Cash, kilowatts, carbon – how to save energy effectively

When it comes to reducing energy, most businesses tend to approach it in the wrong order. I appreciate this is a bold statement, but please bear with me.

Organisations looking to make a difference – and generate some headlines in the process – typically opt for investing in carbon-saving renewable energy as a first step. But this rarely equates to the best use of investment, or makes the most commercial sense in the long run.

I often use the phrase ‘cash, kilowatts, carbon’ as a guide to help the businesses we work with decide what to focus on, and the order in which to do it in.

Step one: generate cash

So first up is cash. If you want to save energy effectively, you’ve normally got to spend some money to do so. But most businesses can release some cash from what they are already spending to fund this investment relatively quickly.

How? There are two simple solutions.

The first is to switch off what you’re not using. Sounds obvious, but very few people remember to do this. The easiest way to save money is to switch something off when you don’t need it (or install control systems to do this automatically). Whether it be lights, heating, pumps, fans, motors, office equipment… This immediately generates cash savings.

The second way is to buy smarter. Negotiate a better deal, hedge over a longer period, switch from fixed to flexible purchasing… Our Optimisation Desk provides award-winning support and expertise to help customers buy smarter. This includes to our own npower energy team, who now save around 10% a year on energy costs since moving from a fixed to a flexible contract using Direct Budget Management.

This initial step takes you from a position where you had a level of energy consumption – point A – to a position where you’re using the least amount of energy and equipment that you need – point B. Next up is looking at kilowatts.

Step two: kilowatt efficiency

Kilowatt efficiency is all about investing your money to get the most kilowatts out for the minimum kilowatts in. This is where some investment is required to ensure that the things that you do are done as efficiently as possible.

So spending money on more efficient lighting, better motors, time-saving equipment etc. For example, if you currently have a boiler that’s 60% efficient, invest in a boiler that’s 80% efficient.

Of course, if you’ve already saved money by reducing waste, then this helps to free up the cash to pay for the necessary upgrades.

By the end of this stage, you should have created a business that’s as efficient as possible, where you are buying energy smarter, have reduced energy waste by switching things off, and then are doing what you need to do as efficiently as possible.

So now, we are ready to deal with carbon.

Stage three – cutting carbon

The first two stages will have already reduced your carbon emissions. Now, with your energy consumption the smallest it can be, you’re in the best shape to look at investing in reducing your carbon footprint further still, be it by installing onsite wind power, solar, biomass – or something else.

Had you invested in carbon-reducing technology on day one of this process, how could you know if you’re installing the right capacity to meet your future needs? But looking at this last helps you ensure you’re opting for the most efficient solution in terms of energy generation and carbon reduction.

From home to big industry
These three steps make sense for anyone – be it you as an individual looking to reduce energy at home, to the likes of our customer Tata Steel driving maximum efficiencies in the workplace.

Of course, this process can be expensive and time-consuming. But as a concept, it’s really quite simple.

Switch it off, do it more efficiency, then go for low carbon.

This is a sponsored article.