CESA advises on how to economise on energy costs

10 February 2006
CESA advises on how to economise on energy costs

When it comes to kitchen equipment, it's hard to remember any issue which has grabbed so much attention as energy efficiency. Energy costs have almost doubled in the past three years, and the problem with the purchase cost of energy is that, unlike the case of a steak or a portion of chips, it's very difficult to add in the energy cost to the menu price since energy is so difficult to cost out.

Little wonder that energy efficiency is one of the main themes of the equipment halls in Hotelympia, or that CESA, the Catering Equipment Suppliers' Association, has it as a theme running across members' stands at the show.

Hotel and restaurant chains have become acutely aware of the spiralling cost of energy in the kitchen. Speaking at last year's CESA conference, Whitbread's energy manager Paul Rogers outlined what his company is doing to reduce its £31m annual energy cost.

Steps include simple training of kitchen managers to turn equipment down or off when not being used and not to turn it on until it's needed. As an example of how these simple, non-scientific steps can result in real energy cost savings, Whitbread saw an 8% energy saving across its TGI Friday's estate in 2004.

Whitbread is one of a growing number of chain operators fitting energy-monitoring systems into kitchens. These record the amount of energy the kitchen is using, which can be cross-referenced to sales to identify units which are energy-efficient and those which may need further energy-management training.

Members of CESA, which make and distribute much of the equipment sold into professional kitchens in the UK, recognised the looming issue of energy cost several years ago and it is now a key design issue. Old equipment was always built for cooking performance; newer equipment is built for cooking and improved energy efficiency.

The cost of energy used in the kitchen has a first line of control through smart buying from the competitive energy supply industry. There are complex tariff structures which recognise demands at different times of the day and of the week. Careful buying of time contracts is commonplace with mobile phones. The same attention to usage times can also give savings in the kitchen.

The note of caution in buying gas or electricity through a variable tariff structure is that energy companies can make mistakes in the calculation of the bill, resulting in overcharging. Any caterer buying energy on a complex tariff structure should religiously check the bill against the pricing agreement.

Help and advice schemes

Energy-efficiency loans
These come from the Carbon Trust and are designed to save caterers money when replacing or upgrading existing kitchen equipment with a more energy-efficient version. The Carbon Trust is an independent body funded by the Government. Its role is to help the UK move to a low carbon economy by helping businesses reduce carbon emissions and benefit from the commercial opportunities of low carbon technologies.

A small or medium-sized enterprise (SME), which generally covers independent hotels and restaurants, could borrow between £5,000 and £100,000 unsecured and interest-free to fund the purchase of new energy-efficient kitchen equipment. But to use the caveat which normally appears with any offer involving money, terms and conditions apply. Not least of these that the rules are slightly different for Scotland and Northern Ireland than they are for England and Wales.

Hospitable Climates This is a free energy-saving advisory programme, managed on behalf of the Carbon Trust by the Hotel & Catering International Management Association (HCIMA) and dedicated to the hospitality sector. CESA is a sponsor of this scheme on behalf of its members.

Hospitable Climates has so far seen combined cumulative cost savings by more than 5,000 members of the scheme reach the £13m-a-year mark.

The objective of the voluntary Energy Efficiency Agreement that underpins Hospitable Climates, signed between the hospitality industry and the Government, is to reduce carbon emissions resulting from the use of electricity and fossil fuels in the UK hospitality sector. Specifically, the target is to reduce carbon emissions by 15% below 1999 levels by the end of 2010. The agreement aims to recruit 7,500 establishments - predominantly hotels, but all are welcome - as members of the Hospitable Climates scheme. Its target could save the hospitality industry £31m year on year in energy costs.

Enhanced Capital Allowance A useful energy cost tax saving can come by taking advantage of the Enhanced Capital Allowance scheme (ECA). This provides upfront tax relief for hospitality businesses that buy energy-efficient kitchen equipment.

The scheme is, like many tax-saving incentive schemes, more complicated than the initial wording suggests. But underlying it is a commitment by the Government to encourage a reduction in energy consumption as a contribution to lowering global warming.

This is stick-and-carrot taxation. The stick came in 2001 when the Government introduced the Climate Change Levy, a blanket tax on the amount of gas and electricity consumed in the commercial kitchen. The cost of the Climate Change Levy varied from kitchen to kitchen, but industry analysts quoted an average rise in annual energy costs of 15%.

The carrot was that if energy-inefficient equipment in the commercial kitchen were replaced by new equipment which had been shown to be more energy-efficient than before or better than competitor products, the item of equipment would be able to apply for admission to the certified list of energy-efficient kitchen equipment on the ECA scheme.

There are two business benefits to buying kitchen equipment that qualifies for ECA accreditation. The first is that it's energy-efficient, designed to use a lower amount of energy than comparable products to achieve the same result. The second is that a business can claim 100% first-year capital allowance against tax liability on the purchase cost. This compares with the normal first-year capital allowance of 25% against tax liability and the rest of the capital allowance strung out over subsequent years.

