Businesses Don’t Take Energy Management Seriously

Posted on January 31, 2012 by Emma

A Siemens report says UK businesses don’t take energy management seriously.

A report published by Siemens says that 1 in 3 of those responsible for energy management in UK businesses say that their organisation doesn’t take it seriously.

At a time when business electricity prices and gas tariffs are rising and when economic conditions are tough, energy management is something which businesses should be taking into consideration. However, according to the report this doesn’t appear to be the case.

The report, the Siemens Green League report, looked at the views of 600 businesses. The report showed that those in the boardroom were much more confident about how the company dealt with energy management while energy managers were less confident. The report showed that 83% of board directors thought their organisation was serious about energy management.

Energy is a critical area of cost for UK businesses. Therefore it came as a surprise to find that 27% of board directors didn’t know what their business energy bill was and 9% said they couldn’t afford to invest in energy management projects.

Thirty per cent of directors blamed a lack of obvious return on investment for the reason they avoided committing to energy efficiency measures. This lack of enthusiasm for energy management at board level filtered down to managerial level according to the report. Around 43% of energy managers said they only spent 10% of their time on energy management. They said that other duties including health and safety took up most of their time.

There were some positive findings from the report however. It found that 70% of businesses were planning to invest in energy efficiency projects over the next three years. The industries which appeared most committed to investing in energy efficiency measures included food and automotive manufacturing.

MD of Siemens Industry Sector in the UK and Ireland, Juergen Maier said “These results do give cause for concern. Not only is the UK subject to strict legislative carbon reduction targets, but many businesses are neglecting the impact that effective energy management can have on the bottom line. With significant costs attached to energy and indicators suggesting that high energy costs are here to stay, it really is in the interest of all businesses to take energy management seriously and look at the potential savings that can be achieved”.

He praised the manufacturing industry though. He said “It is, however, great to see manufacturers coming out so positively in this research. As an energy-intensive sector that has been governed by legislation for some time, there will be numerous examples of best practice across our industrial base that other sectors can adapt for their own organisations and reap the benefits”.

He finished by saying “It is important to note that the research does highlight evidence of good work being done by companies of all sizes across all sectors, but the overriding message is the need to do so much more. Now is the time for action or businesses risk falling behind in an increasingly competitive global marketplace”.

Rise In Wholesale Energy Prices Threatens Business Gas Prices

Posted on January 30, 2012 by Kathryn

Wholesale energy prices are increasing as forecasters warn that there’s cold weather on the way and as a result business gas prices could start to rise.

The news over the last few weeks has been about the Big Six energy companies cutting domestic electricity and gas prices as a result of the fall in wholesale energy prices since last summer. However, wholesale energy prices are now rising as forecasters warn cold weather is on the way.

The forecast of cold weather for the next month has seen power and gas markets driven up as cold temperatures raise concerns about supplies. Business gas prices and electricity prices differ from domestic prices partly because energy is bought for business use largely from the day ahead market. However, day ahead power has increased by £0.60/MWh to £44.00/MWh because the markets expect demand to increase.

There’s been even more movement in longer term prices. Summer 12 power has risen by a significant amount – £3.10/MWh to £45.30/MWh. This is the highest it’s been for 5 weeks, so it’s not an insignificant increase.

International energy markets are also higher largely as a result of uncertainty over the situation regarding Iran. In addition EU power prices have risen and as a result coal prices have also gone up.

The message is clear. With the threat of a prolonged cold spell and concern over power supplies, if your business energy contract is due for renewal, compare business gas rates and electricity prices now. Prices are on their way up so renew before they start to increase.

Centrica Increases Stake In North Sea

Posted on January 30, 2012 by Ollie

Centrica, the owner of British Gas, is to increase its stake in the North Sea after agreeing a deal with ConocoPhillips.

Centrica has reached an agreement with ConocoPhillips to buy its non-operated interests in the gas and oil producing North Sea field of Statfjord and associated satellites. The oil and gas fields are located in the Norwegian and UK sectors of the North Sea and produce gas for the UK. Centrica announced that the deal would provide another source of gas for the UK and therefore would improve the country’s energy security.

There are concerns over the UK’s energy security. At the moment the UK imports a large percentage of the oil and gas that it uses. Therefore the UK is susceptible to rising wholesale energy prices and as a result businesses could be faced with rising business gas prices or electricity prices. Improving energy security in the UK will help to prevent businesses and households from being at the mercy of wholesale energy price increases.

The deal means that Centrica’s overall stake in the field will increase to 34.30%. Gas produced in the satellites associated with the Statfjord field all produce gas that’s already contracted to Centrica and linked to the UK market or which has yet to be contracted.

The agreement will add an extra 36 million barrels of oil equivalent reserves to Centrica’s portfolio. It means there will be an extra 11,000 barrels of oil equivalent produced each day.

However, in order to maximise production in these areas Centrica said development costs would amount to around £200 million.

Managing Director of Centrica Energy, Mark Hanafin, said, “Increasing our stake in Statfjord marks the latest stage in our drive to secure high quality sources of gas for our customers, adding both earnings and long-term value to Centrica. The acquisition, which follows our announcement last year of a new 10 year gas supply deal with Norway and acquisition of assets from Statoil, underlines our commitment to invest in North Sea production and secure future energy supplies for the UK”.

Back in November, Centrica signed a deal with Norway worth £13bn. The deal involves the supply of gas from Norway starting in 2015. The company also announced that it had acquired £1bn worth of development and producing assets in the North Sea from Statoil. Combined with the Statfjord acquisition Centrica will have increased reserves by almost 40% and increased production by over 30%.

Welsh Firm Wins Turbine Tower Contract

Posted on January 27, 2012 by Emma

A Welsh firm has won a contract to build 35 wind turbine towers for various sites within the UK.

Mabey Bridge, based in Chepstow, has won a multimillion pound contract to build wind turbine towers for various wind farm sites in the UK. The company signed a deal with the Germany company Nordex and as a result Mabey Bridge has taken on 45 new members of staff and moved 50 to its factory in Chepstow.

The business said the contract was a boost for its staff after a challenging 2011. Fourteen of the towers will go to the Pant-y-Wal wind farm in Rhondda while the rest will go to sites in Scotland.

The company opened in May 2011, creating 240 jobs at the factory in Chepstow which has the capacity to manufacture 300 towers a year.

Staff will work round the clock on the project to build 35 towers, starting in February and 170 staff will be involved in the project.

The towers will be the first to be made by a Welsh company, to be installed in Wales. While 14 of the towers will be erected at Pant-y-Wal wind farm, the rest will go to the Baillie wind farm near Thurso in June.

When operational the turbines will have the capacity to generate enough electricity for around 60,000 homes and small businesses.

Alex Smale, the UK director of Mabey Bridge said “To put this into perspective last year the UK wind market was less than 250 towers so this is a really significant order. All of these towers will be made in Wales. The towers you see around the country have historically been made in northern Europe – not even in the UK at all”.

Cheryl Gillan, the Welsh Secretary, welcomed the announcement and said “This is not only excellent news for the economy in Wales, but for the UK’s renewables and manufacturing industries as a whole. The awarding of this contract is a clear demonstration of the confidence European countries continue to have in the talent, expertise and skills of our workers here in Wales”.

Businesses Need To Cut Energy Costs

Posted on January 26, 2012 by Kathryn

Business energy prices are rising and it’s never been more important for businesses to cut their energy costs.

Businesses are facing both energy price rises and the need to reduce their carbon emissions so it’s no surprise that it’s never been more important for businesses to cut their energy costs.

Average wholesale electricity prices have doubled over the last 10 years but it’s still possible to cut energy costs in a few ways. For example, many businesses are looking at generating their own electricity via sources of renewable energy. Some businesses are having solar panels installed to help reduce electricity costs and any extra electricity generated can be sold to the grid.

Many businesses, if they are unable to generate their own electricity are choosing green energy suppliers such as Ecotricity or Good Energy. Some are choosing to go green even if this isn’t the cheapest option. Policy adviser at the Federation of Small Businesses (FSB) said “The growing importance of ‘being seen to be green’ means that even the smallest of businesses want to demonstrate their green credentials to their customers. We have seen a growing interest in small businesses wanting to source their energy from smaller green energy suppliers”.

However, if you’re a small business and not in a position to install energy generation systems and find green energy suppliers too expensive then the least you should be doing is shopping around for energy suppliers. However, most SME’s are not acting and research suggests that small businesses are wasting £2bn a year by not comparing energy prices.

In addition to comparing business electricity prices and business gas prices small businesses can also cut energy costs through improved efficiency. This is something the smaller energy suppliers are keen on and the CEO of Good Energy, Juliet Davenport, said “Good Energy places a strong emphasis on offering energy efficiency advice and customer service. Our customer care team was the first to be trained in the EST (Energy Savings Trust) endorsed energy efficiency advice standard”.

Ecotricity tries to install smart meters at all of its business customers’ sites as does First Utility. Smart meters ensure businesses only pay for what they have used and mean more accurate billing. They also enable businesses to identify where they could cut down on energy costs.

Monitoring energy usage will help businesses to cut their energy consumption and therefore their energy costs. But it’s still the case that the majority of businesses don’t compare business electricity or gas and therefore are paying far more than they should be for their energy. In the current economic climate can anyone afford not to compare prices and switch if necessary?