How businesses waste money

Running an air-conditioning unit at full tilt to cool down one part of a building, while a boiler blazes away to heat another part of that same building ,sounds like madness – but it’s surprisingly common in New Zealand’s commercial buildings.

It’s just one of the ways businesses are squandering energy, and therefore money, in the course of their day-to-day operations.

The Energy Efficiency and Conservation Authority (EECA) say many businesses could shave up to 20 per cent off energy costs – with the potential energy efficiency savings adding up to $900 million a year across all New Zealand businesses by 2030, if all economic options are adopted.

The good news is many of the fixes are inexpensive, immediately effective and boast short payoff times for the investment. Some even cost nothing. According to some of the market’s energy efficiency experts, here are some of the most common ways businesses are wasting energy.

Poor energy monitoring

Simon Ross, mechanical engineer, Beca: “People leave their buildings running when there’s no one in them. The warm-up cycles also often start way too early in the mornings – and no one is even aware of it.”

Ross says monitoring energy use identifies where it is being wasted and quickly clarifies a plan of attack. It’s a classic case of not being able to manage what hasn’t been measured.

“Once you’ve measured it, it then makes sense to compare your energy usage to others in your industry – to benchmark it.”

Ross points to Beca’s benchmarking of electricity use of Christchurch schools: “When a school can see where it sits relative to another school then they can see the value in reducing their energy usage. Until you give them data to show where they sit, they’re basically only able to compare with how they’ve performed historically – which might be good, or terrible.”

EECA Business has its Energy Management Journey tool set up for precisely this purpose. It’s a free online tool where users input energy usage data, then find out how they’re doing compared to similar businesses.

Compressed air leaks

Pushkar Kulkarni, business manager sustainability solutions, Total Utilities: “Many companies invest in a new air compressor but may not make an effort to find the leaks in the system first. If all of those leaks are found and fixed, they may conclude there is no need to invest in a new compressor.”

Kulkarni sees this scenario on a regular basis. He estimates eight out of every 10 systems could be leaking.

“These systems are very common in New Zealand – particularly in the industries of production, packaging, food processing, waste, yarn and pharmaceutical production.  Over time they may deteriorate or be modified and leaks occur. They can be expensive to run, so the savings from identifying and fixing leaks can be considerable. It’s usually a fairly inexpensive fix with a fast return on investment.”

Uninsulated pipes

Glenn Johnston, Smart Power: “If it’s an exposed pipe in a warm boiler room it’s not as bad but, if that pipe runs outside or through the roof space where it’s a lot colder, the heat loss can be substantial.”

Johnston is used to seeing money go down the drain in the form of energy escaping from uninsulated pipes, used for both heating and cooling.

“Industries where it’s important to insulate pipes include the likes of food processors, hospitals, freezing works, packaging plants – anywhere they have refrigeration or hot water needs.”

Often these pipes are easier to get to than in commercial buildings, making repairs easier and cheaper. Johnston cites the example of a plant his company worked on. The company beefed up insulation of steam and hot water equipment. A $20,000 investment turned into an annual saving of some 250,000kWh, or $11,000, giving a payback period of just 1.9 years.

“When you insulate pipes properly you get an immediate impact,” says Johnston.

Heating and cooling systems fighting each other

Alastair Hines, divisional manager, Enercon: “Heating and cooling systems are often working at the same time. Nobody worries about it too much, because it’s the norm.”

Hines points to one business which Enercon found many of the heating, ventilation and air-conditioning (HVAC) and lighting systems were operating 24 hours a day, seven days a week, even when not required. The HVAC systems also did not have an air temperature dead-band to prevent frequent switching from heating to cooling and vice versa.

That resulted in increased demands on the system and adjacent zones simultaneously heating and cooling.

Hines says this happens in many commercial buildings, typically because the building is poorly controlled. He estimates 10-20 per cent of the energy used for heating and cooling in a building is wasted.

“When you consider heating and cooling account for up to 50 per cent of the total cost of running it, that 10-20 per cent can be a big saving. Adding sub-meters, sensors, and re-programming the building management system all make a big difference.”

First published in the New Zealand Herald on 23 November 2017.

How businesses waste money - New Zealand Herald website

Find an energy management partner by using our Programme Partner Directory.

Programme Partner Directory - EECA Business website