Here at Helec we have certainly had our fair share of ups and downs recently – from the Covid lockdowns, when we couldn’t have anyone on site, through to the post-Covid staycation boom, when we all wished we had more space.
And now we’re on our way down again thanks to the increasing cost of energy, which is driving up the cost of virtually everything we buy. And we’re not the only business affected by the energy crisis – many others have been hit by the energy price increase and are under serious financial pressure. While companies have always tried to keep costs down, now that energy prices are going through the roof, many business owners will be asking themselves: “What else they can we to take back control of our energy bills and make our outgoings more predictable?”
Businesses will certainly welcome the Government’s Energy Bill Relief Scheme (EBRS), with a maximum discount of £345/MWh for electricity and £91/MWh for gas becoming available. This will be backdated to run from October 2022 to March 2023, providing a six month window for companies to invest in insulation, energy efficiency measures, and – where possible – switch to a more sustainable energy supply.
But before you rush off, let’s first analyse the situation. Here are my thoughts:
- The rising cost of electricity is making anything powered by electricity expensive to use.
- The cost of electricity directly affects the cost of all purchased goods and services.
- Usually, the cheapest way to heat is by using gas, not electricity.
- BUT, the UK Government now tells us that gas is EVIL and we should all move to heat pumps.
- BUT, heat pumps run on electricity which is expensive so we are likely to go bankrupt trying to save the planet.
- Not all gas is bad. There are increasing amounts of biogas and reclaimed gases that are being added to the gas network all the time, so our gas supply is actually getting greener.
- It is more cost effective to generate your own power than buying it from the grid.
What next for business?
From the above list I can see that we can take some control over the cost of the electricity we use and that, rather than throwing out our gas boilers, reducing our gas consumption is the most sensible route forward.
The most obvious choice is Photovoltaic (PV) panels.They provide zero carbon electricity, are simple and low maintenance and so can be considered for every site. However, PV panels aren’t always suitable as it takes quite a large area of panels to make a good contribution to the site load. They’re also less effective during our winter months.
Businesses that use a lot of hot water – e.g. those in hospitality, leisure or agriculture – may benefit from installing a Solar Thermal system. The heat is generated through roof mounted solar panels which are used together with a boiler, collector or immersion heater. When the sun shines on the solar collector, it heats a transfer fluid, which is then pumped to a heat exchanger. The heat from the exchanger then heats the water inside the water tank. But, like solar PV, solar thermal is affected by the loss of direct sunlight during the winter months, when we most need heat.
If you have land surrounding your business premises, you may consider installing one or more wind turbines. Like solar energy, wind energy, while intermittent, generates 100% renewable electricity and is free at source. However, wind turbines can be difficult to site due to the required planning permissions.
Heat pumps are generally most effective when generating low temperature heating (less than 60°C), which makes them best suited to newer buildings designed for low temperature space heating systems. Heat pumps run on electricity which, with a typical Coefficient of Performance (COP) of 1:3, means that with the current cost of electricity you could be paying around 20p/kWh for your heat compared to a typical gas boiler, which will provide heat at around 16.5p/kWh.
Combined Heat and Power (CHP) is a cogeneration technology that generates electricity while producing hot water, helping to optimise energy consumption and lower CO2 emissions. CHP units are compact, quiet electricity-generating sets that can produce power at around 11p/kWh while dramatically reducing your heating loads. They are usually installed within existing buildings, don’t require planning permission and can in some cases also provide backup power in case of a grid power cut. You can also use this electricity to power your heat pumps, reducing your heat cost to 3.6p/kWh from the heatpump instead of the 20p/kWh when using the grid to power them.
According to the Energy Bill Relief Scheme Guidance for CHP, where the scheme CHP registered capacity under Combined Heat and Power Quality Assurance (CHPQA) determination is less than 5Mwe, the Department for Business, Energy and Industrial Strategy (BEIS) consider that reducing relief would be administratively burdensome and therefore full relief will be allowable on all gas used by the CHP. If your registered CHPQA capacity is below 5MWe, you will be able to claim on the Energy Bill Relief Scheme. However, if your registered CHPQA capacity is greater than 5MWe, you will not be able to claim full relief on your gas used.
So, as a summary, the right solution for every business is of course an individual decision. There is no “one size fits all” solution, only the right combination of the best options available. I hope you’ll be making the right choice for your business to help you reduce not just your CO2 emissions, but your energy bills at the same time.
Feel free to contact Helec (email@example.com) to let us evaluate the potential solutions on offer in order to help you make that journey to lower energy costs going forward.