How businesses can become more sustainable and increase profits

In the drive to make industry more sustainable, when authorities attempt to pressurise the sector, squeals of "But jobs!" and "Competitiveness!" are heard.

Different sectors within industry respond to the "green-and-clean-yourself" call with varying degrees of enthusiasm. High energy users like cement and steel are notorious squealers. But all of them can benefit from not having a knee-jerk reaction and paying attention to leaders within their sectors who are heeding that call and seeing as a result a turnaround in their fortunes.

Because for an organisation to be able to survive into the future, it has to see all of its operations – its requirements in terms of materials, energy and water, its fixed assets – as equal in importance to its core activity.

Case study: Low carbon tomatoes

Terra Nitrogen, a company based in Billingham in the northeast of England, produces nitrogen chemicals and methanol for industry, but as an unfortunate by-product also produces a lot of carbon dioxide emissions.

It linked up with John Bader Ltd, which now diverts carbon dioxide from the plant into 38 acres of greenhouses erected next door to grow tomatoes.

Terra Nitrogen is also supplying electricity to the greenhouses, allowing them to continue production through the winter and removing the need for the UK’s supermarkets to import so many tomatoes from Spain.

The benefits include the successful reuse of waste heat, reduction of 12,500 tonnes of carbon dioxide emissions and the creation of 65 new jobs.

Case study: Unilever

Unilever is a much larger company that is leading the way. Its CEO, Paul Polman, is the visionary behind a Sustainable Living Plan, launched in November 2010, which seeks to double sales and halve the environmental impact of its products.

It is working. He believes that this fundamental shift in the business paradigm is partly a reaction to the financial crisis, from a rules-based one back to a principles-based one, but it has financial benefits.

Procurement of new equipment

It follows that a policy like this should translate into a procurement strategy. Part of any such strategy should be to purchase equipment that is sustainable and consumes the least energy, or has the least environmental impact, over its lifetime compared to comparable products.

Lists of these products, together with standards, may be found on the website of the U.S. Energy and Efficiency and Renewable Energy office, and on the European Market Transformation Programme website, with further information on the Energy Using Products Directive website.

Standby power load should also be a choice factor in procurement. For instance, US federal agencies must purchase products with a standby power level of 1W or less. Standby power typically occurs when the product is switched off for not performing its primary purpose. The standby power data centre lists compliant products.

Sustainable procurement is a specialism in itself. Specimen framework agreements to ensure the supply of sustainable goods and services are available from the website of the UK Sustainable Procurement Centre of Excellence (currently down but may be available via the UK National Sustainable Public Procurement Programme (NSPPP)). There, you might also find a knowledge base of information on sustainable procurement, commodity areas, carbon reduction, whole life costing, legislation, toolkits, case studies and best practice.

For ICT, ENERGY STAR® is a voluntary labelling scheme for products which use less than a specified energy consumption in typical use. It was originally developed by the US Environmental Protection Agency (EPA) for common computing equipment, but is now a joint activity with the European Commission.

This means that specification of ENERGY STAR compliance in tenders is compatible with EU procurement rules. A list of compliant models is at www.euenergystar.org.

A key factor in the energy consumption of ICT is user behaviour. It is now possible to purchase software which monitors actual PC use within an enterprise. Advanced versions permit energy managers to set power policies that reflect a certain level of usage, reducing both energy consumption and carbon emissions. They reveal when users are using their PCs by monitoring key strokes and mouse movements.

Energy managers can then match the power state of each subset of PCs, by location, with the activity level of employees. They can also identify unused or underutilised PCs on the network, further eliminating the management overheads of maintaining these machines; ensure that a computer in a low-power state can be woken up and accessed on demand when a user is working remotely; and that applications which prevent a PC from being powered down can be overridden while the PC is not in use.

Supply chain optimisation

It then becomes necessary for businesses and organisations seeking to reduce their carbon footprint to turn attention to that of their products and services, and this involves looking at their supply chains.
According to the American Council for an Energy-Efficient Economy (ACEEE), supply chain optimisation can result in up to 60 per cent of energy intensity reductions. For example, in food production and distribution, much perfectly good food is wasted due to spoilage, both in the supply chain and at the retail level. This means that all of the energy embedded in the food is wasted as well.

