How to reduce ENERGY CONSUMPTION and ENERGY COSTS in BOWLING CENTRES

Transcription

1 Geoff Berry

2 How to reduce ENERGY CONSUMPTION and ENERGY COSTS in BOWLING CENTRES Module. Energy usage, costs and buying solutions Presented by Geoff Berry, Touchstone Energy Management Services

3 Save Money & Carbon Geoff Berry Reduce amount of energy purchased Reduce unit cost of energy Improve underlying efficiency This is a key activity in an energy survey. Identifying opportunities to replace, improve or modify plant and equipment to be more energy efficient Reduce avoidable waste Find & eliminate recurring waste During a survey examples of poor or bad practise will be found. These need to be evaluated and addressed Reduce unexpected waste Spot and rectify waste energy occurrences through ongoing Metering & Monitoring. Then Target specific reductions Effective Procurement Effective procurement will ensure that energy is bought at best value and billing errors are found and corrected

4 Geoff Berry The Energy Action Group Current members of the Buying Group Energy Action Group (Basket) established in 2009 The Association of Independent Museums (AIM) The Development Trust Association of Wales (DTA Wales) The Association of Historic Houses The Development Trust Association of Scotland Locality Development Trust Association of England.

5 3 Ways to buy energy Geoff Berry.Renew with your current supplier. The easiest way of buying energy, and usually the most profitable for the supplier! If you do shop around, they may offer to match a better price but this simply shows how uncompetitive they were. 2. Use a consultant or broker They will trawl the market to find the best available price. This is the predominant method for energy contracts today and there is much to be said for it. There are many new entrants in the energy market today and it is both time consuming and confusing to firstly try and obtain prices from a wider range of suppliers. Typically, the more energy you use, the better the price you ll be offered. You may be offered the opportunity to combine your sites in a group contract but you will need to make sure they all begin/end on the same date. 3 Join an energy basket. By joining an energy basket you can enjoy improved tariffs for gas and electricity and a range of additional services.

6 Geoff Berry Reduce Tariff with Energy Buying Group AGGREGATE An energy basket allows companies to combine their energy requirements with other similar sized companies and pool a total combined energy spend. COST BENEFITS There are several major benefits to collective electricity and gas purchasing and group energy buying contracts, the principal of which is cost. COMBINE GAS & ELECTRIC Both gas and electricity contracts can be combined to provide a single neutral end date called a co-terminus contract. FLEXIBILITY Sites can be added or removed from the overall account and initial energy usage patterns are assessed along with the right risk management purchasing strategy for your business needs. BRIDGING There can be a combination of single sites or a group of sites. The contract end dates are aligned by way of Bridging Contracts

7 Process Geoff Berry Members sign a non-binding Letter of Authority The basket is sent to a range of selected suppliers. Quotes are requested for periods between 2 and 60 months Prices are requested on a specific date Price comparisons are analysed (normally takes 3 to 4 days) The winner(s) are announced and offers sent to members. * Note, there is no obligation to accept any offer.

8 How long should I buy for? Geoff Berry Length of Contract is often a personal preference. Some people don t like to sign up to lengthy 2, 3 or even 5 year contracts. However, a preference for short-term contracts (like 2 months) could prevent you from making a better decision, especially if market conditions are good. What s best for your business? Key factors:. How important is budget certainty for the company? 2. What do the next few years look like for the company? 3. Is the company expanding or moving location? 4. Am I upgrading or adding equipment to my site?

9 When should I buy? Geoff Berry Energy markets fluctuate, sometimes dramatically Many factors cause fluctuations. It s nearly impossible to predict pricing movements. Generally speaking it is best to avoid winter time when we know cold weather can increase demand. Impossible to predict factors such as a tsunami closing nuclear plants in Japan or outbreaks of war in the Middle East. These can cause major market volatility Market factors constantly influence wholesale market prices. Market prices in electricity accounts for about 60% of your bill and for gas around 80%.

