Reducing Energy Costs for Pharmaceutical Manufacturers

While the acute phase of the energy crisis appears to be over and wholesale prices are now tumbling, UK businesses are still face significant cost pressures. Energy bills have come down somewhat for end users, but the reductions in the wholesale market haven’t yet filtered through. Prices are still above pre-pandemic levels, and the annual increase in prices due to elevated autumn and winter demand is getting closer. The challenge and cost of the UK’s energy transition continues to inject additional volatility in energy markets. 

For energy-intensive sectors, concerns about their energy costs remain a high priority. One of the most impacted groups in the UK has been pharmaceutical manufacturers, as energy costs combine with elevated raw material and supply chain costs, applying further cost pressure. While many of those costs are out of the hands of individual organisations, reducing energy costs is one area where pharmaceutical companies can have some direct control. 

Cost Pressures on Pharmaceuticals 

A survey in early 2023 found that 80% of pharmaceutical companies had been forced to make changes to counter rising energy bills. 36% described those changes as ‘radical’. An open letter from Medicines for Europe stated that European pharma manufacturers had experienced a ten-fold increase in energy costs. With energy costs in the UK spiking even higher than mainland Europe, many UK pharmaceutical companies have been even more profoundly impacted. At the same time, they faced an increase in the cost of raw materials estimated at between 50% and 160%. 

Certain specific medicines have been impacted more than others. Antibiotics represent a particularly energy-intensive product, with a complex fermentation process and sterility of equipment being vital. Across the wider industry, cleaning and sterilisation processes are the single biggest area of energy consumption, as well as accounting for two-thirds of the pharmaceutical industry’s water consumption. The need for ventilation, especially clean rooms and air filtering, also means that HVAC represents a significant portion of energy consumption. 

Reducing Energy Costs 

The rapid growth of energy efficiency and clean technologies means that there is a broad range of possibilities available when it comes to mitigating energy costs. While this is generally a positive, it also makes the task of selecting the best solution a challenging one. This only becomes a more complex decision when other energy management priorities, such as carbon reduction and power resilience, are factored in. 

For almost any organisation, the first port of call when it comes to reducing energy costs should be improving energy efficiency. Simply using less electricity is often the most significant impact a business can have on energy costs, as well as associated carbon emissions. In practice this will vary depending on the amount of energy that a site is currently wasting, and how energy is procured in terms of a reduction in emissions. That said, there is typically always a way to improve energy efficiency further, whether that is through changes to existing processes that are wasting power or through investment in new technology, such as voltage optimisation.  

To readily identify opportunities for better efficiency, a comprehensive picture of how a site currently uses energy is needed. In turn, this can be used to establish clear goals for energy reduction, as well as properly understanding opportunities that can help to deliver on other corporate priorities, such as decarbonisation. For many pharmaceutical companies, their complex energy usage and high intensity means that an intelligent energy management system can be the best way to unlock improvements, managing usage in real-time to deliver substantially improved optimisation and efficiency. With accurate data capture and monitoring, an energy management system can continue to deliver more intelligent energy usage while also laying the groundwork for new improvements in infrastructure. Whether on-site generation, new production equipment, or changes in behaviour, the initial data capture and optimisation provided by an energy management system ensures that the solution chosen is the best possible fit for an individual customer and site.