By Brad Groves, chief executive and chairman of Great Annual Savings Group
Energy Secretary Amber Rudd made a headline-grabbing announcement recently when she said the UK would close all of its remaining coal-fired power stations by 2025. Her big idea is to build a new, cleaner infrastructure that will provide greater security of energy supplies.
The announcement was backed by green campaigners, who are lobbying for more energy generation from renewable sources such as wind and solar. But with coal still supplying around one fifth of Britain’s overall power, there are fears that the lights could go out without sufficient volumes of alternative supplies such as gas, nuclear, biomass, solar and wind.
This uncertainty has had a profound effect on energy prices, which in the last few years have been up and down like a yoyo. It has forced companies and householders to find ways of reducing their energy consumption – and therefore their costs – to cushion themselves against sudden steep price hikes.
The Ramside Hall Hotel & Golf Spa in Durham is one of several companies that have taken steps to reduce their annual energy bills. Last year the prestigious leisure venue entered a three-year contract with Great Annual Savings Group (GAS) in a bid to cut its soaring energy bills, which amount to around £800,000 a year. Since then GAS has renegotiated Ramside’s electricity and gas contracts, resulting in a saving of more than £60,000, and over the period of the contract the hotel will expect to make savings of up to £250,000. That will allow the company to reinvest the money in other parts of the business, which is currently ploughing ahead with a £16m investment programme.
Good energy management is not just about renegotiating utility bills, however. There are other ways in which businesses can actively reduce their energy consumption and improve their carbon footprint.
Conducting an audit that looks at energy costs associated with a company’s buildings, facilities and industrial processes can highlight how efficiently energy is being converted and used – and identify any areas where costs are being haemorrhaged. That allows companies to make necessary improvements – streamlining processes, for example – which can further cut energy bills and carbon emissions.
Many companies have no mechanism to monitor their energy usage, which can often lead to a nasty surprise when the bills flood in. By installing a suitable monitoring kit, MDs and CEOs can generate a clear, concise picture of how much energy is being consumed in different areas of the business at particular times during the day.
Companies should also think about reducing costs in other areas. Could they, for example, renegotiate better deals on their insurance and telecommunications contracts? Also, could they create a training and development plan for staff so they’re encouraged to use energy sensibly and make savings wherever possible, such as turning off PCs and switching off lights?
Steps should be taken to reduce every variable cost across the business – and collectively the savings could run into tens of thousands of pounds, even for a small business.
In this era of austerity, cost control is just as important as generating revenue and new business. Significant savings will dramatically improve the financial performance of a company, making it more profitable and sustainable in the long run.
For further information about Great Annual Savings visit www.greatannualsavings.com.