Champions Round Table
Energy and the environment
With more and more emphasis on businesses playing their part in saving the environment through carbon reduction schemes, installing renewable energy and implementing green initiatives, this month’s round table, organised by Destination Chesterfield, focussed on what businesses are doing and can do to both play their part and save money.
Hosted by Cost Advice, the round table brought together experts involved in the town’s sustainability sector to discuss what the town and businesses can do to play their part.
Sitting on the panel this month were:
AB – Ashley Booker – Acting Group Editor, Derbyshire Times
MB – Matthew Brailsford – Director, Custom Solar
DN – Debbie Nixon – Membership Manager, UKATA
BG – Ben Garstang – Deputy Land Agent, Chatsworth Estate
IB – Ian Bates – Forums Secretariat Manager, East Midlands Chamber
PS – Paul Staniforth – Group Leader Development Management, Chesterfield Borough Council
IF – Ivan Fomin – Managing Director, MSE Hiller
IO – Ian Osborn – Solicitor of Business Services, Banner Jones Solicitors
SB – Stephen Ball – Director, Cost Advice
LA – Lee Ashley – Sales Manager, Spire Recruitment
- What measures do you think businesses should take to reduce energy consumption / carbon emissions?
SB: The easiest, fastest and most cost effective way for businesses to reduce energy consumption is to look at their processes or procedures. If there’s any wastage, try and cut it out. Even simple things like turning lights off can make a real difference.
IB: Continuous improvement and incremental improvement in certain areas soon develops into something that works. Getting buy-in from management and the financial directors on green initiatives makes a big difference.
DN: A lot of it is about awareness as well. Some staff may not be aware of the things that they need to do in a company to manage energy or emissions. At the Markham Vale Environment Centre, we get updates via email on what is happening and how you can do your bit. Should workplaces consider having energy champions to motivate their staff? The little things people do in the workplace add up and make a difference.
AB: In our office it’s an issue. Obviously working in a newsroom a lot of people just leave their machines on at night.
IF: Do you think this is down to individuals or do you think change should be led by senior management?
BG: The answer is to do both. Lord Burlington, the heir to Chatsworth Estate, got involved in our green project. Engage the workforce on the floor who could do the day-to-day activities but also the higher level management team, which has to step up and take responsibility and put in place a structure. By raising awareness within our own sphere of employment and people we work with, we’re driving energy savings of between five and 15%.
MB: It’s about auditing and monitoring as well. Lincolnshire County Council has a ‘turn-off project’, where for one hour every year they turn off the electricity in all the schools across the county. Because they’re monitoring the usage before and during the turn off, they know exactly how much money is being spent on energy.
Monitoring is key because it gives businesses an understanding of what their energy consumption and carbon emissions are genuinely like. We went through an environment audit ISO-14001 recently to fully understand our impact on the environment. We discovered that small businesses can’t really change much, however larger organisations can make a big impact.
IB: There are energy saving obligations for large businesses with a certain turnover. The government thinks that by going through a monitoring process they will see the benefit, and thus implement changes. What we have found is really powerful to encourage businesses to make changes are case studies; giving examples of what real companies have done and the money they have saved. Reducing energy costs long term and should be viewed as an investment and not a cost.
DN: Do you think that if it was mandatory then people would implement changes?
MB: The government did introduce a mandatory energy assessment scheme for organisations in the UK (ESOS). As it has found, it is difficult to put mandatory changes onto businesses, particularly across every sector. You have to find the people within the business who are prepared to change the processes. It is a slow moving process.
SB: The thought was there from the government to try and get business people to think about ways to reduce energy and carbon emissions but they made it way too complex.
IF: Do you ever come across people with the view ‘I want to reduce my carbon emissions because it’s the correct thing to do, regardless of cost.’ Or is it all about money?
MB: Money is a driver and it’s also driven by the demands bigger businesses place on smaller business. Some want them to have carbon reduction schemes in place before they award contracts. We’ve seen those scenarios happen with a number of our clients.
