Only 13% of British manufacturers believe that ESOS, the government’s leading energy efficiency policy, is actually helping improve the business case for investment in energy efficiency and just 9% are involved in demand-side response. Manufacturing body EEF has called on the government to rethink policy and support as they believe this is a massive missed opportunity.
However in its latest report it also states that business should take the initiative by putting in place proper energy management to realise substantial savings. The report found that by taking this step as well as undertaking low or no cost measures that are identified in energy audits will reduce energy bills by an average of 4%.
Analysis of 70 members’ sites identified that using capital expenditure to replace equipment such as motors, drives and lighting, as well as building proper energy management systems and optimising heating, ventilation and compressed air systems could deliver large energy savings with an average payback of 20 months.
The report states that in 4 years around £13bn will added to energy bills to support the capacity market and low carbon generation, however EEF says that there is no government support for energy efficiency. It also wants more incentives for SMEs which should include tax breaks for energy efficiency investment.
The EEF has suggested a ten-point plan including reforms to the ESOS scheme and electricity demand reductions programmes, which will in turn enable UK manufacturers to become stronger when faced with economic uncertainty and drive demand reduction.
The report also suggests that more work must be done by National Grid to make things more equal for demand-side participants in the balancing market despite the demand-side response appearing to have made significant gains in the capacity market. It calls for National Grid to also reform the Triad charging system as part of a larger review of network charging.