Do less, save more
April 1st 2006 Historically, energy outsourcing was primarily seen as way of reducing operations and maintenance costs. However, with price volatility and the carbon agenda impacting on energy users, many companies are now taking a more strategic approach and looking to the process to bring significant energy efficiency benefits too. Douglas McLeish, business development director,npower business, looks at the changing face of energy outsourcing
The impact of the last few years on commercial energy users has been well documented. Unprecedented wholesale energy costs and continued price volatility, as well the political drive to tackle climate change have forced many companies change the way they think about energy.
Yet these recent economic and environmental challenges have only been with us for the last couple of years. Energy and environmental issues used to be a relatively low priority for companies and during the period of low energy prices many organisations down-sized energy management teams and spent resources and capital elsewhere.
Traditionally, energy outsourcing was often approached as a tactical matter rather than a strategic one, and it usually focussed purely on the energy supply side, for example running boiler houses. This reduced operations and maintenance overheads and removed the need for in-house expertise while ignoring the potential for reducing significant energy demand in the customer's facilities.
In the new energy market reality, the increasing economic and environmental pressures, coupled with the reduction in technical resources, have increased the demand for outsourcing to do more than simply reduce operation and maintenance costs. Outsourcing is now playing a much broader energy management role, addressing not only consumption, but also procurement, as energy management evolves into risk management.
Combining more sophisticated procurement expertise with intelligent energy management offers substantial cost and carbon savings.
In 2002, Sainsbury's set itself a goal of reducing carbon emissions emitted per square metre of floor space by 10% by 2005, compared to 1997 levels. The company aimed to achieve this through a long term partnership with npower business, which comprised utility supply as well as energy demand reduction, through outsourced energy management and consultancy.
From a procurement perspective, power and gas agreements were signed in 2002 to supply all UK stores, with a high percentage of energy derived from renewable sources. At the same time, project work was undertaken to identify where energy savings could be made across the Sainsbury's estate.
One area was lighting and heating with pilot schemes modifying lighting and improving controls over existing door heater installations.
The results saw energy consumption for lighting in some areas reduced by 20%.
Refrigeration, which accounts for a large proportion of total energy use in the retail environment, was also scrutinised and by overhauling and optimising existing refrigeration equipment, and using online monitoring to understand usage 24hrs a day, energy use dropped 18%.
Another successful project was voltage supply was stepped down to 230 volts at main incoming transformers. As well as meeting future EU legislation, this initiative reduced overall store energy consumption by a further 3%.
In terms of meeting the target of a 10% reduction in carbon emissions, the project achieved an 11% reduction. This figure did not include the environmental benefits of purchasing renewable energy and when this was taken into consideration, emissions were 20% lower per metre squared of floor area. From an economic perspective, the initial capital investment of £12.5 million has seen financial savings of £8 million a year.
Due to the success of the project, Sainsbury's and npower are working towards further environmental and economic targets. More articles from npower business: | 
