Charging ahead: How better energy management can benefit the construction industry

Posted on 23/06/2014

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In recent years, the construction industry has been working hard to reduce its negative environmental impact.

This is essential, as the sector accounts for as much as 50 per cent of global energy usage, while — according to multi-stake holder organisation Constructing Excellence — around 10 per cent of the UK's carbon dioxide emissions are associated with the manufacture and transport of construction materials, and the construction process.

Factor in the maintenance of buildings and other structures and that figure goes up to 50 per cent of UK emissions.

The sector could, at one time, afford to ignore the problem, but environmental responsibility and sustainability are now at the forefront of corporate activity — with multiple drivers further encouraging construction firms to work towards a greener business model.

The good news is that one of the most effective means of improving a business's green credentials is also one with the potential for delivering significant cost savings: energy management.

Gone are the days when energy was viewed simply as a fixed cost of operations. Now, with spiralling energy prices, growing environmental concerns, and increasing legislation to curb energy wastage and reduce carbon emissions, it is better understood as a finite resource that can, and should, be managed like any other.
Outdated and inefficient energy management systems lead to wastage, which, as with any resource, is a costly and unnecessary drain on finances.  A recent study by the Carbon Trust, for example, found that large UK businesses are spending an incredible £1.6billion on wasted energy each year.

Failing to address energy management policies also leaves construction firms vulnerable to major financial risk.
Energy prices have sky-rocketed in recent years, reflecting dwindling resources, a growing reliance on imported gas, and escalating concerns over energy security.

Since 2005, the average price of gas has increased by over 40 per cent, while electricity has increased by over 65 per cent for non-domestic consumers. It's a trend set to continue, with energy prices predicted to rise by up to 25 per cent by 2020, according to government adviser the Climate Change Committee (CCC).

At the same time, both the British Government and European Union are putting increasing pressure on industry to improve energy efficiency and reduce the UK's collective carbon footprint.

In 2013, the UK produced an estimated 463million tonnes of carbon dioxide — the primary greenhouse gas and a major contributor to global warming. Under the Kyoto Protocol, the UK Government has a legally-binding target to reduce emissions and since 2001 has operated a Climate Change Levy (CCL) to provide heavy-energy users with an incentive to increase energy efficiency and reduce carbon emissions.

It has also introduced the CRC Energy Efficiency Scheme, which affects large firms  — those that consume over 6,000 megawatt-hours (MWh) of qualifying electricity per year are obliged to register — and requires compulsory purchase of allowances to offset emissions.

ISO 50001:2011 Energy Management Certification
The new ISO 50001:2011 Energy Management Certification —  the international standard for energy management — has been devised specifically to help businesses improve their energy efficiency. It provides an effective framework for improving energy performance, efficiency and consumption, and integrating this into management practices. 

The standard gives construction firms an understanding of where energy is being used and where it can be saved on and off-site. Significant savings could, for example, be achieved by investing in energy-efficient cabins, more fuel-efficient fleet vehicles and construction equipment, and a reduction in the use of portable diesel generators.

A 2010 study by Arup on behalf of the Strategic Forum for Construction and Carbon Trust estimated that improving energy efficiency by 15 per cent within the construction industry could reduce annual greenhouse gas emissions by 750,000 tonnes of CO2  and bring energy cost savings of around £180m. 

In addition to bringing significant reductions in operational costs and protecting against future energy price spikes, becoming certified to the ISO 50001 Standard also provides assurance that a firm is meeting the latest regulatory requirements

For example, having ISO 50001 could potentially exempt companies from ESOS (Energy Savings Opportunity Scheme), a new piece of EU legislation which requires member states to introduce a mandatory programme of energy audits for ‘large enterprises’ (those with more than 250 employees or a turnover in excess of £50million).
It also sends out all the right messages about a firm's commitment to energy reduction, best practice and sustainability — an important consideration given that the spotlight is falling more and more on contractors to prove their green credentials during the tendering process, with firms unable to demonstrate this finding themselves at a distinct competitive disadvantage.

The new standard is easy to implement, is designed to cause minimal disruption and will help businesses to implement the processes they need to understand their baseline energy usage and establish a best-practice energy policy throughout the business, including plans, targets and KPIs for reducing energy consumption.

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In recent years, the construction industry has been working hard to reduce its negative environmental impact.