By modelling the supply system throughout the chain, opportunities may be identified to significantly reduce waste by changing processing, handling, packaging and delivery systems. The result is frequently fresher food delivered faster and of a more consistent quality. There is less waste and greater savings.

Case study: PepsiCo

UK snack foods manufacturer Walkers, and its parent company PepsiCo, have been working with the British Carbon Trust on energy efficiency and carbon management. They have saved over 2,000 tonnes of CO₂ per year, reducing energy bills by approximately £225,000 (US$350,000).

Having done this they moved on to looking at their supply chain in order to demonstrate a continuing commitment to emissions reduction. They began by looking at their raw material production, which includes potato and corn producers, sunflower oil and vegetable oil manufacturers, corrugated cardboard manufacturers and so on.

They then began to optimise the distribution of raw materials using logistics and network planning. They have already optimised the manufacture of products. The next step was product distribution, again tackled by the network strategic planning department. Finally, they wanted to make sure that redundant packaging could be recycled.

Energy Management in Industry

This is an extract from my latest book, Energy Management in Industry: The Earthscan Expert Guide, which is a companion to my Energy Management in Buildings, published in November 2013.

Energy demand reduction is fast becoming a business activity for all companies and organisations because it can increase profits regardless of the nature of their core activity.

The International Energy Agency believes that industry could improve its energy efficiency and reduce carbon dioxide emissions by almost a third using the best available practices and technologies.

This guide looks at the many ways available to energy managers to achieve or even exceed this level of performance, including: base-lining consumption planning a monitoring and verification strategy metering (including smart, wireless metering) energy supply management motors and drives compressed air and process controls.

It also looks at topics covered in greater detail in its companion volume, Energy Management in Buildings: insulation, lighting, renewable heating, cooling and HVAC systems. Uniquely, it includes a whole chapter on greening data centres. Further chapters examine minimising water use and how to make the financial case, both to prioritise measures for cost effectiveness, and to get management on board.

This title is aimed at all professional energy, industry and facilities managers, energy consultants, students, trainees and academics and can be read alongside training for ISO 50001 - Energy.

'David Thorpe's book Energy Management in Industry is an easy to read book about how you can save energy in your company…He does this without [needing] to over complicate it with technical details and scientific formula. I enjoyed reading this book and would highly recommend it to energy managers and anyone who would want to reduce energy consumption.' - Kit Oung, Energy Consultant and author of Energy Management in Business, Committee Member, British Standards Institute BSI-KSA.

Selected Table of Contents

Preface. Introduction. 1. Measuring Energy Consumption 2. Metering 3. Airtightness and Insulation 4. Lighting, Daylighting and Controls 5. Heating and Cooling 6. Heating, Ventilation and Air Conditioning Systems 7. Energy Reduction Technologies 8. Motors, Drives and Compressed Air 9. Refrigeration 10. Process Controls 11. Data Centres 12. Minimising Water Use 13. Making the Financial Case Conclusion. Appendix.

What's wrong with businesses that don't save money when it's so easy?

Richard Rugg, the Director of Carbon Trust Programmes, really can't understand why more organisations are not taking advantage of the free advice available from the Trust.

Because at relatively low cost a wide range of industrial, commercial and public sector organisations can cut their energy bills by up to 25% if only they took energy management seriously. Payback periods can be as low as two months - and then it's into the profit zone.

Richard is full of examples of success stories, such as a famous confectionary company who, within two weeks of developing an energy plan, had taken action and was seeing noticeable improvements.

It had set up a team that met on a monthly basis. The end result was a reduction in the energy bill of £22,000 - plus a 22% improvement in production output.

The total cost of the projects implemented was £58,790 giving a simple payback of 2.8 years. The company was also easily able to achieve its Climate Change Agreement targets.

The Trust is reminding businesses and organisations once again that it has a free Advice Line (0800 085 2005) as a first port of call.

But it has also published a new, user-friendly guide to managing energy and is running a free webinar on 28th September, which anyone can sign up to.

