As the CRC Energy Efficiency Scheme makes energy management a serious board-level issue, Brian Rickerby explains how complying with energy legislation can promote your business and lead to long-term financial benefits.
The hospitality sector is responsible for more than 3.5 million tonnes of carbon emissions per year. It is estimated that energy savings of up to 20% are possible across the sector. So how does today's hotelier act to make these savings and benefit from the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme?
For those not already aware, CRC is the UK's first mandatory carbon-trading scheme for non-energy-intensive organisations in the public and private sector. The scheme will affect organisations which have at least one half-hourly electricity meter settled on the half-hourly market with a consumption exceeding 6,000MWh during 2008.
If you are eligible, you will have to buy allowances costing 6-8% of your total energy costs to allow you to use energy. This will be refundable depending on your performance in a league table.
CRC can be seen as a costly administrative burden on today's hard-pressed hospitality industry. However, embracing the scheme by taking a planned approach to energy reduction will have a number of advantages over simply ensuring legal compliance.
First, there is the obvious cost benefit of reducing energy usage. Then there is the potentially massive positive or negative effect on your organisation's brand reputation by being at the top or the bottom of the efficiency league table.
However, while the effect of league table positioning should not be underestimated, there is the danger of spending money in the first year in order to achieve a high ranking, only to make it harder to maintain a high position in subsequent years.
By understanding how the ranking system works it might be possible to spend less in early years and still achieve a high ranking in the league table.
Ranking in year one is only improved by the installation of automated metering and/or achieving the Carbon Trust (CT) standard. As a result a large number of organisations will be taking this route. Metering companies and consultants who help companies gain the CT standard will, therefore, be in demand and immediate action is needed in order not to miss out.
Years two to five are largely based on improvements in energy efficiency measured against the previous year. Energy-saving initiatives taking effect in this period would, therefore, have a full effect on league table positioning. In addition, a hotel completing everything in year one will get a maximum of approximately 110% from recycling of carbon allowance funds, whereas a return of about 150% can be possible in year five.
If your organisation is paying out thousands, or even millions, of pounds to purchase allowances, you are going to need an effective five-year strategy to ensure you recoup as much as possible when the allowances are recycled.
The average hotel renews building stock on a regular basis, with a full refurbishment every 7-10 years. According to statistics compiled by the CT, some hospitality businesses have seen energy costs drop by as much as 40% by maximising energy-efficiency opportunities during refurbishment.
This needs to be taken into account and planned for. A cost-effective carbon-reduction strategy will identify where savings can be made with minimum outlay in the early years, and savings made in reducing energy costs can be used to fund capital-intensive projects in the future. A Combined Heat and Power system, for example, is a much more viable option if installed as part of future refurbishment plans.
There are unique problems faced by the hospitality industry. A hotel is a 24-hour operation, and you cannot force customers to save energy. In addition, the aesthetics of the hotel must be considered along with energy efficiency. But these problems are not insurmountable; they just take a little thought.
Energy-saving lightbulbs, for example, no longer look like gargoyles, and can reduce lighting energy costs by more than 50% while still enhancing the atmosphere crucial to your business.
Automation of controls, such as occupancy sensors, will ensure lights operate only when they are needed. Daylight sensors, or photocells, can be used to control artificial lighting when there is sufficient daylight. A range of controls is available to switch off energy when a guest vacates a room; others can be operated from the front desk, enabling activation of lighting, heating or cooling when guests arrive.
Always look at the "whole-life" costs when purchasing new equipment. In a number of cases the capital cost may be lower, but when energy savings over the lifetime of the equipment are factored in, the more efficient model could work out cheaper. In addition, energy-efficient equipment used in the hospitality industry is often listed on the Energy Technology list and therefore qualifies for Enhanced Capital Allowance, giving a 100% rate of tax allowance in the year of purchase (for information visit www.eca.gov.uk).
Energy savings are achieved when a regular and planned maintenance schedule is followed. Light levels, for example, can be reduced by up to 30% just by keeping skylights and light fittings clean. When checking lights, see that timers are set correctly and make sure that occupancy sensors are clean.
There are always energy savings to be made in the kitchen: use dishwashers fully loaded; use the correct size of pan and use lids where possible; and switch off grills, fryers, hobs and ovens immediately after use.
Compile a check list, and complete walk-rounds at different times of the day to ensure that all that could be done is being done.
At board level, a five-year strategy is needed. Ensure early action is not wasted on energy-saving initiatives not recognised in the first year of the CRC scheme. Use savings achieved in year one to fund projects in year two and so on. Effective energy cost management is now a board issue that needs serious attention.
The CRC Energy Efficiency Scheme has forced the issue on to the boardroom agenda but, if approached correctly, it can provide the impetus a hard-stretched business needs to reduce energy and provide considerable long-term benefit to its bottom line and reputation.
Brian Rickerby is managing director of independent energy consultancy energyTEAM
TOP TEN ENERGY-SAVING TIPS
â- Replace any old 1.5in (38mm) fluorescent tubes with 1in (26mm) tubes.
â- Switch off non-essential lighting out of hours. Install timers to help with this.
â- Establish a basic lighting maintenance programme to keep lights and windows clean. Identify and replace failing lights.
â- Ensure theromostats are set correctly. Increase temperature set-point for cooling and reduce for heating.
â- Set a "dead band" of 5Â°C between heating and air conditioning control temperatures to avoid them operating at the same time.
â- Check insulation levels and increase wherever practical to reduce heating requirements.
â- Install and use a swimming pool cover whenever the pool is not in use.
â- Raise awareness among kitchen staff: label equipment with minimum warm-up times; keep fridge/freezer doors shut; use correctly sized equipment; and switch off unnecessary kitchen equipment and lights.
â- Walk around your building at different times of the day and in different seasons to see how and when heating and cooling systems are working. Check time and temperature settings.