The barriers and drivers to energy efficiency for SMEs

DECC - British Gas Business

A report by Enworks, carried out for DECC, found that on average, businesses were missing out on between £5,800 and £12,200 of savings per year. (That’s 18-25% of their annual energy costs.) The report also found that 37% of these savings required zero capital investment.

DECC carried out research focussing on ‘later stage’ barriers i.e. those that occur after a business is made aware of the specific energy improvement actions it could take. The report draws on interviews with businesses as well as data on over 3,000 companies

Manufacturing firms are the most likely sector to implement improvements, and are more likely to be motivated by cost savings and payback periods. Non-manufacturing businesses are more likely to be motivated by customer service and other less tangible factors.

Also while the majority of interviewed businesses said that improvements with a payback period of less than two years made business sense, according to the data only 13% of businesses had implemented these measures and there was no difference in implementation rates for improvements with longer payback periods.

Businesses renting or leasing their premises were also reluctant to invest in improvements to the building that would take longer to pay back than their lease length.

The future of smart meters

However, the DECC expects businesses to realise substantial benefits from the use of smart meters. The smart meter roll out means that more and more UK businesses now have access to a wealth of data on their electricity use. Using this information, people can build a detailed picture of how their business uses electricity, understand where the biggest costs are and take steps to lower them. Many businesses now even have access to personalised energy saving tips and tailored reports about how to save energy and money, all based on their specific business.

The next step is to understand how the information about electricity use can be used to develop time-of-use tariffs, and provide a platform for new energy efficiency products and services.

In its report the DECC takes a technical forward look at anticipated innovation, and product and services development in energy supply and management up until 2020. The key areas of development identified in the report include:

• Power of attorney services
Customers can elect to switch automatically when an offer becomes available that meets a pre-determined annual bill saving.

• Automated building performance evaluation
Energy wastage can be identified more accurately by comparing theoretical models of energy consumption with actual observed data from smart meters.
• Analytics and pattern recognition
Smart meter data can be used alongside information like occupancy, weather and building fabric, to provide customised energy efficiency advice.

• Device disaggregation
Using high granularity data (i.e. 10-second smart meter readings) it could be possible to understand energy consumption per device and learn about asset performance/under-performance.

• Demand-side response (DSR)
Businesses could enrol in DSR schemes, particularly if disaggregated devices could be identified and turned off/down.

Although it’s still early days, the report suggests that the more smart meter data can be used to develop practical, targeted and actionable recommendations for businesses, the more likely businesses will be to act.

What we’re doing

British Gas has already carried out over 340,000 smart and advanced meter installations in businesses across the UK. You can find out more about smart meters here.

In November 2014 we launched a trial of our new Business Energy Insight online dashboard with 3,000 customers, which helps SMEs monitor and manage their energy using the data from their smart meter.

The results from this trial will help us to make further improvements to the service before we provide it to other customers during 2015.

We’re also keen to support businesses to reduce their energy consumption and become more energy efficient. You can find out more here.

The views, opinions and positions expressed within the British Gas Business Blog are those of the author alone and do not represent those of British Gas. The accuracy, completeness and validity of any statements made within this blog are not guaranteed. British Gas accepts no liability for any errors, omissions or representations. The copyright in the content within the British Gas Business Blog belongs to the authors of such content and any liability with regards to infringement of intellectual property rights remains with them. For more information about the mix of fuels used to generate our electricity simply visit britishgas.co.uk/business/about-us. You can find information about how to make a complaint at britishgas.co.uk/business/complaints.

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