“Cutting overheads is rightly high on the agenda at the moment," says Richard. But he is still observing that energy costs don't receive the attention they deserve.

"When it comes to managing energy, ignorance certainly isn't bliss," he continues. "If you don't know where to start, download our new guide, and call our advice line for your free Energy Saving Plan, to see how your organisation could start cutting its energy bills."

Energy management is the systematic use of management and technology to improve an organisation’s energy performance.

But to be fully effective, it needs to be integrated, proactive, and incorporate energy procurement, energy efficiency and renewable energy.

The new guide, Energy management – a comprehensive guide to controlling energy use, is part of the Carbon Trust's Expert in Energy series, and contrasts poor practice with good practice.

Examples of poor practice include: treating energy costs as an unquestioned overhead; having no clear or consistent chain of responsibility for energy management; a lack of awareness of energy issues; and procuring energy from the same supplier year-on-year, without a cost comparison.

Good practice would involve treating energy as a strategic issue and its management as an opportunity, with strong guidance from board level permeating through to rewarded action throughout the workforce, with adequate resources and business planning attached to it.

The guide includes an Energy Management Assessment for an organisation to test itself on how energy-aware it already is and where there is room for improvement.

It can then chart its way through a handily-designed 'energy management matrix' of options.

The guide also points readers to other sources of help from the Carbon Trust, such as a document on how to make the business case for a carbon reduction project and get senior decision-makers on board.

Many companies have already taken advantage of the Carbon Trust's support, from household names like Sainsbury's - who used appointed 'energy champions' to save 5% on energy consumption - to small companies like Guala, a manufacturer of bottle closures for the spirits industry, which was able to make energy costs savings of £117,000 per year based on annual electricity savings of 2,000 Mwh, at their plant in Kirkintilloch, Scotland.

Some measures had ridiculously short payback times, and resulted from getting a fresh eye in to examine habitual behaviour patterns and point up ways to change them that meant money wasn't being unnecessarily wasted.

For Guala, this included increasing the temperature of cooling water, which cost £500 but yielded savings of £3,800 per year - a payback period of less than two months.

The same payback period came from an outlay of £2,500 for advanced ultrasonic leak detection equipment plus £8,000 for new nozzles and valves, which eased the load on the air compressors, saving over £58,000 per year.

Many energy efficient technologies qualify under the Enhanced Capital Allowances scheme, and may be written down in the year of purchase.

Furthermore, the Carbon Trust can provide Small and Medium Enterprises or businesses that do not qualify for participation in the Carbon Reduction Commitment, with an interest free loan of up to £400,000, repayable over up to four years, for investment in energy efficiency measures.

Unsexy renewable energy technology is turned on... and will one day beat solar and wind in the UK

It's not as sexy as solar power or controversial and high profile like wind power. But a 'new' form of renewable technology is going to take off this year – the first of a series of plants was commissioned this week – and eventually it will be better value for money, more reliable and even contribute more energy to the UK's needs.

Its developers are now urging the Government to match the level of support offered to other renewable energy technologies such as wind and solar, through Feed-in Tariffs.

What is it? Well, unpleasant as it sounds, it's anaerobic digestion (AD) and it is a multiple-win technology that is set to revolutionise waste processing and energy generation.

AD also helps to divert waste from landfill, and reduce air and water pollution. Byproducts include transport fuel and renewable sources of soil nutrients and manures. These processes will all additionally create new employment.

The Coalition Government also believes AD can help the UK meet its climate change objectives by reducing greenhouse gases from waste and producing energy - including renewable heat - without significant land use changes.

AD makes power from the methane generated by composting organic food, sewage and crop waste without oxygen being present. As these materials are in abundant and continuous supply, it is more reliable than wind and solar power.

The National Grid has said that it believes that within 20 years, half the gas in the grid could come from this source. The gas can be burnt to make electricity and used to power vehicles too.

Pioneer plant opens

One of the first anaerobic digestion projects funded through the Government’s Environmental Transformation Fund was officially opened on Thursday.

