Firms Missing out on Energy Efficiency Savings
THE Green Corporate Energy event in London yesterday had a basic message for executives - embrace energy efficiency and enjoy the savings - which many are failing to do.
New research was presented at the event revealing that 51 percent of firms reckon they are realising less than one third of the potential energy savings that would be the result of improving their buildings or processes, so reports BusinessGreen.com.
What is also surprising is that the failure to make the most of these energy savings is continuing, in the face of the opinion by over half the companies that energy efficiency improvements would be paid for in less than three years.
BusinessGreen report that head of sustainability at pension firm Scottish Windows, Dr Craig Mackenzie, told the delegates at the event that his company believe that businesses could make yearly energy efficiency savings "in the ballpark of a Deepwater Horizon spill each year", adding that Scottish Widows generally raise the issue with company directors.
Energy efficiency experts at the event revealed that many companies ignore energy efficiency projects because they differ from the typical capital investments, hence it is outside their thought processes and comfort zone.
BusinessGreen quoted Michael Liebreich, Chief Executive of Bloomberg New Energy Finance, as arguing that businesses needed to take a different approach to efficiency investments, "If you're building Bluewater [shopping centre] you don't expect a return in three years."
Liebreich revealed that clean energy investments, including energy efficiency, had gone up to $243 billion in 2010, a percent rise from the previous year ($186bn).
Green Corporate Energy delegates heard from the gathered experts that energy efficiency investment decisions should be made the same as any other business investment rather than is often the current view, as a capital investment programme. This would leave companies considering external capital as a means of getting efficiency projects off the ground.
BusinessGreen picked up an interesting comment from Patrick Butcher, Group Finance Director of Network Rail, who highlighted that boardrooms need convincing regarding the rates of return on energy efficiency if they are to consider external financing.
He said: "It's not good enough to say that if everyone switched off their lights we'd save the planet. We need to find a way of making the investment process, and the extent to which energy efficiency is embedded in that process, easy to do. It does not start with an ideological debate."
Despite the debate on external or internal energy efficiency funding, Jon Miles, Director of Sustainable Energy Finance at RBS, stated: "People think [energy savings are] too good to be true, [but] there's an awful lot of navel gazing and not a lot of doing. People are always looking for a problem - it's not there. Just go do it."
Wednesday 29th June 2011