The ECA schemed can offset the Climate Change Levy on the consumption of energy in the commercial kitchen, but it will never repay it. And while there are plans to expand the range of equipment included in the ECA scheme, for all practical purposes the only equipment currently covered by the ECA scheme is refrigeration, which is one of the lowest energy-consuming items. Neither is it every item of refrigeration equipment. Manufacturers have to apply for accreditation of each individual item of refrigeration and of the hundreds of cabinets on the market, relatively few have ECA accreditation.

Other energy savings The real energy savings to be made in the commercial kitchen are not through tax incentives, welcome as they are, but in replacing existing energy-inefficient equipment with new equipment that has been designed with running costs in mind. Commercial catering equipment has always been built to withstand hard work and to last, so it's not uncommon to see prime cooking equipment still in good working order after more than 20 years.

A cooking range bought 20 years ago doesn't look fundamentally different from one in the showroom today. The same goes for fridges, dishwashers and most other equipment. But huge advances in energy efficiency have been made in the past five years.

As little as 10 years ago, energy efficiency was widely seen as just an added feature on kitchen equipment, so manufacturers concentrated research and development into performance and build strength.

The huge leap in energy costs in the past five years has changed thinking about where energy efficiency sits in the order of importance in cost management in the kitchen. That 20-year-old equipment is probably still working to the performance standards it was built to if it has been correctly maintained and used, but in terms of energy efficiency a lot of old equipment is now of questionable economic viability. No kitchen manager wants to replace equipment that continues to cook well, but annual energy savings from buying new equipment can make the kind of balance sheet sense that even the most hard-nosed finance director couldn't ignore.

The first place to look for energy savings which can come from equipment replacement is from high energy consumption items, particularly gas-fired equipment. Gas efficiency in a burner is the conversion percentage of gas to heat. In any burner the gas mixes with air to produce the familiar blue flame.

The factors which govern gas efficiency in a burner are the ratio of the gas and air mixture, the design of the air intake system and the shape, bore and quantity of the holes in the top of the burner. The importance of the mix of gas and air is best illustrated by a Bunsen burner. With the air vent closed off the flame is yellow and cool, but allow air to enter the burner and it turns blue and hot. The yellow flame of the Bunsen burner might be around 70°C. Introduce the right mix of air and the Bunsen flame can exceed 300°C.

So complex is gas burner design that most manufacturers of gas-fired prime cooking equipment have burners designed and built by specialist suppliers to their specification rather than making burners themselves. And while the most visible items of equipment using gas burners are cooking ranges, grills and fryers, there are gas combi-ovens and even gas-fired flight dishwashers.

The advances made in burner efficiency in the last 10 years have been huge. All equipment manufacturers now have energy consumption figures as a prominent selling feature of design specification. A cost-benefit analysis of the gas cost of existing equipment in the kitchen against the energy savings from replacing with new equipment will reveal some startling figures.

In terms of energy efficiency, electric cooking is very efficient, but depending on tariffs can be more expensive to run. Energy-saving features to look for on new electric cooking equipment include split heating zones on solid-top cooking ranges so that when the kitchen is quiet only half the stove is receiving direct heat. Because of the conductivity of a solid top, while only half is receiving heat, the other half will be very warm, useful for keeping food hot. Grills may also have this split heating facility. But the best energy-saving step for electric cooking equipment is the simplest - turn it off or turn it down when it's not needed.

Electricity-powered induction hobs have been recognised on mainland Europe for many years as being very energy-efficient. The use of induction hobs in the kitchen and for front-of-house cooking in the UK has had a slow take-up until the last two years, due partly to cost.

The rising cost of energy and the sinking cost of induction hobs has changed that. Induction has begun to capture a fast-growing market share in the way kitchen equipment uses energy. While energy is used to put heat into cooking equipment there's an ongoing loss through radiation. That has a double cost implication. Heat lost to the atmosphere is heat that's not cooking and, with the demand for a better working environment, it's heat which is going to take more energy to extract and cool down the kitchen through ventilation and possibly air conditioning.

Radiated heat can never be eliminated, but equipment manufacturers have done a lot to reduce it in the past few years. It can be as simple as tighter-fitting door closures on ovens, better insulation in refrigeration, but increasingly manufacturers are looking at heat recovery.

Much design and development work is going on, with warewashing equipment at the forefront of heat-recovery technology. Constantly working in a busy kitchen, it generates a huge amount of both dry heat and steam. Recycling that heat is a huge cost benefit to the operator and a strong selling point for the manufacturer.

Replacing old equipment before it expires is not an easy decision to take. But apart from the increasing servicing and maintenance costs on old equipment, it can be cost-effective to replace with new on energy-saving figures alone.

Contacts Hospitable Climates, Linda Martin, 020 8661 4916, e-mail lindam@hcima.co.uk

Enhanced Capital Allowances and interest-free energy loans
The Carbon Trust's Energy Helpline 0800 58 57 94 www.eca.gov.uk/etl

Businesses in Scotland 0800 092 9002 www.energy-efficency.org

For more information on how to get more energy efficiency from kitchen equipment see the CESA website

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