The plant, at Staples Vegetables in Boston, Lincolnshire, one of the biggest producers of vegetables in the UK, will produce 11 million kilowatt hours of electricity per year by processing 40,000 tonnes of unusable vegetables and waste.

The digestate (what's left over after the composting) from the Staples plant will replace artificial inorganic fertiliser (which creates emissions) and be better for the soil (because of the organic matter it contains), the heat will be captured for office heating, innovative heat absorption coolers will chill the processing areas, and the electricity generated will power the plant.

Vernon Read, Managing Director at Staples says there is an additional benefit: “The project is giving us control not only over future pricing of power, but also over power security.”

There are three more Government-supported AD facilities opening this spring and over 30 in the planning stage. Some examples are highlighted towards the end of this article.

The National Grid has talked of the biogas from AD eventually replacing a significant proportion of fossil fuel gas in the mains in the future.

But before this can happen markets need to be created for the fertiliser, and for the gas as a fuel in transport. Different sectors, such as the water sector, need to be encouraged to process sewage this way. This was the subject of a Defra consultation last December, whose results have not yet been published.

AD is also subsidised through Feed-in Tariffs (FITs). In order to increase uptake, there is a study into the take-up of FITs for farm-based AD plants going on now at DECC, parallel to the review of Feed-in Tariffs and "solar farms".

Climate change minister Greg Barker believes there is "a huge opportunity" for farm-based AD but had been disappointed by the take-up so far. Developers agree and hope it will become eligible for FIT subsidies soon.

Pioneering AD plants

Because it is not yet cheap to set up. Gary Jones is the owner of a plant at Langage Farm, near Plymouth in Devon. He says that the project couldn't have happened without support from the ETF. "Due to the new concept involved with anaerobic digestion in the UK, the start up costs are very prohibitive.

″Hopefully when there are a few more established sites around the UK, the authorities concerned in the build and running of the sites have a better understanding, and good technology providers can be found locally the cost will reduce and the plants will become profitable without grant funding."

Several other exciting projects are nearing completion, funded by the Environmental Transformation Fund.

United Utilities and National Grid are expanding the already existing anaerobic digestion plant at United Utilities' Davyhulme Waste Water Treatment Works in Greater Manchester. Work is almost complete on converting 250 cubic metres per hour of biogas to grid quality biomethane. Half will be used to fuel a fleet of tankers and half injected into National Grid’s gas distribution network - sufficient to provide heating and cooking needs for around 500 homes.

In Driffield, East Yorkshire, anaerobic digestion company GWE Biogas Limited is constructing a plant to convert up to 50,000 tonnes of organic waste each year sourced from local authorities, food manufacturers and supermarkets, to generate approximately 2MW of electricity for export to the grid. The long term objective is to upgrade gas to bio-methane to supply a private heat and wire network for new housing.

Like Langage Farm, BV Dairy (pictured) in Dorset, which processes around 35 million litres of milk per year, is building an anaerobic digestion plant to process liquid waste and provide renewable electricity and heat for its site.

WRAP, with support from the Carbon Trust, is delivering the Anaerobic Digestion Demonstration Programme under the Environmental Transformation Fund particularly because of its role in cutting waste in the food chain. It's also supporting a Staffordshire-based AD project through its Advantage West Midlands (AWM) Programme, with an animal rendering and food waste collection business.

There is every reason to believe the claim of the Anaerobic Digestion and Biogas Association (ADBA) in ten years' time the UK will have a mature anaerobic digestion industry.

[PS - let's see how popular this post is - with words like sexy and turned on in the heading! - I noticed my post about naked supporters of Amen Awel Tawe windfarm making a calendar is my most popular so far!]

Ramp it up - investment in low carbon technology

The last issue of the New Scientist contains a one page ad from the Carbon Trust offering £3m to £6m funding for partners in oil-from-algae technology.

The Low Carbon Kid wrote about this concept 17 months ago. He highlighted it because many of the problems present with the traditional oilseeds such as palm & soy, and with ethanol feedstock such as corn and molasses/sugarcane are not present with algae.

In a more recent blog he also suggested the government should take a stake in t he development of promising new low carbon technologies that could then be sold off to benefit the taxpayer when they reach maturity.

