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Energy pricing. Renewable energy solutions, such as solar PV systems, are excellent technologies that address these issues effectively:
Cost savings: The cost of renewable energy systems has reduced drastically over the last ten years. For example, rooftop solar PV panels pay back their cost in three to six years with a lifetime cost of energy of approximately 5 to 7p / kWh. For industrial manufacturers, this can result in tremendous cost savings in energy-intensive operations.
Price stability: Factory units can generate 25 percent to 40 percent of their total energy needs in-house through the installation of renewable energy systems. This independence reduces exposure to the volatility of grid energy prices, allowing producers to stabilize manufacturing costs and reduce finance risks.
Lower carbon footprint: Renewable sources like solar PV make use of natural and renewable inputs to generate power. This helps the manufacturer reduce their carbon footprint by a large margin compared to using grid electricity to supply their requirements, as desired by sustainability goals and regulatory needs.
Option 4: Applying sophisticated energy purchasing strategies
Electricity and gas, like other major commodities, are traded daily on open markets by a network of traders. Many manufacturers rely on fixed contracts, committing to energy supply for 12 to 36 months based on prices set on a single day. While this approach provides some budget certainty, it also exposes businesses to risks from market price fluctuations.
A more strategic alternative is a flexible purchasing framework. This method allows manufacturers to make energy purchasing decisions over an extended timeframe, capturing opportunities during favorable market conditions and unlocking potential cost savings.
Given that energy is a significant expense for manufacturers, it should be managed with the same level of sophistication applied to other large-scale procurement decisions. By leveraging flexibility and market insights, manufacturers can better manage risks, reduce costs, and enhance operational efficiency.
Spotlight on Silverline office equipment:
Silverline Office Equipment, a leading manufacturer of office furniture, partnered with Advantage Utilities to enhance sustainability and reduce energy costs. Through a comprehensive audit, Silverline implemented Solar PV panels, voltage optimization, and a flexible purchasing framework. These measures resulted in a 58 percent reduction in energy consumption, cutting CO 2 emissions by 172 tonnes, and achieving cost savings of £ 671,753 in 2022.
With economic pressures set to continue, manufacturers should look to tried and tested solutions to bring down their energy costs. From site audits and more efficient infrastructure, through to renewable generation and sophisticated energy purchasing, manufacturers should follow in the example of Silverline Office Equipment as evidence of what’ s possible – significant savings and impressive sustainability gains. ■
Dr. James Crosby-Wrigley www. advantageutilities. com
Dr. James Crosby-Wrigley is Head of Sustainability for Commercial and Industrial Energy Supply and Usage at Advantage Utilities. With a Ph. D in Geochemistry, Geological and Earth Sciences / Geosciences from the University of Cambridge, Dr. Crosby-Wrigley now offers business support to a range of companies looking to achieve net-zero and manage their energy costs through sustainable energy solutions.
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