In today's turbulent trading conditions, the NIPA members face many challenges; energy costs are one such challenge.
The wholesale cost of energy is outside the direct control of the members, as energy is a commodity driven by the market. So many, particularly the larger companies are addressing how they can become more self-sufficient, becoming more innovative and proactive in their energy purchase and / or greener by investing in sustainable alternative energy sources.
There are many factors that influence the cost of energy within the SEM (Single Electricity Market) in Ireland. The price of commodities such as coal and oil, the price of carbon and the exchange rate will influence the cost of electricity, even the maintenance cycle of power stations, but one of the major factors is the cost of gas, due to the fuel mix in the SEM.
Over 60% of the total fuels used by generators in Ireland is gas. Over relatively recent times it has increased by more than 40%, contributing to a large increase in the “pool” price. Political, economic and environmental issues, such as the unrest in the Middle East, uncertainty in the Euro Zone and the earthquake in Japan have all had a detrimental impact on the cost of all commodities, which in turn influence the cost of electricity in Ireland.
When a supplier sends a quotation for a new contract not only it is based on the cost of the wholesale energy market, but also the current Regulatory pass-through and SEM charges. These costs, regulated by UREGNI (the Northern Ireland Utility Regulator), are paid to NIE T & D (Transmission & Distribution) to maintain and run the networks. Part of this also goes to the Market Operator to run the functions of the SEM on a daily basis. These costs make up more than 30% of the overall total of your electricity contract”
The wholesale cost of energy is outside the direct control of the members, as energy is a commodity as explained above. However a procurement strategy could simply be that each company can negotiate with more than one supplier, gather consumption data for the members and negotiate with suppliers a preferential, site specific energy prices, or put the data in to a national pool that has the ability to forward buy when prices are low.
For those in the CCA should already be in place, but for all companies an energy programme using energy efficient practices and equipment.
Carbon Trust provide one source of free information, expertise and funding options including web access www.carbontrust.co.uk or telephone 028 9073 4399) surveys, interest free loans and access to competitive finance for such things as Variable speed drives, motors, lighting as well as larger equipment.
Renewable energy strategy
Improvements in wind technology, solar photo voltaics and the enhancement of ROC’s could enable members to benefit from investing in this area.
Watch Videos of Three NIPA Member Companies Wind Turbine and PV Installations - Introducing 8.2 MW of Renewables Capacity and reducing their operating costs.
Michelin Factory Ballymena - Installation of Two Wind Turbines with a combined output of 4.6 MW
Brett Martin - 2.3 MW Wind Turbine Installation Video
Kingspan Environmental - 1.32 MWp PV - 4900 PV panels generating 1.1GWh / year