IB: There is an element of force that comes into play in the supply chain. A lot of smaller businesses are dropping out of the markets of these supply chains because they don’t know where to start with reducing their carbon footprint. If you are a small business and want to do business with the big players, you need get ahead of the curve. Proving your green credentials opens up more markets to businesses; so it is a benefit.
IF: We deal with water companies and large food companies, so when we built a new facility at Markham Vale, we made sure it was green and that we were able to measure our carbon footprint. However, at the end of the day, when you’re bidding for work, they tend to go for the cheapest quote regardless of whoever is greenest or has the lowest carbon emissions. But, because of the building we’ve built and the low cost of operations, and investments we we’ve made, we’re saving money so can often afford to be the quote that is cheapest.
DN: It might be that the bigger companies will drive the initiatives and filter them down to smaller businesses.
MB: I think it will. For the first time ever last month renewable energy usage outshone coal for the first time since the 19th Century. Change is happening, it’s just a very slow process.
BG: Sustainability is on our agenda because Chatsworth is a long-term estate under long-term stewardship. We’ve been looking after the estate for more than 300 years and it’s an on-going process.
IO: Energy cost savings depend on your property. Chatsworth Estate is hundreds of years old and fairly limited as to what it can do to the fabric of the building, however for new build properties it’s a completely different story. However, where a building is rented then the landlord who may not particularly be interested in retrofitting green measures, particularly if it’s just an investment property where they’re just turning round a rent.
SB: We experienced this a year ago when we investigated having solar panels installed on our rented building. The building is owned by a pension fund which can’t hold solar panels as an asset. So, we had to make a choice whether the business purchased the solar panels and put them on a roof that isn’t owned by the business. It put a damper on the whole thing.
BG: We had the same story with a let property on the estate with a modern building, which we should have been able to build on to. But actually, the advice we received from surveying firms and the solicitor’s firms is that we shouldn’t do it, because it negated terms of the lease and void any terms we put in place with regards to the roof and the structure.
IB: With leasing though there are Energy Performance Certificates (EPC) regulations coming in to force in April 2018, so that will impact on landlords.
IO: They are going to change things in terms of the obligations that people have but will go unnoticed for at least three years for a lot of companies, before someone comes along and says ‘you need to do that’.
SB: The government have got enough stick approaches now – carbon reduction commitment, Energy Saving Opportunity Scheme (ESOS), and penalties if you don’t carry them out. The carbon reduction commitment is being scrapped in 2020, but in my opinion that’s too far away. The income from Carbon Reduction Commitment (CRC) is simply going to push the cost up of the climate change levy, so instead of big businesses having to incur that cost, everyone’s incurring that cost now. There needs to be a ‘well done you’ve reduced your energy consumption’ initiative
IB: The problem is the government has a different stick every week. There’s no long-term energy infrastructure planned and that needs to be apolitical. But people think, ‘well I’m not going to get involved with that because I’ve got burnt by the green deal’.
BG: We are lucky that nine times out of 10 we actually self-fund our investments. But for businesses that need to go out and get finance for green investments, the risk of tariffs dropping means there are not many businesses or people who actually invest against those.
MB: In terms of measures businesses should take to reduce energy consumption or carbon emissions, it boils down to them monitoring what you do, decide where they can make some changes and, if they want to make some changes, make sure they’re financially viable for their business. If you tick all those boxes, you’ll do something.
2.Energy costs have a major impact on running businesses. How can organisations ensure that they are getting the most cost effective energy for their business in the future?
SB: We see too many businesses that don’t compare energy deals properly. And it is generally the bigger users. Often they think they’re getting a good deal but we’ll find that the deal they’re on is what’s called a ‘pass-through quote’, that doesn’t include renewable energy obligations, feed-in tariffs, nor provisions for Electricity Market Reforms (EMR). We’ve seen too many opportunities missed. It’s customers like Academies that have gone from a public procurement approach to managing it themselves, that are really missing out.
IF: Is that the problem with the energy industry though, we shouldn’t need people like you?
SB: I can’t help but agree. We actually say that if the energy industry ran smoothly, we wouldn’t be here. We’re filling that gap. It’s not just whether you use gas or electricity, it’s how many people you employ, your turnover, your energy consumption in gas and electric, whether you are part of the CRC or have undertaken as ESOS assessment. People get lost and this when we get a lot of our business.
