The cheapest unit of energy is the one you don’t use, goes the saying. While it may be not be easy, energy efficiency is crucial for any and every business. Jodie Eaton, CEO of Shell Energy UK, discusses how food and drink manufacturers can improve efficiencies, decarbonise operations and streamline spending.
According to the British Retail Consortium (BRC), energy costs comprise up to 15% of all overheads for a typical food and drink manufacturer. Alongside core production, this includes use across building services, computing, transport and administrative activities.
As a result, it is estimated that every kilogramme of food destined for the retail market requires almost 100 megajoules (MJ) of electricity to produce – the average equivalent daily energy use of a three bedroom family home.[1]
Alongside the obvious challenges posed by a fluctuating wholesale energy market,[2] high raw material costs are also putting pressure on manufacturers, with the industry squeezing margins wherever possible to contain snowballing prices. But absorbing costs that would otherwise be passed on to consumers is often just a short-term option. Moving forward, food and drink manufacturers would benefit from maximising operational efficiencies – starting with energy – as a way to offset volatility, inflation and other rising overheads.
Harnessing organisational opportunities
There are huge opportunities for businesses to transform their energy use. However, it is important to have a clear focus on energy efficiency that goes far beyond procurement and involves all aspects of operations. Done well and with disciplined management, this can help to mitigate the pressure of costs and help to decarbonise operations.
Insight from the International Energy Agency suggests that businesses can reduce their energy demand by 10-40% through a comprehensive review of every aspect of their consumption.[3] For food and drink manufacturing businesses exposed to rising costs in their supply chains, this is a real opportunity.
But how can businesses take advantage? Well, the first step is accessing accurate and reliable metering, including the collection of data and recording of measurements. After all, if you don’t know when and where you are using your energy, it is almost impossible to maximise efficiencies.
From here, reducing energy consumption is the next step. For example, is it possible to move high energy processes to lower tariff times, such as manufacturing at night or packing during the day? Can you switch equipment off when it is not being used? Can you move production hours away from peak times to benefit from lower unit rates?
Tackling these questions will likely highlight wider inefficiencies, flag areas of waste, identify areas for improvement and reveal opportunities for immediate savings. Applying this insight practically will deliver widespread benefit. For instance, considerations include whether to invest in more energy efficient plant equipment, change existing lights for LEDs, look for opportunities to use heating and cooling more effectively, install control systems, change your motors and pumps for more efficient models, double glaze your windows or insulate your roof space.
Another option is the installation of occupation sensors that will automatically switch off lights in empty rooms and adjust heating levels in accordance with building use. This guidance is echoed by the Food & Drink Federation (FDF), which has called on members to prioritise energy efficiency measures and opt for flexible energy solutions.[4]
These tactics will undoubtedly require upfront investment but, payback begins when new equipment is first turned on, not just financially but also in reducing your carbon emissions.
Embracing a partnership approach
While positive progress can be made alone, bringing in external expertise can help to rapidly accelerate progress. At Shell Energy, we work in partnership with some of the UK’s leading food and drink producers to develop and support targeted energy strategies that help to streamline spend and set out a pathway towards achieving decarbonisation ambitions.
Making this transition is challenging, making trust and collaboration with an experienced and reliable energy partner key. Long-term strategic objectives are major considerations, but keeping a close eye on activities to achieve short-term cost savings is equally important.
There is no silver bullet solution when it comes to optimising efficiency and bringing energy use under tight control. Yet failing to plan or relying on a reactive approach can leave end-users open to changing regulation and fluctuating market prices. After all, energy is no longer simply an overhead, it is inextricably linked to commercial success.
To find out more about how Shell Energy can support your business, visit www.uk.shellenergy.com.
[1] https://www.theconsciouschallenge.org/ecologicalfootprintbibleoverview/food-and-energy
[2] https://www.cornwall-insight.com/press/price-cap-forecast-to-remain-above-current-level-until-end-of-2024/#:~:text=Forecasts%20for%20the%202024%20Default,%C2%A31%2C929%20in%20April%202024.
[3] https://www.iea.org/reports/coping-with-the-crisis-increasing-resilience-in-small-businesses-in-europe-through-energy-efficiency
[4] https://www.fdf.org.uk/fdf/what-we-do/environmental-sustainability/ambition-2025/ambition2025-case-studies/
