JUSTIN COMISKEY finds that often quite simple energy saving measures can make significant bottom line contributions.
“There is a really compelling business case for companies to make energy savings today,” says John Walsh, who heads up the ESB’s recently established Smart Energy Division which brings the semi-state’s considerable suite of energy expertise to bear on reducing consumption. “Companies really don’t appreciate the scale of the opportunity that’s open to them to reduce their energy costs. It’s a big untapped opportunity to get a competitive edge.”
The ESB’s Smart Energy Division is working with around 50 firms at the moment and expects to reduce their energy consumption by 25 per cent. Typically, investing in energy saving measures pays for itself in 18 months to three years – well within the return on investment horizon of most companies. And, even if a client can’t foot the cost of introducing energy-saving measures, Walsh says they can fund the initial capital cost and let the energy savings going forward take care of the expense.
Many energy companies point to energy saving measures, rather than renewables, as currently offering the biggest bang per buck invested. Charlestown shopping centre in Finglas, for example, is bagging annual energy savings of €60,000 after introducing a range of energy-saving measures recommended by energy consultant SmartPower. These measures, after grants and energy credits were deducted, cost the centre €35,000 to introduce.
“The interesting thing about the Charlestown project is that the client got their money back after seven months, was €25,000 up after a year and can now look forward to annual energy savings of €60,000,” says Fergus Wheatley, MD of SmartPower.
Companies really don’t appreciate the scale of the opportunity that’s open to them to reduce their energy costs
“Getting an energy efficiency audit done really is a no-brainer. It’s mind-boggling that it’s not more widely known how much money can be saved by property owners and those leasing buildings.”
So how does an energy audit work?
At Charlestown, Wheatley followed the “excellent” EXEED process championed by the Sustainable Energy Authority of Ireland. This sets out a framework for identifying energy savings by challenging the initial energy design spec so it can be determined why energy is being used in an area and whether reducing this energy would still do the same job.
Once these questions have been assessed, the on-site energy equipment (lights, fans, air-conditioning, heating, pumps, etc) is investigated. At Charlestown, it took Wheatley about two weeks on site to work out how all the centre’s various energy systems worked and interacted with each other. “Then I could determine if, for example, the heating and air-conditioning systems were in competition with one another and using too much energy as a result?”
Dan O’Connor, centre manager at Charlestown, says EXEED was “very useful” in identifying energy efficiency projects. “One notable example was with the basement car park lights where we identified areas that needed light and areas that could be reduced. The outcome was a two-third saving in capital cost while nearly doubling the energy savings from an earlier proposal that we had from another vendor. We also identified that due to poor controls we were wasting huge amounts of energy heating hot water for the toilets, which were upgraded as part of the project.”
Among the key energy saving changes made at Charlestown were: installing LED lights in mall areas, car parks, loading bays and residential spaces (LED bulbs are up to 90 per cent more efficient than traditional incandescent models); fitting a new how water cylinder which reduced use of the district heating pump; introducing variable speed drives on the district heating pumps meant the pumps no longer had to work at 100 per cent during the summer months; and upgrading boiler controls allowed for more efficient use.
It was also found that rain blown onto sensors on the centre’s automatic doors caused them to open with consequent loss of hot air during the winter. This issue was resolved by installing rain covers over the sensors.
Another problem was that, as Charlestown’s mall roof is made of glass, the centre experiences significant solar gain on sunny days which then places increased demands on the air-conditioning system. By installing a new controller with rain and light sensors to control the roof vents, a “chimney system” to naturally vent the building is now used to reduce energy consumption.
David Willis, energy service manager at Electric Ireland’s Business Markets division, says they have worked with a variety of third-parties to provide simple energy saving solutions such as “energy monitors, smart heating controls and an analysis of bills” to identify areas for savings.
“We have assisted GAA clubs, shops, hotels and other Irish workplaces to install more energy-efficient lighting, heating, air-conditioning and refrigeration plant, and reduced their bills by €300,000 per year,” he says. “A typical small business, spending less than €25,000 a year on energy, might expect to save 50 per cent of their lighting bills by installing LEDs, save 20 per cent on their space heating bills by installing boiler optimisation and some insulation, and a further 5 per cent of their total bill through monitoring and good staff practices. This leads to a saving of about €7,500 a year and will likely pay for the work carried out in under two years.”
But, once a company is lean in terms of energy-saving measures, the next energy efficiency step is renewables where a number of energy technologies are about to happen, scale-up and offer Irish business a significant opportunity to reduce their costs and gain a competitive edge.
Bord Gáis Energy points to electricity-generating solar photovoltaic panels as becoming “more and more cost effective”. Solar energy is essentially a digital technology and, just as the power of computers is increasing exponentially, so is the output of solar panels while their cost of manufacture is typically falling by 5-10 per cent per annum. In fact, in many parts of the world it is now far cheaper to generate electricity from solar than fossil fuel sources and, as a result, traditional power utilities and oil companies are facing a wave of disruption. Solar is improving its cost position relative to fossil fuels so quickly that one leading energy expert, Standford university lecturer Tony Seba, believes it’ll all be over for fossil fuels by 2030.
Evidence of a shift to solar comes from Kingspan ESB, a joint venture between the ESB and solar panel manufacturer Kingspan to offer “Funded Solar”. This allows businesses to install, without any upfront capital costs, a state-of-the-art solar photovoltaic system to generate electricity and make productive use of otherwise idle roof space.
And Irish companies are moving into this space. Kingspan Insulation in Castleblayney, Co Monaghan installed what’s currently the largest solar PV system in Ireland of 300kW in 2015 while Butlers Chocolates is currently putting in an even larger 420kW system at Clonshaugh in Dublin.
The cost of installing renewable energy sources has plummeted in the last few years and we are now seeking a scenario where a solar PV installation will pay for itself within six to seven years
Cormac Mannion, energy services manager at Energia, says there are “quite a few options” for Irish businesses looking to engage with renewable energy. “These include solar thermal and solar photovoltaic panels, biomass boilers and combined heat and power units, and wind energy. Also, an interesting option that is available to businesses is heat pumps. However, it is important to realise that not all of these options are ideal for businesses and site suitability is one of the primary factors that drive such an investment.
“But the cost of installing renewable energy sources has plummeted in the last few years and we are now seeking a scenario where a solar PV installation will pay for itself within six to seven years. While this may seem like a long time for many businesses, the key advantage is that it can act as a hedge against a scenario where energy prices rise. That in itself makes the proposition far more attractive. Also, many of these technologies may become far more cost effective with the introduction of the Renewable Heat Incentive which is expected to be introduced before the end of 2017.”
While the range of energy-saving solutions can be bewildering and the jargon confusing, the bottom line is that energy-saving now contributes handsomely, and quickly, to a company’s finances. Choosing an appropriate renewable energy source can compound the energy-saving effect and give companies a strategic advantage going forward. D