npower’s Wayne Mitchell on energy efficiency for manufacturers

Expectations – and challenges – running high for manufacturers A healthy manufacturing sector is essential for a robust economy, which perhaps explains why George Osborne has set a target of […]

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Expectations – and challenges – running high for manufacturers

A healthy manufacturing sector is essential for a robust economy, which perhaps explains why George Osborne has set a target of doubling exports to £1 trillion by 2020. But while the economy appears to be recovering – recording 1.9% growth in 2013 – manufacturers will need to increase annual exports by 9% each year to meet the Chancellor’s goal.

In a sector particularly vulnerable to increases in commodity costs – and energy in particular – this is clearly going to require some clever moves to achieve. EEF, the Manufacturers’ Association is focused on providing a comprehensive range of support and has collaborated with npower for help in producing its latest report, Energy Efficiency and Challenges.

The manufacturing sector already leads the way in showcasing energy savings. Over the last two decades, manufacturers have improved their energy efficiency and helped to reduce greenhouse gas emissions by almost 40%, while maintaining the same level of output.

Policy costs to add 66% to bills

Cutting costs is, of course, a huge driver. And with the government estimating that the growing impact of its green policies could add as much as 49% to the electricity costs of medium-sized businesses by 2020 – and 66% by 2030 – finding more savings is essential to remaining competitive.

We know, for example, that by 2020, UK steelmakers can expect to pay over 280% more for the impact of government policies on electricity prices than American and Russian competitors.

So this report looks at what more can be done – and the barriers that prevent manufacturers from implementing a full range of efficiency measures.

You can access a free copy of this report here. But if you’d like a quick preview, here are a few of the key facts that stood out for me:

• The most popular measures being implemented are energy efficiency audits (61%), lighting efficiencies (58%) and manufacturing process efficiencies (46%).

• Most manufacturers know where to seek help – with consultants, specialist organisations such as the Carbon Trust and suppliers top of the list. Only 6% say they would not know where to turn for advice.

• The main reason for not adopting efficiency measures is the payback period being too long – two thirds of manufacturers say they require a payback period of three years or less.

• Additional barriers include other investment priorities and a lack of time or expertise.

How to manage energy wisely

The report also includes a range of tips to manage energy wisely – from setting efficiency-based KPIs to reducing grid consumption. You can access these for free by downloading the Energy Efficiency and Challenges report here.

I’m sure you’ll agree, it makes for interesting reading…