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Save your energy with a little help: Print21 feature

Tuesday, 24 September 2013
By Print 21 Online Article

In the face of on-going electricity and gas prices rises, many printers are turning to energy efficiency experts to help them reduce energy consumption and cut costs. Peter Hawkins looks at what these services can deliver and how to find the right external partner.

Employing strategies to reduce fixed costs is becoming increasingly important due to the significant impact on the bottom line. The old adage that you ‘can’t save your way to growth’ rings true but significant opportunities exist for reductions in operational costs, particularly around energy expenses. In an industry like the printing industry where net margins at 10 per cent are not uncommon, a 10 per cent or $10,000 saving in energy expense is equivalent to securing a sales order of $100,000. I know which is the easier option and the one I would go for.

One of the easiest quick wins is through energy efficiency. This is a must for every printing business due to the continual uncertainty with electricity and gas price rises. But, remember, cost reduction requires a robust and methodical approach to deliver the cash to the bottom line.

How much have energy prices really risen? Up until 2007, retail electricity prices increased at about the same rate as inflation. But from mid-2007 onwards, electricity prices have risen rapidly, with NSW and Victoria seeing increases of more than 100 per cent above the national average. In fact this year (2012-13), electricity prices increased by 14 per cent, continuing the trend of double-digit increases which started in 2007. And there are no signs it is going to stop. In March 2013, the Australian Energy Market Commission published a report on future electricity price trends in which it estimated that, nationally, the aggregated distribution network price will increase by 6 per cent annually from 2013 to 2015.

Similarly, we are seeing increases in gas prices with NSW facing an average 8.5 per cent hike in gas bills from July 1 2013, adding to concerns that a nationwide surge in gas prices is inevitable.

Make real savings

Just as there is innovation in printing, so there is innovation in energy efficiency. Chris Hay, CEO of energy efficiency consultants Mojarra, is working closely with a number of Australia’s leading printing companies to identify and deliver real and significant cost savings through energy efficiency.

Hay says: “Whilst every site and project is different, typical solutions for our printing clients have involved different combinations of heating, ventilation, air-conditioning, lighting and lighting controls, power factor correction, voltage optimisation, optimisation of building management systems, renewable energy systems and energy management systems and processes, and using energy efficient plant and equipment.”

He adds that the most successful energy efficiency projects have a process that identifies the savings opportunities for a site and ranks these based on their potential to deliver sustained and significant savings and to meet return on investment criteria.

“You then need to ensure on-going measurement and verification of the savings. This is what you’re paying for and the value flows from the on-going delivery of those savings.”

Finding the right partner

So should you engage external partners? Often the opportunity costs are ignored in evaluating whether or not to involve external partners. Most organisations are tempted to have a go at reducing costs on the basis of ‘how hard can it be?’ But the impact of delays, poor execution, and missed opportunities will outweigh the cost of investing in professional help.

From my dealings with a number of external partners, these are the questions you should ask yourself before choosing a partner.

  1. Is your external partner product independent? An independent provider will ensure the best solution for your site for your particular needs.
  2. Can your external provider deliver the projects? Engage a company that guarantees savings and will execute the project end-to-end. That way you avoid the finger pointing if the savings are not delivered.
  3. Can your external provider help identify funding opportunities that may exist for your projects? Don’t miss out – there is a range of grants and finance available for energy efficiency projects that can significantly improve your payback.
  4. Is your external partner experienced? Engage a company that is a recognised leader in energy efficiency and delivers a turn-key solution. It’s a specialised field and you need to rely on them. This will also allow you to focus on what you know best, which is running a printing business, and get them to focus on what they know best – delivering cost savings through energy efficiency.

Printers have two options: either do nothing and be at the mercy of the energy suppliers as prices continue to rise, resulting in year-on-year increases in costs, or invest in energy efficiency programs from experts who will work with you on guaranteed savings, eliminating investment risk.

Peter Hawkins is business development manager for Printing Industries. He has a long history in media and marketing including director of commercial business, Fox Sports, and publisher and owner of Identity Publishing. <peterh@printnet.com.au>.

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