Sustainability: Energy smarts

It might not sound as exciting as the next i-phone but energy efficiency may yet turn out to be killer app for business.
Energy efficiency has the potential to become an important engine of growth and when it comes to savings we’re not talking about small change.
EECA estimates that at today’s prices energy efficiency could save New Zealand businesses $1.6 billion every year.
At company level, savings from energy efficiency projects go straight to the bottom line, and compared to other investments like R&D, energy efficiency projects are very low risk, and many have short pay-back of two years or less.
Some of New Zealand’s most successful firms have been banking the benefits of improved energy management for years.
Case in point – 2012 EECA Awards Supreme Winner Air New Zealand has saved more than $500 million since starting its energy savings drive in 2005, and is avoiding 142,000 tonnes of carbon emissions annually.
And it’s not only the big players that are making changing energy management priority. Whanganui Pak’nSave cut energy use by 40 percent by putting in place innovative solutions like making better use of natural light with skylights and using outside air for free-cooling to reduce the need for air-conditioning.
But cost savings are just part of the story. The myriad spill-over benefits for business range from better health and safety outcomes, to improved employee productivity and reduced maintenance costs.
Improved fuel efficiency in the transport sector is great example of how energy efficiency can deliver for firms and the wider economy.
Most businesses that use heavy vehicle fleets can cut fuel costs by at least 10 percent through maintenance, driver training, improved fleet management and vehicle selection.
This means the average firm of 25 trucks could save around $130,000 on its annual fuel bill, but it also means fewer accidents, lower maintenance bills and more relaxed and engaged drivers.
If all trucks used 10 percent less fuel (and some fleets are already reporting savings of around 20 percent), our national fleet would spend $130 million less on fuel every year.
When the country’s heavy vehicles use less fuel, the road ahead becomes smoother for all businesses. If New Zealand can become less dependent on foreign oil imports, our balance of payments will improve. Fuel efficiency also helps reduce carbon emissions, helping NZ Inc meet the challenge of climate change.
While early adopters like Air New Zealand have been reaping the rewards for years, others have the potential to join what is becoming quiet revolution for some of the world’s leading companies.
In the US improved energy management has provided shot in the arm for companies like Wal-Mart, IBM and Dow Chemical who are looking for new engines of growth.
There have been encouraging signs in this part of the world over the last few months with some of New Zealand’s biggest companies and industry groups committing to long-term energy management plans.
The likes of Fletcher Building, meat processors ANZCO and Silver Fern Farms, and the New Zealand Retailers’ Association have put in place energy management plans that are set to save millions in energy costs and lead to improved productivity.
Nearly 70 percent of this country’s energy is used by the private sector. Through better energy management, our firms can become more productive and profitable.
The challenge for business is recognising the role that energy management plays as catalyst for growth – enabling transformation in their performance, regardless of market conditions.
By realising their energy potential, our businesses can improve their prospects, strengthen the economy, and help New Zealanders attain the standards of living to which they aspire. M

Ian Niven is EECA BUSINESS general manager. Part of the Energy Efficiency and Conservation Authority, EECA BUSINESS helps firms reduce energy costs and improve productivity through better energy management.

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