Energy Efficiency – What is Energy Efficiency?

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Energy Efficiency – What is Energy Efficiency?

When it comes to managing your business’ overheads and utility requirements, energy efficiency is essentially important. Not only does a sound and well-implemented energy efficiency plan help to cut your business’ gas and electricity bills, it can also have a positive knock-on effect on the environment as well as your organisation’s reputation as an eco-friendly company. Also, with a number of low-carbon incentives and schemes now in place for businesses to take advantage of, focusing on making your business more energy efficient can help you qualify for any energy efficiency business opportunities that may be available. This means your business can become more sustainable, while saving money in the long term too.

But what does it actually mean for your business to be energy efficient, what are some examples of energy efficiency in action and what levies and schemes does your business need to be aware of? The following guide answers all these questions and includes our top energy efficiency tips for businesses.

What is energy efficiency?

In its most basic form, energy efficiency is simply the removal of waste when it comes to energy usage. This is to say, whether you are talking about an entire organisation or just an individual electronic device, something is energy efficient if it fulfils the same purpose or produces the same output using less energy.
The term can be used to either describe energy-saving equipment, appliances and devices – such as the use of LED lighting rather than traditional light bulbs – or the energy efficiency of whole buildings and organisations. In this context, energy efficiency refers to the different processes a home or business can implement in an attempt to reduce energy consumption. For businesses, this usually involves energy auditing and monitoring before then taking proactive steps to change the ways in which its buildings, equipment, devices, activities, modes of transport and general infrastructure consume gas and electricity.

There are many services, systems, products and simple design changes that you can take advantage of when looking to improve business energy efficiency. From simple changes such as replacing old, power-hungry equipment with more efficient, newer models and draught-proofing your buildings to more sophisticated techniques that involve the help of technology-aided energy management systems, there has never been a better time to make your business more sustainable. It may be a cliche, but every little really does help when it comes to cutting out waste and saving energy. According to the Carbon Trust, most UK businesses could reduce their energy costs by as much as 10 per cent with just a few basic changes – examples of which will be detailed later in this post. Interestingly, if a further 10 per cent reduction can be achieved in easy-to-implement energy-saving measures, the savings made in energy costs could represent the equivalent of a 5 per cent boost in sales for many businesses.

How do you calculate energy efficiency?

Nowadays, buildings and equipment tend to be designed with energy efficiency in mind, wasting as little power as possible. This is to say, they make use of as much of the input energy – the gas or electricity that you pay for – as possible when transferring it into the power needed to operate. However, the energy efficiency of different equipment and devices can vary greatly depending on a number of factors, including the device’s function, the age of the device, how often it is used and how well it is maintained. How successful an item of equipment is at transferring energy input into useful energy output, when taking all of these factors into account, will determine how efficient it is. This efficiency can be calculated to give you a better idea of which items of equipment and devices are costing you more than they should and which need to be replaced.

The efficiency of a device is simply the proportion of the useful energy taken in relation to the total energy supplied in order for the device to function, and it can be displayed as either a decimal or, more commonly, a percentage figure. To calculate energy efficiently, use the following equation:

Efficiency of a device = useful energy transferred by device ÷ total energy supplied to device

Then, in order to find the energy efficiency of a device as a percentage, simply multiply this figure by 100.

For example, when calculating the efficiency of a typical filament light bulb that requires 100 J of energy to function, but only transfers 10 J of energy into useful light (with 90 J being wasted in heat energy), efficiency equals 10 ÷ 100 = 0.10. Multiply 0.10 by 100 to give an efficiency figure of 10 per cent. This is clearly not very efficient. However, you could replace your traditional filament light bulb with a modern energy-saving LED that consumes the same 100 J of energy to function, but transfers 75 J into useful energy, wasting only 25 J in heat energy. Efficiency for the LED light would equal 75 ÷ 100 = 0.75. 0.75 x 100 = 75 per cent. This shows that, in this example, the LED is 65 per cent more energy efficient than the traditional filament light bulb.

What is the difference between energy efficiency and energy conservation?

Although energy efficiency and energy conservation are closely related, and can both help a household or business to cut down gas and electricity bills, there are a number of differences between the two practices that are worth noting. As a rule, as this post has already explored, energy efficiency involves using equipment, devices and appliances that require less energy to perform the same function as older, less efficient models. Energy conservation, on the other hand, usually refers to the practice of adjusting your behaviors and habits in order to cut down on unnecessary energy usage.

