Manufacturers have been hit by soaring gas and electricity prices hitting record highs, leaving businesses desperate to cut their energy use, according to a new report Driving Industrial Energy Efficiencies, published by Make UK and Inspired PLC.
The new research delves into how energy-efficient practices and technologies can help companies save money and boost productivity while at the same time moving towards their Net Zero targets.
Net Zero is a priority for 92% or businesses and 68% have already made investments to start on that journey with two-fifths (22%) planning to in the next 12 months
Over the past two years, the cost of energy has been highly turbulent, exacerbated by an increase in operational costs. This has left manufacturers forced to operate with a significantly reduced margin, making introducing energy efficiency projects an attractive proposition.
The report shows that businesses have been taking a two pronged approach reducing energy consumption, from low-cost, low effort measures to more costly investments which deliver equipment and process upgrades. Simple steps such as getting the right energy supplier and securing an advantageous contract is critical. Monitoring energy use through smart metres and sub-metering can further cut consumption, providing more granular detail of unnecessary use. One rubber compound manufacturer saved £62,734 through a better energy contract and over £48,000 by reducing waste through circuit-level (sub-meter) monitoring.
Equipping plant machinery with meter reading tools or sensors, can offer real time data access by connecting it to the cloud (Internet of Things Technologies), enabling faults to be spotted as they happen. Implementing Voltage Optimisation, which only allows the exact amount of energy a business needs to be brought in from the National Grid, can also make significant savings. While overhauling compressors – which account for 10% of all industrial energy used - can cut energy consumption by 50%.
One energy intensive company which galvanises plant equipment introduced digital controls to deliver variable on-demand power to its furnaces, saving £400,000 on energy bills and reducing its carbon output by 1000 tonnes.
“Britain’s manufacturers have made significant steps to cut carbon emissions and move towards Net Zero,” said Faye Skelton Head of Policy, Make UK. “But in order to supercharge that journey, business needs Government to play its part in driving the process forward.
“To that end, Government needs to commit to introducing a National Advisory Energy Service similar to the model of Made Smarter which helps SMEs digitalise their production processes. This should provide smaller funding to companies of up to £20,000, include an energy audit, sub metering and an implementation plan as well as helping businesses access the right funding.
“We need to see also an immediate extension of the 12 months of 100% business rates relief on green plant machinery and equipment and building improvements to three years to reflect the business payback period.”
Andrew Stubbs Director of Optimisation and Performance, Inspired PLC, said: “As a dedicated energy and sustainability consultant supporting the manufacturing sector, Inspired wholeheartedly endorses Make UK’s comprehensive report on energy efficiency in manufacturing.
“Over the last twenty-four months, an increase in operational costs has forced manufacturers to operate with a significantly reduced margin and it is evident that energy costs now constitute a significant share of operational expenses. Make UK’s Driving Industrial Energy Efficiencies report delves into how energy-efficient practices and technologies can support cost reduction.
“One of the other key takeaways from this report is that sustainability makes good business sense. By implementing sound practises and applying continuous improvement processes around energy efficiency, manufacturers can pave the way for a prosperous, cleaner and environmentally responsible future.”
With the abolition of the Energy Efficiency Taskforce (EETF) which had expected to put forward policy proposals to support greater energy efficiency, Make UK is calling on Government to use the upcoming Autumn Statement to help companies transition to net zero through energy efficiency measures.
Among these calls included in the report, is for Government to undertake a gap analysis of the tax incentives available on energy efficiency to check no type of business falls between the cracks.
Heat recovery may have the biggest potential to improve energy efficiency, but as yet is almost untapped. It uses the steam or waste heat from machinery (e.g., compressors, ovens/furnaces, galvanisation baths) or high temperature processes, to heat up other parts of the process (low temperature), hot water, or for the space heating of the building. It can also be used to produce electricity via the Organic Rankine Cycle, a type of thermodynamic process which can use low temperature industrial waste heat.
Read the full Driving Industrial Energy Efficiencies here.
