What does Brexit mean for the future of the food industry?

Whichever side of the Brexit argument you believe, Brexit poses some serious challenges for the food industry, which are predicted to be at their most severe within the next six months to a year, according to a new survey by EEF, The Manufacturers Organisation.

Whilst it’s still early days the value of Sterling has certainly fallen and there is a talk of recession on its way.  Is this good or bad for the food industry?

On the one hand a weaker pound helps exports. On the other a fall in the Pound will make many inputs more expensive. A combination of higher volumes with lower margins will make cost control more important than ever.

One input cost that’s definitely linked to the Pound is that of natural gas. Unless consumption shrinks dramatically (due to a steep recession), a lower Pound almost certainly means a rise in the cost of energy. If energy is a significant part of your overall costs, that’s not good.

So what should the Energy Manager do?  Here are our two mantras to remember as the Pound falls and energy costs rise:

 “Know thyself”

It might sound obvious but it’s amazing how many people with large energy costs don’t measure their energy and water consumption and so don’t have a clear picture of their usage patterns and where the money’s going. As a result opportunities worth hundreds of thousands of pounds are going unnoticed. Luckily measuring and monitoring is getting cheaper and easier to install all the time and in many cases your gas and power supplier can graph your half-hourly use for you automatically. For those looking for more in-depth analysis of their site there are a range of metering options out there from single logging non-invasive clamp on meters to full web based monitoring and targeting packages covering all utilities.

 “Sense check”

After major energy consumption is mapped out it can be systematically worked through,  starting with the highest users, and sense checking against benchmarks. All factories have inefficient pieces of plant that have been overlooked for years while bigger problems are fixed, but now with suitable monitoring these previously unquantified opportunities can be paid some attention.

• Should consumption be so high for such a small part of the plant? Does this equipment need to be on all the time?
• Do temperature set points need to be that high (or low)? Does the duty/standby regime for those boilers still make sense 10 years after it was started?
• Is there any obsolete equipment that could be replaced for a sensible return?
  
  A systematic comb through the equipment list, checking consumption to value, will find the most obvious errors and savings that can be made to start you on the way to running a tight energy ship.

Groupe Lactalis and BasePower enter Combined Heat and Power agreement

Groupe Lactalis, the global leader in cheese and the second largest dairy company worldwide, has made a commitment to significantly lowering energy costs and CO2 emissions in an energy partnership with CHP developer BasePower. Lactalis has signed a Power Purchase Agreement for the installation of a Combined Heat and Power (CHP) system at The Caledonian Cheese Company in Stranraer, Scotland, whose brands include Seriously Strong Cheddar, McLelland Mature Cheddar and Galloway Scottish Cheddar, as well as several private label brands for leading UK food retailers.

BasePower, who will develop and build a fully containerised CHP system on The Caledonian Cheese Company manufacturing site, has financed the Power Purchase Agreement. BasePower will oversee the scheme’s operation, which is projected to generate 77% of all the site’s electricity consumption, supply 24% of heat usage and save at least 2,000 tons of CO2 per year. With construction already under way the project is targeted to be operational by December 2016.

Mark Taylor, Group Managing Director, Lactalis McLelland said:
“In the face of increased competition and uncertain investment in UK energy infrastructure, we are delighted to be partnering with BasePower on this project which underscores our commitment to keep Lactalis at the forefront of cost competiveness and environmental performance.”

George Fowkes, Director, BasePower added:
“This project at The Caledonian Cheese Company site is a perfect example of how energy-intensive industries like food and beverage manufacturing can really exploit on-site power generation to deliver energy cost savings. We are looking forward to working with Lactalis on their next stage of development as Scotland’s most innovative dairy manufacturer.” 

BasePower interviewed in Food Manufacture

Food Manufacture, the leading magazine for the food and drink manufacturing industry, has published an article on the increasing take up of combined heat and power (CHP) in its latest issue.

In an interview with the editor Rick Pendrous,  BasePower director George Fowkes talks about how manufacturers who chill food should look at CHP, now that the economics are more favourable and technology has improved. George goes on to talk about the increasing numbers of companies in the food and drink sector who are adopting CHP and how different financing options can work.

Read the interview on page 37 in the March issue of Food Manufacture, out now. 
 

(c) Food Manufacture 

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(C) Food Manufacture

UK Facing Electricity Supply Gap Crisis

Recent gas and power prices have masked quite a change in how the Government is thinking about energy. Although energy prices are the lowest since 2003 this is not good news for energy buyers in the medium term.

For some time DECC has been forecasting a steady annual increase of £2-£3 per MWh for the non-wholesale component of power. This component is now well over 50% for most energy users, which is why the power price falls have been nowhere near the reduction in the price of gas.

And now Amber Rudd’s recent Energy Policy Reset speech makes it clear that wholesale energy prices are also likely to rise in the medium term.

