March 2015’s NWSBQ: Making energy management core business

NWSBQ - March 2015 (15small)Our colleague from Oxford, Fiona Barker, summarises our March 2015 event. Thanks, Fiona!

Our First NWSBQ of 2015 was held on the top floor of the City Tower providing beautiful views across the city of Manchester once again. Anthesis would like to thank Bruntwood for providing the venue and to ESG, The Energy Solutions Group, for sponsoring the lovely GoodMoodFood buffet to give us all energy while we learnt about making energy management core business.

The evening began on a cheerful note with our speaker Lord Rupert Redesdale giving a very entertaining presentation. He explained that for business the biggest variable cost is energy. Therefore, if you get the budget for your energy costs wrong it will come out of your profit margin. Lord Rupert used to be the energy spokesman for the Liberal Democrats and is now CEO of the Energy Managers Association which aims to promote the development of energy management in the British Economy. Lord Redesdale predicted a 25% rise in cost of energy next year. He suggested that, when carbon, environmentalism or sustainability are mentioned in a boardroom, a lot of people will associate this negatively, with “treehugging”, and switch off. If we can change the language and show energy management in terms of security of supply and cost of purchase issues, it becomes much more relevant to anyone trying to run a business.

One email has a carbon cost of 4 grams. Add an attachment to that and the carbon cost rises to 50g. A lot of people (your writer included) were unaware of this fact. Lord Redesdale suggested companies often miss spending on energy management. On average, businesses waste 40% of the energy they buy.

Lord Redesdale introduced the ESOS scheme and said there were other great developments coming down the line. ESOS requires a company to do an audit of the energy used by their buildings, transport and procedures to identify cost effective energy saving measures.

Predictions from the Government’s Chief Scientist indicate that every area of the UK will be stressed for water in 15 years and “Water doesn’t just fall out of the sky”(!). Although new measures are being introduced to allow us to buy water from any provider, the scarcity of the resource will increase the cost.

Lord Redesdale suggested that if energy was properly managed and the savings could be ensured, this would make energy a secured asset. The biggest resource for this is the supply chain, and the commercial decision companies need to make is between the training costs of introducing energy managers in comparison to supply chain savings.

The best case projection from the National Grid is based on wind energy which is not currently being built and the worst case is based on the nuclear power stations being decommissioned, which will lead to black and brown outs across the UK. Our power stations had only 1% reserve this year. These figures make it clear that energy management has become a business need financially, as well as sustainably.

To see Rupert’s slides, please click here.

We heard next from Chris Lewis who was the Head of Environment, now Business Programme Manager, at AstraZeneca and led the business through reductions in energy, waste and water from 2010 to 2013.

Chris explained that to make something core business you first need to define what your core business is. There is a big gap between energy management and medicine production and so you need to find a link! Energy and carbon savings need to lead to cash savings for the business. You need to define what the business really wants to achieve and set up frameworks for delivery.

Chris explained that it is a good idea to analyse risks and ask what will grab attention. The business then needs to get its commitment and targets sorted. These commitments need to be measurable and engaging to stakeholders if energy management is to become part of core business.

Once you have your target you can then look at your footprint and which processes and products have the highest cost in carbon. Ask: how can you start to control this? If you cut the budget available for travel you will see this reflected in your carbon footprint. It is important to be clear about what makes up your footprint so that you can look for ways to drive it down.

It is a big challenge to be able to think local and govern globally, so it is important to have clear guidelines for delivery. It is necessary to track the savings over time and to be clear on the management and roll back as some projects may over-deliver. The core business aim must align with the sustainability goal for this to be effective. AstraZeneca looked at forms of renewable energy, but producing their own energy did not fit well with core business, and so they decided to source renewables from elsewhere. This method of ensuring stakeholder engagement and aligning core business with sustainability has led to 20% less carbon usage across the company.

There was a lively question and answer session with topics such as the effectiveness of ESOS, different forms of energy, and political approaches to energy management being debated. We learnt that 82% of the energy at a fracking site is gone in the first year; that there is a significant advantage in building low carbon technology rather than relying on low cost energy to create efficiencies; and received more detail on AstraZeneca’s energy management plans.

Click here for the roundtable notes from the event.

Our next NWSBQ will occur on the Thursday 11th June. Please do join us!

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