The Carbon Trust itself says algae-based biofuels could replace over 70 billion litres of fossil derived fuels used worldwide annually - a market value of over £15 billion.

So why is it being so modest?

We need urgent, fast action. It should invest hundreds of millions.

Instead of a third runway at Heathrow, more roads, or coal-burning power stations, low carbon technology needs to be developed and implemented on a huge scale asap.

Why? The observed impacts of climate change suggest that the climate is more sensitive than we had thought. We may already be past the atmospheric concentration which will ultimately deliver 2°C of temperature rise.

We are preparing for a medium-sized climate problem, based on out-of-date IPCC predictions. The 80% cut by 2050 that's now UK policy may not be enough because of the feedback loops triggered by sea-ice loss, albedo flip, a warmer Arctic, a disintegrating Greenland ice sheet, melting permafrost with huge methane emissions, with their concurrent massively increased greenhouse gas emissions and accelerated global warming.

In Parliament on 18th November (yesterday), in a debate on the Lords amendments to the Energy Bill, Government committed to obtain 14% of heating from renewable heat.

Great. This has been the subject of several previously unsuccessful bills. But progress is far too slow. We'll have to wait till next year, O'Brien (energy minister) said, before we know how they're going to achieve this target... which corresponds to 7% of overall energy use - with feed-in tariffs or an Obligation? And they haven't a clue yet how the feed-in tarriffs will work.

All too slow.

Part of the problem is the Treasury. Today it indicated that it would not ringfence the proceeds from the auctioning of carbon credits under the European Emissions Trading scheme to spend on low-carbon technology.

This is madness. The Treasury is always a brake on helping the environment. If the PM told it to reverse policy prioritise the health of our life-support system - the planet - we'd get where we need to be much faster.

Ramp it up - investment in low carbon technology

The last issue of the New Scientist contains a one page ad from the Carbon Trust offering £3m to £6m funding for partners in oil-from-algae technology.

The Low Carbon Kid wrote about this concept 17 months ago. He highlighted it because many of the problems present with the traditional oilseeds such as palm & soy, and with ethanol feedstock such as corn and molasses/sugarcane are not present with algae.

In a more recent blog he also suggested the government should take a stake in t he development of promising new low carbon technologies that could then be sold off to benefit the taxpayer when they reach maturity.

The Carbon Trust itself says algae-based biofuels could replace over 70 billion litres of fossil derived fuels used worldwide annually - a market value of over £15 billion.

So why is it being so modest?

We need urgent, fast action. It should invest hundreds of millions.

Instead of a third runway at Heathrow, more roads, or coal-burning power stations, low carbon technology needs to be developed and implemented on a huge scale asap.

Why? The observed impacts of climate change suggest that the climate is more sensitive than we had thought. We may already be past the atmospheric concentration which will ultimately deliver 2°C of temperature rise.

We are preparing for a medium-sized climate problem, based on out-of-date IPCC predictions. The 80% cut by 2050 that's now UK policy may not be enough because of the feedback loops triggered by sea-ice loss, albedo flip, a warmer Arctic, a disintegrating Greenland ice sheet, melting permafrost with huge methane emissions, with their concurrent massively increased greenhouse gas emissions and accelerated global warming.

In Parliament on 18th November (yesterday), in a debate on the Lords amendments to the Energy Bill, Government committed to obtain 14% of heating from renewable heat.

Great. This has been the subject of several previously unsuccessful bills. But progress is far too slow. We'll have to wait till next year, O'Brien (energy minister) said, before we know how they're going to achieve this target... which corresponds to 7% of overall energy use - with feed-in tariffs or an Obligation? And they haven't a clue yet how the feed-in tarriffs will work.

All too slow.

Part of the problem is the Treasury. Today it indicated that it would not ringfence the proceeds from the auctioning of carbon credits under the European Emissions Trading scheme to spend on low-carbon technology.

This is madness. The Treasury is always a brake on helping the environment. If the PM told it to reverse policy prioritise the health of our life-support system - the planet - we'd get where we need to be much faster.