Does your FD know how much it costs to ignore energy saving opportunities?
If you are struggling to make the case for implementing energy saving projects, it could be that person who holds the purse strings just doesn’t appreciate the true COST of inaction
Posted on 12 February 2019.
It’s not just the cost of the compulsory ESOS audit, or any other energy audit carried out, that is wasted. Inaction ignores the stresses to the business posed by rising energy prices, it ignores increased costs associated with production growth, it ignores the profit or investment potential of any savings realised and it also ignores the social gains of reduced environmental impact. So how can this message be communicated effectively?
JRP have been able to successfully demonstrate a compelling case for action to key decision makers in number of organisations in a really impactful way with a Cost of Inaction Analysis. This is a comprehensive analysis of the cost of inaction versus the benefits of implementation. It factors in the implementation of potential energy saving measures and projects, the impact of varying production and rising energy prices.
In this example, through the use of an ‘Energy Bridge’, the analysis shows the staggered implementation of the recommended energy saving projects through the years 2018 to 2023, an agreed energy increase as a result of a change or increase in production and predicted site energy consumption each year where the saving opportunities have not been implemented. The difference between forecasts of each year show the excess energy consumed as a result of inaction.
In the chart below, the cost of implementing the projects is compared to the cumulative savings that can be expected from them.
This clearly illustrates that the opportunities for savings continue to outweigh the related capital expenditure year-on-year.
Each year the savings are magnified due to the continually increasing price of energy as both electricity and gas.
The energy price increases in line with the 2017 UK government forecasts.
“One of the biggest challenges energy managers have is to argue the case for energy project investment,” comments Jes Rutter, Managing Director, JRP Solutions. “We have found that a Cost of Inaction Analysis is a very powerful way to change the mind set of key decision makers and to unlock energy savings.”
To discuss how you can use this powerful tool in your organisation, call us on 0800 6127 567 or email email@example.com.