The key themes in the Government’s new energy policy consist of:

·      Forced retiring of coal power stations, taking capacity out of the system

·      Significantly reduced deployment of large-scale renewables – delaying additional capacity

·      Favour granted to gas-powered stations but no clear mechanism how they will be encouraged

As the UK population continues to grow and the more electric transport we use, the gap between supply and demand will continue to close. Indeed, a recent report published by the Institution of Mechanical Engineers (IMechE) concludes that “under current policy it is almost impossible for UK electricity demand to be met by 2025.”

The report goes on to list a set of eminently sensible recommendations which include:

• Providing incentives to reduce demand
• More investment in R&D for renewables and storage
• Setting timescales and milestones for the build-out of new generation capacity. 

However, these all need several years to take effect and the report concludes that a 10-year timeframe to deliver new power to the grid is very difficult. Indeed, the IMechE says, “Current energy policy can be seen as a move away from energy security.”

So what’s an energy-intensive company to do?

At BasePower we say do the following:

·      First, get as good an idea as you can of where and how you use your energy – power, gas and other fuel. You can only manage what you can measure.

·      Next, use the current windfall you’re getting from depressed energy prices to invest in some energy efficiency measures. The simplest of these, such as LED lighting, have fast paybacks, can be readily financed, and will give your organisation valuable skills in assessing, deploying and benefitting from efficiency projects.

·      Finally, if your annual energy spend on any one site is in excess of £500,000 consider whether you can host a CHP project. CHP engines’ electrical efficiency alone is higher than coal-fired power stations, heat exchangers are efficient and inexpensive and – if you’re more of a user of cooling – an absorption chiller can turn every unit of unwanted heat into the same quantity of chilled water.

So don’t get fooled by today’s low energy prices. Invest some of that energy windfall in avoiding tomorrow’s rising costs.

BasePower joins speaker line up at Sustainable Food Expo & Conference

The Sustainable Food and Beverage Manufacturing Conference on 2 December in Birmingham, is the annual forum for the entire food chain to discuss sustainability issues. With carbon reduction targets and energy prices firmly on the agenda of large energy users, BasePower has been invited to lead a workshop covering these issues and more.

“Configuring Combined Heat & Power (CHP) to maximise its value in the food and beverage industry,” will take place at 10.55am on Wednesday 2 December in Workshop Theatre 2. The food and beverage sector faces fierce industry competition, rising energy levies, and issues around security of supply. In this session, George Fowkes from BasePower will look at the increasing number of on-site power generation (CHP) projects in the industry, the different types of use, and share some examples of good practice.

 For complimentary tickets to the Sustainable Food and Beverage Manufacturing Conference register now. George and the BasePower team will be on stand 6 throughout the show to meet delegates.

BasePower to join 50 world-class speakers at Energy4PowerLive

What are the real business benefits of deploying CHP solutions? BasePower Director, Dan Poulson, will be discussing this and more in the CHP LIve theatre at the Energy4PowerLive conference in London next week.

In a paper entitled: Making the most out of Waste Heat, Dan will address how to make your CHP project happen – optimising the fit and maximising returns to your business.  Too many CHP projects remain in the pile of good ideas that never get built because they are over-sized and badly conceived.  Dan will illustrate a better approach to developing and funding projects that actually deliver cost and carbon savings.

Energy4PowerLive is a world-class conference featuring presentations by over 50 eminent speakers across diverse elements of the power industry. The conference takes place on Tuesday 17 November 2015 at the Park Lane Hilton, London.  To find out more visit: http://energy4powerlive.co.uk

Putting the ‘H’ back into CHP at Nextgen 2015

Nextgen 2015, the leading trade show dedicated to the future of energy generation, is taking place in early October, and BasePower has been invited to take part in a seminar on CHP.

George Fowkes, a BasePower Director, will join industry speakers in: Low Carbon Generation Sources: CHP and its role in decentralised energy systems, scheduled for Thursday 8 October at 10.50am. 

For businesses with high energy costs such as food manufacturing, chilled logistics and data centres, CHP projects promise carbon reduction and significant cost savings, however many projects fail to get past the feasibility stage as not enough uses can be found to capture the heat which is generated.

In a presentation entitled How to put the H back into CHP, George Fowkes will share some of Basepower's techniques for finding and exploiting heat uses, and highlight some of the common mistakes to avoid when embarking upon CHP projects. The session will be chaired by Adam Wray-Summerson of Clarke Energy.

 Nextgen 2015 takes place at Stoneleigh Park, Warwickshire on 7-8 October and is free to attend. To register visit: http://bit.ly/1MRZwGd

Dan Poulson contributes to "Energy from Waste" handbook

Looking for some insight into the terrain, outlook, issues and opportunities in the anaerobic digestion sector? Read Dan Poulson’s anaerobic digestion chapter in Globe Law and Business’ ‘Energy from Waste’ publication, a practical handbook with insights into the issues and opportunities from a number of different technologies.  http://www.globelawandbusiness.com/EFW/Default.aspx

Food Processing magazine June 2015: Is distributed energy coming of age in the UK?

Read Dan Poulson's article in June's 'Food Processing' magazine, which looks at why producing your own electricity onsite is a growing trend among forward-looking food production companies. Visit http://www.fponthenet.net/ to download a digital copy of the magazine.