Stacking Cost Reductions with Smart Energy Management
While the energy transition presents a range of both challenges and opportunities for organisations when it comes to managing their energy, for many the issue of energy costs remains their ultimate priority. While energy prices began to stabilise in 2023 and look to continue to trend downwards in 2024, prices remain double those seen before the energy crisis. In comparison, inflation over the same period was just 11%. Market analysts Cornwall Insight have predicted that energy prices will remain well above pre-pandemic levels for at least the rest of the decade.
Energy costs remain a major headache for many businesses, while finding solutions that also contribute to other priorities, such as reducing emissions and improving power resilience can be challenging.
Transitioning to decentralised, more independent energy usage, reduces a site’s exposure to grid-supplied power and opening opportunities to refine energy management and drive innovation. Typically, the savings from shifting a more decentralised model, such as through implementing a site-wide smart microgrid, are substantial, but are dependent on an intelligent, well-managed approach to optimisation and energy management.
Energy Efficiency
Improving energy efficiency can be one of the most impactful ways of reducing energy costs, often able to deliver a substantial percentage saving while being relatively low in terms of costs. Many organisations may still have some ‘low hanging fruit’, meaning low-cost changes that can eliminate excess energy consumption, as well as the carbon emissions associated with that energy use. This can include behavioural or procedural changes, such as shutting down equipment when not in use, as well as lower cost technologies like LED lighting and voltage optimisation.
Energy efficiency remains a vital tool throughout an organisation’s pathway towards net zero, as well as offering further cost savings and reducing exposure to future energy price shocks. It also has the potential to open capacity on a site where a constrained grid connection may delay or prevent new electrification projects.
Reducing Reliance on Grid
The issue of constrained grid connections leads into another area where smart microgrids can deliver cost savings and more predictable, less volatile energy costs. Renewable generation located on-site, such as rooftop solar, can be another way of substantially reducing energy costs. However, the rapid growth in such decentralised generation methods has left distribution grids constrained, with long waiting lists for grid connection works. Establishing a smart microgrid has the potential to allow these projects to move ahead and begin delivering cost and carbon savings, rather than the typically long waiting times and substantial costs of new grid connection works.
Reducing Operational Costs
Better efficiency across operations as well as energy usage is an important element of reducing overall costs, as well as improving productivity and profitability. One major area that it is important to improve on is power resilience, ensuring a site can operate as normal even during power disruption events. Power disruption can be enormously costly in terms of lost productivity, wasted raw materials and lost data, with overall machine downtime costing UK manufacturers an estimated £180 billion annually.
By combining energy storage, on-site generation and intelligent control software, a site can continue to operate independently of the wider grid until normal power is restored. Even in cases when a site cannot operate fully for the duration of the power disruption, the time that well designed power resilience provides allows for a safe, well-managed shutdown.
Intelligent Optimisation
The increasingly complex ways that sites generate, store and use energy opens huge potential for improvements, including securing further cost savings. One important aspect of this is using storage to maximise the useful output of on-site generation, such as by storing generated solar power to be used overnight. Similarly, a battery can be used to purchase power during off-peak periods, which can then be used later to avoid peak periods and the high grid energy costs that come with them.
Battery storage also has the potential to generate additional revenue for organisations by engaging with grid balancing services. Typically done through an energy aggregator, this allows for payments to be made from National Grid in return for a site making itself available to quickly shift its demand to balance wider grid demand and frequency. However, this can be highly unpredictable, and increasingly is viewed as a potential bonus of a battery storage project implemented to achieve other objectives.
