Supermarkets are demanding lower prices, while the cost of your energy gets higher. Turning waste into energy through CHP could be the solution.
Waste not, want not
Food and drink companies are positive about the future. According to a recent survey by, Food Manufacture, 75 per cent expect their profit margins to improve over the next year, while 86 per cent see a ‘long-term future’ for the industry. The majority (73 per cent) also expected consumer spending to go up in the coming year.
Not all is rosy, though. Pricing pressure from the supermarkets is weighing heavily on the bottom line (69 per cent) and volatile markets for raw materials are creating big headaches (71 per cent).
As a technical manager for a snack foods firm put it: “Manufacturers are being caught between retailers who are looking for price reductions and suppliers who are putting up their raw materials costs. It’s a very uncomfortable place to be.”
With no let up in the price wars, as the discounters march on, your board will be looking to cut costs and stabilise overheads. This should see their attention turn to energy.
Energy consumption comes second only to turnover in the priorities list for businesses, while a third see energy as a main barrier to business growth and development. It’s certainly a major concern for the food and drink industry, which is the fourth highest industrial energy consumer in the UK.
Nearly two thirds (62 per cent) of food manufacturers quizzed by Food Manufacture say their energy bills have gone up in the past 12 months. Meanwhile, only around a third (36 per cent) will manage to hit the industry target to send zero waste to landfill by the end of this year.
As an energy manager, you’ve no doubt heard of anaerobic digestion (AD), but are you aware of its potential?
Through the process of biodegradation, you can turn your organic food waste into high-energy, methane-rich biogas. For a start, this dramatically reduces your waste disposal costs, whether you have been sending it to landfill or not.
Meanwhile, the carbon-neutral fuel source can be used to generate renewable electrical and heat energy using specially designed and built biogas combined heat and power (CHP) units.
According to the Department for Energy and Climate Change (DECC), CHP is for many organisations as it is, “the measure that offers the most significant single opportunity to reduce energy costs and to improve environmental performance”.
Since 2010, the government has been an active supporter of the well-understood, but thus far underused technology. It’s no secret the government is currently having a tough time in relation to the incentives it pays for a variety of renewable energy projects, but the air should clear in January 2016 when it sets out its plans officially.
You could say, UK energy policy, per se, is having a tough time – and you can’t risk the lights going off. A CHP unit powered by natural gas could help to cut your energy use by 30 per cent. With prices predicted to go even higher, using waste to create your own energy can shelter the business from the vagaries of external markets.
Last week, the deadline passed for firms to submit details of their energy audits to DECC under the Energy Saving Opportunity Scheme. By the end of December 2015, we could have a deal signed in Paris to reduce global emissions of climate change.
What does that mean for you? Environmental regulation will only get tighter. Where does CHP fit in? The plants can reduce on-site carbon emissions by around 20 per cent when compared to conventional forms of generation.
Food and drink manufacturing is run on increasingly tight margins.
Pressure to reduce costs and overheads will only intensify as the supermarket price wars continue.
Energy is a major cost, but the bills are only going up.
Renewable energy generation using organic waste could be the solution to cutting your waste costs, energy bills and help meet environmental regulations.
20 per cent cuts in energy use and 30 per cent in carbon use are possible using combined heat and power (CHP).
Learn how you could significantly reduce energy costs and meet environmental regulations by taking advantage of AD.
Topics: Food and Drink Manufacturing