Procurement · 25 January 2016

How the business community could save hundreds of millions of pounds when it comes to energy costs

Even small changes can bring about big savings
Even small changes can bring about big savings

Chancellor George Osborne’s 2015 announcements may not have offered small businesses much in the way of help with energy costs, but there are still certain ways that bosses can ensure savings are made.

It was revealed in March 2015 that The Chase Golf Club in Staffordshire had decided to try and reduce its energy costs. At the time, owner Chris Simmons claimed that many SMEs simply shrug energy off as a necessary cost.

But he explained: “Having more control over the amount of energy you use – and the effect on the bottom line – is a great comfort when running a complex business.”

His remarks were backed up by npower’s Business Energy Index, which noted that 53 per cent of SMEs in the UK had no methods in place to manage efficiency and energy costs in 2016.

Patrick Harvey, head of customer loyalty at npower, claimed that for SMEs, the greatest driver for increasing energy efficiency is cost, rather than the environment.

“This is why it is surprising that so many employers are still not measuring the positive impact that implementing energy efficiency measures can have on their business,” he said. “The results of the research show the huge untapped potential for SMEs to both reduce emissions and increase savings.”

Furthermore, a joint research project by the Energy Efficiency Financing (EEF) scheme and Carbon Trust, found that British businesses were wasting £414m a year on energy costs.

The findings, based on data which looked at each sector’s use of lighting, heating, hot water, cooling and ventilation, concluded that UK SMEs were overspending on energy bills by £82m a year.

This, it suggested, was in part due to out-dated systems and inefficient equipment.

By investing in energy-efficient equipment as well as renewable energy technology, businesses could reap significant energy savings and cut down on energy costs, explained Myles McCarthy, managing director of Carbon Trust Implementation Services.

He said: “Any sort of green investment is a step towards saving money, improving business competitiveness and being a responsible citizen. Companies that recognise the long-term benefits brought by energy efficiency will no doubt be better positioned than the competition to grow more sustainably and profitably.”

It was also suggested that employers would benefit financially by performing audits on their use of energy within the workplace. On the other hand, firms could also start off small by simply installing energy-efficient light bulbs and turning off computers at the end of work.

“One of the simplest ways you can save money during the colder months is to get your water clock settings right,” suggested NatWest Mentor’s senior environmental consultant, Thomas Ridgeley. “When on 25 October 2015 the clocks went back an hour, the first thing you should have done is make sure the timings were still correct, otherwise you’d have ended up heating water when you didn’t actually need it.

“And while the sun might only play a cameo role in our lives, it is important not to let darker days translate into wasted energy. The lights are more likely to be on during winter, which means you should be extra careful to turn them off as you leave the room, even if you’re planning on returning in a few minutes.”

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Marcelino Castrillo is MD of business banking at RBS in September 2015.   Prior to to that, Castrillo was MD of SME banking at Santander, where he was responsible for leading the challenge of scaling Santander’s business bank and managed the business through a period of significant change.