MB: There seems to be more energy companies that are springing up now to compete against the big six. The market is changing. We’ve noticed a few companies trying to steal a customer-base by putting some pretty good deals on the table.
SB: Unfortunately, they are offering very predatory pricing but only give it to you for a year relying on the fact that 80% of customers, will shop around when the renewal offer comes through the door. OFGEM was going to ban these offers, but they did a U-turn on it.
IB: Most people around this table probably use a comparison website for energy at home, but they don’t apply that at work.
SB: I don’t think it helps that energy is priced in pennies per kilowatt. It doesn’t sound like a lot of money, but when you add it all up, it is.
BG: We’ve gone through this whole process of brokering, and found that bringing us together as a group and being able to go to the market with a much larger portfolio, has really paid dividends. We’re paying substantially less than we were two years ago.
MB: I think that is an interesting concept. People could purchase power as a street, instead of a house, or a village instead of a country.
SB: We do that for a group of churches. One church does not have significant energy consumption but a group of 200 together, makes it an attractive option to suppliers.
DN: Do you think companies only come to you to review their energy consumption when they’re in financial trouble?
SB: Sometimes they do and we get quite a lot that come to us following a problem with a metre or a supply. One of the ways that customers can reduce their costs is by shifting demand and avoid using electricity during peak periods. However, not a lot of businesses can shift it that much to avoid them.
MB: We have seen electricity bills when the charge per kilowatt hour is say, eight pence. And the penalty for using power between 4pm – 7pm is another eight pence. To put that in perspective, it doubles your power cost during that time, which isn’t good news for a manufacturing plant which rebalances its machines between this time when everyone goes home.
SB: In terms of understanding energy, we find that a lot of businesses don’t take advantage of smart metering, or AMR, automatic meter reading. They should, because a lot of suppliers that have got great deals on it.
BG: Do you think we’ve gone past or are still in a period in which to purchase forward for electricity or gas? We fixed out prices back in February as we had a broker watching the market.
SB: Brexit has hurt the price because the pound has not done well against the dollar. Oil prices are going up, there’s another gas field in Norway that has come to the end of its life. So there’s a lot of factors now that are starting to affect the price. So customers that did lock their prices back in February, will probably look back and go ‘actually we did the right thing.’
3.What impact do you think government levies, such as renewable obligations, feeding tariff charges and energy market charges are having on business?
SB: All these extra levies are meant to incentivise businesses to not use as much energy. They now represent 50 – 55% of a customer’s electricity bill and that’s projected to go up to 65% by 2020. It’s a huge tax collection scheme for the government.
IF: Do you not feel that that incentivises people to generate their own power?
SB: It can do as it’s pushing them into a corner.
IF: Feed-in tariffs are changing so rapidly at the moment that it’s harder for people to make a longer term investment or even plan a project. The price of solar panels came down remarkably because of the reduction on feed-in tariffs. It has stimulated the market, but it’s a tax on consumers and it isn’t always essential.
MB: As the cost of electricity and gas continues to grow these levies will disappear because you can’t keep them in place and have a high grid cost. They’re only there to fill this gap. I hate most of these tariffs. They add a layer of complication to a market that isn’t complicated.
PS: We’ve seen a correlation between the fall in feed-in tariffs and the push to get consents through for solar farms. We’ve been pushing to get consent so they can claim the higher feed-in tariffs. So there’s certainly a number of businesses that have taken advantage of the more elevated feed-in tariffs that were available in the past. As feed-in tariffs gradually disappear, I suspect we might see fewer solar farms coming forward.
MB: Sadly, the levies that people concentrate on, are the renewable technology ones. When the sums are done as to what it actually adds to a person’s entire household bill per year, it’s only about 90p? There are other levies that will be added to bills, such as those for back up diesel generators to provide power when the Grid collapses, that will actually add £6 a year to everybody’s bill.
IF: But doesn’t the feed-in tariff mean that more of us will start putting in these low carbon devices anyway?