10 Geoff Berry Energy Buying Group - Services Amongst the services are: Conflict Resolution Contract Management Cost Reduction Demand Management Performance Analysis and Management Procurement Renewal Cycle Terms and Conditions and the Developing of Contracts

11 Types of Fixed Term Contracts Geoff Berry Fixed-price - all-inclusive contracts contain a premium to cover the supplier should those third party costs unexpectedly rise. Non-energy costs normally constitute around 32% of electricity bills and about 20% of gas bills. Pass-through contracts - suppliers dispense with the premium and the customer bears the full cost of third party charges. You will need to know and understand your consumption profile and implement strict management of your energy usage.

12 Pass-Through Billing Geoff Berry

13 Geoff Berry

14 DNO CHARGES Geoff Berry EXAMPLE: RED CHARGE = 8-20p AMBER CHARGE = - 3p GREEN CHARGE = p DNO Band Weekday Weekend Western Power - Midlands, South West & Wales (EMEB & MIDE) Southern Electric (SOUT) Red 6:00-9:00 Amber 07:30-6:00 & 9:00-2:00 Green 00:00-07:30 & 2:00-24:00 all day Red 6:30-9:00 Amber 09:00-6:30 & 9:00-20:30 Green 00:00-09:00 & 20:30-24:00 all day

15 Strategies for Pass-through Contracts Geoff Berry Try to shift electricity loads away from Red periods. Analysis shows that Red period consumption in a Bowling Centre is roughly 0% to % of the total. Reduce peak electricity demand You can chose to fix any component of a Pass-Through contract. This means that you could accept a long term contract with some parts fixed and some parts pass-through, particularly those that have seen large increases. This way, you can build a contract to suit your situation.

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17 Geoff Berry Is a Pass-through contract right for me? Risk averse? Site dependent. Ability to minimise demand during Red periods. If you prefer the longer term contracts where you require budget certainty you are probably going to choose a Fixed contract. Do you have a good understanding of consumption profile? Part fixed and part pass-through can be a good option

18 Other Factors - Capacity Charges Geoff Berry What is Maximum Demand? Put simply, Maximum Demand (kva) is the maximum availability of electricity from the grid to your site. The level of available capacity on your site is based on historical data. The data is often wrong, sometimes very wrong. The DNO charges you for the availability of power on your site. They allocate a specific level of capacity for your site. The average cost is per kva per month. You are charged whether you use it or not. Example: The above example shows that 400 kva costs 8.92 per day. This equates to 3,256 per annum. Originally this site was assigned 700 kva by the DNO until we carried out an analysis. We petitioned the DNO and they dropped the availability to 400 kva. The savings amounted to 2,442 per annum.

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20 Example of Maximum Demand Geoff Berry

21 Geoff Berry What is P272 and how will it affect me? P272 is an Ofgem initiative to improve energy management. Currently, only 00 Profile meters are billed according to their demand and consumption profile. The majority of Maximum Demand meters, Profiles 05 to 08, are starting to move to a similar regime to HH meters. These supplies will start to incur increased metering charges (MOP) and will require data-collection and aggregation services (DC/DA). Combined costs can amount to 600 per annum plus capacity charges.. These costs are in the region of per kva per month. A supply of 75 kva can therefore incur 900 per annum It may well be necessary to change your meter. This will result in a short term loss of supply.

22 Geoff Berry P272, what should I do (or not do)? Most suppliers are implementing the changes as contract renewals occur. Your supplier will inform you of the pending change. If you do not nominate a MOP your supplier will appoint one. This is not in your best interest as MOP, DC/DA costs vary considerably. You can appoint both the DC/DA and the MOP. This is very likely to be the cheaper option. The DNO (your local distribution company) will seek to agree a level of availability for your site. It is prudent to check that this is a reasonable. You do not want to be classified as having more Availability than you really need. We can evaluate your usage and if it is deemed excessive we can petition the DNO to reduce it.

23 Geoff Berry P272, what are the good bits? P272 provides more accurate billing and energy consumption data. It provides a valuable insight into how, when you use energy. By managing your energy efficiently you can probably achieve more savings than with other, larger capital investments.

24 Energy Management Why does it matter? The Virtuous Circle Geoff Berry A step by step approach with specific objectives will save you time and money for the long term.

25 Geoff Berry Energy Management Why does it matter? Thank you for listening. We look forward to discussing your energy reduction plans with you For more information contact: or call: