Combined heat and power (CHP) is an “effective answer” to lower energy costs but savings could be lost without a “coherent” energy procurement strategy.
Director Mark Alston said: “By generating energy efficient electricity and heat off-grid, CHP owners’ demand for network electricity drops whilst gas consumption increases. In addition, actual CHP operating hours can vary from initial plans, again varying network demand. In these cases, organisations can be exposed to financial penalties as power and gas consumptions swing in and out of contractual tolerance bands.”
He adds: “CHP owners must keep forecast consumption under review – rather than relying on historical usage patterns so they can set new tolerance thresholds with suppliers as necessary. This might involve switching suppliers to find a more flexible ‘CHP friendly’ contract and a better price on gas supply.”
Mr Alston suggests moving to flexible contracts allows businesses to “re-forecast and re-align their purchasing strategy on a regular basis”.
Energy Live 2013 takes place on November 7th at the London Film Museum.