MB: I think it will. Feed-in tariffs for solar are going to end in 2019. You’ll only be producing your own power, or selling your excess power back to the Grid for a lot less than what it is selling electricity to your next door neighbour, so they are winning. With fewer power stations, the price of electricity will start to get a lot higher which will incentivise people to generate their own power.
IB: This goes back to taking energy out of the political agenda. A change in government, might bring changes in the renewable obligation. It’s not just about energy production, it’s about new technology for storing energy. These levies have got a place but people don’t understand what a lot of the levies are being used for. Renewables are clearly the way forward
4.What does your business do to minimise the impact on and maximise the benefit on the local environment?
LA: We’re a small enterprise, so we do simple things like ensuring plugs are turned off and recycling all of our waste properly.
SB: We use a local waste collector, so it doesn’t require them to do a lot of mileage in order to collect a bit of waste and they have a 0% to landfill policy. That policy was something that we were attracted to. We try and use as little paper as possible. We’ve recently integrated new software systems and that has reduced the amount of paper in our office by around 50%. We try and recruit as locally as we can based on what skills are available in the area. We purposefully haven’t moved offices that far because we didn’t want to have to start making people travel further.
IO: I’ve always been a really big proponent of a paperless law firm but, in practice, it’s impossible. It doesn’t just apply to law firms; it applies to all businesses. At some point you are going to have to have something on paper. On a very simple level you cannot sign a legal document electronically. We try and keep paper usage to a minimum.
IF: Changing habits can make a big difference but I think we should stop tormenting people about bits of paper and look at the broader opportunities. I think we were lucky when we built our new place at Markham Vale. The Building Research Establishment Environmental Assessment Method (BREEAM) model pushed us into making quite a lot of green investments, so we have ended up with a very well insulated building, air source heating, solar PV and water control. It’s a massive saving for us to operate our business from there. We used to have a building that was a third of the size which cost us about £25,000 a year to heat and run. We’ve now got a workshop that’s three times the size, plus 8,00ft of offices, which costs us £12,000 a year to run.
PS: It’s really good to hear that because that’s part of the ethos of the local planning authority’s perspective on the whole issue of creating sustainable development. We’ve adopted a core strategy which is designed to encourage buildings to come forward that are fit for future. We have to have these discussions with people right at the beginning, when they are planning their facilities. I regularly have discussions with developers about trying to make sure the fabric of the building is the best that can be achieved before we start talking about bolting on renewables. Get your building well insulated.
PS: Last week the council approved its first carbon zero homes in the borough, which are airtight to a very, very high level. The combined cost of electricity, gas and water for the complete year for each of these homes will be less that £100. Not every council thinks the same as us, but in Chesterfield we’re taking a proactive, positive approach to development because, at the end of the day, we know the local authority is going to have to be self-sufficient by probably 2020.
BG: Well I think as a group and as an estate, we’ve been in the area for a long period of time. Sometimes our impact on the environment is unavoidable. For instance, we have a lot of visitor traffic coming to Chatsworth House. What we do, do is try and manage the buildings we have, retrofitting fitting renewables, installing a biomass boilers and ground source heat pumps. We’ve also been looking at installing hydropower. In our Farm Shop we’ll always do our best to source from local suppliers.
When people come into our organisation, part of their initiation is that every employee of Chatsworth understands our green commitment. Staff can feedback into the green committee if they’ve got ideas. We’re also members Fit for the Future, which is an organisation which shares information, site visits and we look at other estates in terms of what they’re doing and try and learn from them.
MB: We do a lot of the little things within the business, we took steps to gain ISO-14001 accreditation a year or so ago, so we’re now environment 14001 holders. That has filtered through the business from transport, to paper usage, to how we operate on site. We are really trying to push the message of renewable power across Chesterfield.
DN: I think a lot of it is about awareness. I didn’t know there were energy brokers before you mentioned it or that you got money back from solar panels. This round table has been a bit of a learning curve for me.
http://www.chesterfield.co.uk/destination-chesterfield/champions/champions-round-table/
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Published on Wednesday 20th July 2016