Energia Blog

Ramp up in Norwegian supply pressurises prompt contracts. This bleeds into the near curve as oil pulls far curve lower.

Oversupply at a time of low demand sees prompt prices fall. Curve more resilient as oil stages rally. W’12 67.10p/th.

Warm weather and Eurozone worries sees prompt dragged lower. Curve shows little resistance as oil continues to fall too.

Prompt makes late surge as outage at a North Sea gas plant is announced. Mild weather limits gains. Jun 56.40p/th.

The graph above shows the price movements of the Summer’12 NBP gas contract from Oct’09 through to Jan’12.

The red line represents the price the Summer’12 contract closed at on each particular day throughout the period given.

The 20 day moving average is the price generated by taking the average of the previous 20 days closing prices from a particular day.

The line in black will be a smoother line than the actual price track (red line) as being an average it is not affected by freak spikes or lulls in the market.

This is useful in spotting trends in the market as it is less sensitive to large market fluctuations.

Looking for the less obvious

Most organisations have by now tackled the obvious areas for energy savings in their offices. PCs are routinely shut down at the end of the working day; heating systems have thermostats and timers fitted; lights too are on timers with some organisations going even so far as to install movement sensors to reduce energy usage still further.

But all of these are the clichéd “low-hanging fruit”; they are obvious areas for fairly immediate savings. Payback is quick so the measures are easy to sell both to management and staff. But why stop there? With energy prices only heading in one direction other less obvious frontiers for savings should be explored.

This frontier usually begins at the door of the office kitchen. It’s a place we don’t think about too much because we don’t spend an awful lot of time there – but it is a very significant energy consumer.

Take a standard vending machine for crisps, chocolate and so on. These machines can use up to one unit of electricity per hour just standing there. No one is going to use them outside of office hours so why are they left switched on overnight? Putting them on a timer can save 16 units per day – for a standard five day week office that’s a saving of more than 4,000 units a year or around €500.

You can save even more electricity by taking the sign light bulb out. This is included in the machine purely for marketing purposes in public places and is entirely unnecessary for the captive audience in an office environment.

The next big saving to look at is in drinks vending machines. Why do the cooling systems in these machines have to be left on overnight? They could easily be put on a timer to switch off at closing time and switch on again a few hours before starting time in the mornings to ensure that the drinks are nice and cool for anyone who wants them. The savings here could be even greater than for the confectionery vending machine.

Another fairly standard fixture to look at is the Burco boiler which many office kitchens have as standard. They are undoubtedly hugely convenient for staff who can get their tea, coffee or even pot noodles quickly and easily without having to await a watched kettle to boil. However, when you take these out of a professional catering or food service environment they do not really make any sense from an energy efficiency point of view.

For a start, the high set temperature point of close to boiling consumes an awful lot of energy needlessly. A lower set point, of say 80 degrees Celsius would make a lot more sense from that point of view. But that would leave you having to manually increase it to boiling each time you wanted to use it. They also tend to heat far too much water for the average modern office. Far better to have a few jug kettles on hand and boil your water as and when you need it – you probably need to take a break from your screen anyway so watching a kettle boil isn’t that bad after all.

Moving out of the kitchen, another somewhat less obvious area is the positioning of light fixtures and fittings. Take a boardroom, for example, designers frequently attempt to achieve a particular ambience by placing light fixtures in the corners. This is incredibly inefficient when the light is actually needed in the centre of the boardroom table. Replacing these corner lights with a single central ceiling mounted fitting would be more energy efficient and better for the eyesight of the meeting participants.

Finally, how many times have you heard the hum of air conditioning systems working overtime while a veritable gale is blowing through a window? Many hospitals and healthcare facilities have sensors on windows which switch off air conditioning systems as soon as they are opened; fitting these in offices could deliver major savings on the electricity bill.

Anyone who has ever been involved in a commodity sector will know that price is usually the key determinant in winning new business. The exception to this is when demand outstrips supply and it becomes a seller’s market. In those circumstances the simple ability to deliver outweighs all other factors.

We are certainly not in that position in Ireland at present. During the heady days of the dotcom boom back in the late 1990s there were predictions of looming energy shortages as power hungry data centres proliferated in Dublin’s outer suburbs. The dotcom bubble burst and advances in data storage technology meant that the anticipated electricity requirement would never have materialised in any case.

The economic growth of the last decade did of course create additional demand but this was more than met by significant investments by companies like Energia and others in both conventional and renewable generating facilities.

This brings us to today’s situation; a competitive electricity market where available supply more than equals demand. Quality is a given in the electricity supply market and this should mean that the only differentiator between competitors is price. But this is not necessarily the case.

I strongly believe that any organisation which makes its electricity purchasing decision purely on price is taking a very blinkered approach which will cost them money in the long term. The analogy I use is the difference in purchasing water in open buckets and piped straight to your tap. The latter might be a lot more expensive per litre but you are getting all the water you pay for unlike the former where you’re lucky to get more than 50% of it back to where you need it.

If you buy electricity simply on unit price and do not factor in other value added services to the contract you are almost automatically building inefficiency into your usage.

Energia work with their customers to provide them with real-time analysis of their electricity usage thus helping them to become more energy efficient and alerting them to any points of wastage.

For example, take a retail chain, we would monitor the electricity usage of the individual shops and alert the customer if one of them was using significantly more than the average. This could be the result of faulty lighting or other appliances in the store and early detection can save thousands of euro in the longer term.

This is just one example of why it really is more than just about price. Your energy supplier can deliver a lot more than just a commodity and customers should explore these services and their potential value to them and their businesses before making up their minds.

Energy audits, advice and guidance on becoming more energy efficient and other value added services should always be taken into account alongside price. They are not just nice to have extras; they can and do make a very real difference to the bottom line in the long term.

Ends