Why energy efficiency is vital to maintaining UK manufacturing competitiveness

THE UK is experiencing a long period of volatility when it comes to energy. Rising costs have become public enemy number one for UK industry, as sectors such as steelmaking and chemical processing struggle to remain competitive within a global market that many claim is no longer a level playing field.

While British Steel was forced to increase the price of all new orders by £250 a tonne in March to cope with rising electricity costs, the chemical sector is also exhibiting genuine signs of distress. Stephen Elliott, chief executive of the Chemical Industries Association, has warned that prolonged high energy costs could see factories reduce operations or foreign-owned firms take their business elsewhere. 

The recent sanctions brought to bear on Russia by the European Union, UK, US and other nations have already acted as a catalyst – prompting many manufacturers to rethink their energy supply strategies.

April 2022 saw the UK government unveil its much-anticipated Energy Security Strategy. The comprehensive document outlines its approach to securing national energy supply, alongside plans to embrace decarbonisation in the long-term and manage shorter-term volatility across global markets. 

But the new UK energy security strategy is not a simple fix. Indeed, it increases the onus on major energy users to continue to develop their own roadmaps to address market volatility and build energy resilience into their own operations. 

Immediate action is needed 

There are huge opportunities for industrial businesses to completely revolutionise their energy use – harnessing power from nuclear, solar, renewables and even hydrogen, but these are all long-term strategies that will take years to implement. 

In the meantime, what’s needed is a top-down focus on corporate energy efficiency that goes beyond procurement and instead involves all aspects of operations. Done well and with tight ongoing management, it can mitigate the impact of energy price rises and support decarbonisation goals, while establishing a foundation for a transition to renewables. 

In an industrial setting, energy is used for production, building services, computing, transport and administrative purposes. We believe that every business has the potential to take 10% to 40% of their energy demand. Even those that have already looked at energy management and implemented some measures will benefit from bringing in expertise to examine in detail what else can be done.

It requires a comprehensive review of every aspect of energy consumption, as well as rigorous attention to around-the-clock monitoring. If you get it right, businesses can not only alleviate the pressures of energy price volatility, but also unlock the capital needed to invest in more efficient equipment and processes for the long-term. 

At Shell Energy, we’re proud to work in partnership with one of the UK’s leading packaging manufacturers, helping to develop an energy strategy that sets a path towards the company’s decarbonisation ambitions. Making such a transition is challenging, given the complexity of the UK energy market. That’s why trust and a shared culture of ‘doing the right thing’ is key. While we have set clear long-term objectives, we still have an eye on tangible cost savings that can be introduced today.

We have also started working with a major industrial conglomerate to provide a secure supply of 100% renewable energy. Concurrent with this, we are undertaking an energy audit to identify potential cost savings across its UK sites.  

Quick energy wins

Many of the quick wins, in terms of greater energy efficiencies, are remarkably simple. Some operatives may keep smaller motors running (even when not in use) thinking that they don’t use much energy. But all such habits, taken together, will impact on energy costs. Real-time monitoring of energy use by department and site will enable anomalies to be quickly identified and dealt with.

Creative thinking about when operations run to take advantage of lower cost energy is also a possibility. Can you run your processes at night and pack during the day? What difference will that make? 

Another option is the installation of occupation sensors that will automatically switch off lights in empty rooms and adjust heating levels in accordance with building use. Every small change can add up to making a big difference. It can ultimately free up cash to invest in more efficient machinery and embrace smart energy solutions. An approach that is gaining ever-more traction among manufacturers.

There is no single solution when it comes to optimising energy efficiency and every business will benefit from bringing in expertise to identify the steps it can take in both the short and long-term to bring their energy use under tight control. There is still a huge role that mitigation and reduction can play in preserving our manufacturing competitiveness. 

Jodie Eaton is CEO of Shell Energy UK

For more information:

www.shellenergy.co.uk

Tel: 0330 094 5800