Energy saving for competitive gain

"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,” he continues. “It’s a big untapped opportunity for companies to get a competitive edge. We are working with around 50 firms at the moment and we expect to reduce their energy consumption by 25 per cent. The payback period is typically 18 months to three years and, even if a client can’t foot the upfront bill for introducing energy-saving measures, we can fund the initial capital cost and let future energy savings take care of that expense.”

Many energy companies point to energy-saving measures, rather than renewables, as initially 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 and was €25,000 up after a year. They can now look forward to annual energy savings of €60,000,” says Fergus Wheatley, managing director of SmartPower. “Getting an energy efficiency audit done really is a no-brainer.”

But, once a company has changed all their light bulbs to LEDs, put efficiency monitors on pumps and ensured their heating and air-conditioning systems are not competing with each other, the next step in terms of energy efficiency is renewables.

“A number of renewable energy technologies are about to happen, scale up and offer Irish business a significant opportunity to reduce their costs and gain a competitive edge,” says Walsh.

Principal among these are electricity-generating solar photovoltaic panels which Bord Gáis Energy says are becoming "more and more cost effective" due to a reduction in technology costs being driven by global demand.

Solar energy

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, Stanford 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 starting to move into this space. Kingspan Insulation in Castleblayney, Co Monaghan, installed what's currently the largest solar PV system in Ireland of 300kW in 2015, but Butlers Chocolates is currently putting in an even larger 420kW system at Clonshaugh in Dublin.

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.