For example, a business that is attempting to implement better energy conservation practices in order to reduce energy consumption, cut down on bills and become more eco-friendly in the process may conduct an energy audit to see which areas of the business are wasting energy and then act accordingly. These actions may include monitoring and controlling the use of heating, ventilation and air conditioning (HVAC) systems, encouraging staff to turn equipment and lighting off when they are not needed and generally promoting sustainability throughout the business. This can be done by providing better training, putting up signs to gently remind people to be conscious of energy waste and even by appointing an ‘energy champion’ to help motivate and educate your workforce on eco-friendly practices in the workplace.

However, a business that is looking to become more energy efficient may go a step further following the results of an energy audit. For instance, they may replace all inefficient equipment and lighting with more modern super-efficient models, instal draught-proofing and insulation throughout their premises and even fit sophisticated, technology-aided energy management systems and software that enables them to implement an energy efficiency strategy on a day-to-day basis,.

What are some examples of energy efficiency?

a workman installing insulation into the walls of an office

When it comes to implementing energy efficiency plans, there are lots of different ways businesses can change and adapt to reduce energy wastage, cut down on electricity and gas bills and lower their carbon footprint. Some of the most common energy efficiency practices include:

  • Installing LEDs and motion sensor lighting – according to the Carbon Trust, on average, 25 per cent of a business’ electricity usage goes towards lighting. One way to lower your energy costs and become more energy efficient – potentially cutting your lighting costs by as much as 80 per cent in the process – is to make the change from traditional halogen lighting to LEDs. Cutting down on the amount of wasted electricity is also a simple yet effective way to become more energy efficient. In this vein, making use of motion sensor systems throughout the office can be very effective in making sure lighting is only switched on when and where it is needed.
  • Installing energy-efficient equipment – while it may sound obvious, you might be surprised how big of a difference powering equipment can make to the efficiency of your business. From PCs and printers to conveyor belts, industrial freezers and heavy-duty manufacturing machinery, if your equipment is more than five years old, it is likely a more energy efficient model will now be available. So, whether you are buying equipment for the first time or looking to replace old devices, check for energy efficiency certificates and ratings before purchasing. When buying new equipment, always look for those items with an energy efficiency rating of ‘A’ or above.
  • Installing a smart thermostat – a smart thermostat that gives you programmable control of your HVAC systems and has the ability to reduce energy wastage instantly. Giving you the power to accurately monitor the temperature of your premises and pragmatically change it when needed, depending on conditions, smart thermostats can also update you when there is a problem with your HVAC systems and when maintenance is needed. This can make heating and cooling your business as efficient as possible.
  • Installing an energy management system (EMS) – EMSs can be a great way to highlight areas of your business and specific equipment or devices that are wasting energy. Although these systems come in various forms and use a range of industry-specific software, even basic EMSs can automatically send energy data back to a central computer or app, flag any unusual data and diagnose potential energy-related problems instantly, helping you in your mission to become more efficient.

Levies and schemes

In order to encourage businesses in the UK to reduce their carbon footprints and become more sustainable, the past few decades have seen a number of government levies and schemes introduced. Arguably the most significant of these are the Climate Change Levy (CCL) and the Energy Savings Opportunity Scheme (ESOS).

The Climate Change Levy

Currently in the UK, the principal levy that applies to businesses when it comes to energy usage is the Climate Change Levy (CCL). First introduced in 2001, the CCL is an environmental tax that is charged to businesses based on the energy they consume. The levy is designed to encourage UK businesses to become more sustainable and invest in technologies that can make them more energy efficient, with the ultimate aim of helping to reduce overall carbon emissions.

The CCL applies to businesses in practically all industries, including the manufacturing, public services, commercial and agricultural sectors. Although the levy applies to almost all UK businesses, charities that are engaged in non-commercial activities are exempt from CCL rates.

The CCL rate your business pays depends on a number of factors. You either pay the main rate or the carbon price support (CPS) rate. Businesses that pay the main rate are those that operate in the sectors listed above and exclusively use energy produced by fossil fuel-based sources. This rate will be displayed on your business gas or electricity bill. On the other hand, businesses that are required to pay the reduced CPS rates are those that generate a proportion of their own electricity. This lower rate is designed to encourage businesses to invest in low-carbon technologies and generate their own energy.

The Energy Savings Opportunity Scheme

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme that all large enterprises in the UK have to complete. Designed to ensure large businesses are doing enough to become more energy efficient and reduce their carbon footprint, businesses with over 250 members of staff, or that have an annual turnover of over 50 million Euros (£44.1m) or an annual balance sheet of over 43 million Euros (£37.9m), must assess their energy usage every four years and present the ways in which they are actively trying to save energy. Businesses can face financial penalties if they do not comply with ESOS.

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