. Most compressor suppliers would be willing to conduct a free site survey on this issue and advise on the benefits of upgrade.

Another way of reducing compressed air cost is to ensure that systems are not generating too much pressure. Certain machines require high pressures of 100-120psi, but many uses can manage perfectly well at 90psi. If various air pressures are required, restrictors can be used to control the pressure to specific legs of the system. Further savings can accrue from thinking about the working hours of the compressor. If you have cheap rate electricity until 7am, is it worth bringing the system up to pressure at 6.45am?

An area in which most sites can generate savings is lighting. The fitting of simple sensors will help to ensure that lights are turned off when there is sufficient natural light present. Similarly, movement sensors can be a useful way of ensuring that areas with occasional use are not lit the whole time. The switch from traditional thick fluorescent tubes to high efficiency fittings and bulbs will also generate savings. Lighting suppliers should be able to conduct a survey and suggest the degree of cost/saving.


For those who pay the bills, heating is a frustrating area of energy use. Money is spent pumping heat into a manufacturing workplace at the same time that fans are sucking the heated air out (to control dust) and large roller shutter doors are left open. Consequently, some sites provide radiant heaters which heat the person, not the space. If these are used, consideration should be given to regular cleaning of the mirrored surface and the installation of movement sensors so that the units only work when someone is present.

An increasing number of timber-related companies are installing wood combustion plants to generate space heating, to combat both rising energy and waste disposal prices.

The equation has been boosted by interest-free loans available from the Carbon Trust. Energy-efficiency loans from the Carbon Trust are available to help companies fund energy saving projects such as the upgrading or replacement of lighting, boilers or insulation (

The loans range from £5,000-100,000 and are unsecured for up to four years. They are available to small- and medium-sized enterprises which have been trading for at least 12 months. Such loans can be used to fund a bundle of energy saving measures such as a small wood combustion unit, new air compressor and installation of high efficiency lighting.