The UK and other parts of the world are facing an unprecedented rise in wholesale gas and electricity prices.
Since January 2021, wholesale gas prices have risen by 250%, meaning that many sectors will face a significant increase in their energy bills- including energy intensive industries like the care and residential home sector.
Read on to find about more about what has caused this increase and our tips on how to best reduce your upcoming energy costs.
The current business energy market
What has caused prices to increase?
There are a number of factors that are currently affecting the wholesale price of gas and electricity:
• Unseasonably Cold Spring
Gas storage usually replenishes in April. But a colder April and May this year depleted gas reserves more than usual. European gas storage sites are about 20% lower than we would usually see for this time of year.
• Gas supply shortages
Gas pipeline flows into the UK have been hampered by Covid-related delays in maintenance of the gas networks in the UK and Norway. Flows of gas into Europe from Russia have also been restricted, including delays to the implementation of the major new Nordstream 2 pipeline from Russia.
• Increased demand
As the world comes out of Covid-19 lockdowns and the economy reopens, there has been a greater demand globally for gas with supply struggling to keep up with demand. High demand in Asia for liquified natural gas (LNG) has driven up prices and restricted supply into Europe and the UK.
• Reliance on gas for electricity generation
The increase in gas prices also has a significant impact on wholesale electricity prices. Nearly 40% of the UK’s electricity is generated by gas-fired power stations, if gas prices rise, the cost of producing electricity in power stations rises to, meaning wholesale electricity costs rise in turn.
• Low Levels of Wind Generation
August and September were weak months for wind generation, which resulted in a greater reliance on gas and coal to generate power, which in recent history has not been needed at this time of year.
Care home operators are facing a 100% increase in their energy bills to keep their residents warm this season.
The average-sized home has around 50 beds and spends £50,000 a year on their gas and electric, which is due to double this year.
High energy consumers
Walk into a residential home and the first thing you’ll feel is warmth. Then you’ll probably notice that lights are switched on even if the sun is shining. Quite likely, several TVs are playing in different rooms.
Care homes are heavy users of laundry and kitchen equipment too, and quite rightly so. Their job is to keep the elderly and vulnerable people comfortable and safe. The residents need to be kept warmer than average, and homes are by their nature 24-hour operations. So high energy consumption goes with the territory.
Care and residential homes are an expanding sector in the UK. There are more people over 60 than under 18, according to Age UK. So, with the future of the planet in mind, the nation needs its expanding care home sector to be as energy-efficient as possible.
Above all, when care homes are operating efficiently, that means more of their precious resources can be focused on what matters most: looking after the residents and training staff.
Energy is typically one of the largest overheads for care home operators, so reducing costs without compromising the standard of comfort and care is important. . According to a recent CBI survey, business energy prices are predicted to grow by almost 30 percent over the next five years. So, enterprises of all types need to use energy more efficiently just to stand still.
When heating is on in unoccupied rooms, or people are opening windows because the heating is set too high, energy is being wasted. Similarly, when televisions and lights are on in empty rooms, that’s a clear signal that energy consumption is not being controlled effectively.
Know what you already use
The first step towards cutting any business cost is to have a clear picture of what is being paid out. Start by checking your premises’ energy bills. A recent investigation by the Competition and Markets Authority (CMA) found that half of the UK’s 5.2 million small and medium-sized businesses have not switched energy suppliers for at least five years. As a result they are overpaying for their energy by an average of £532 per year. Most care homes fall into this category.
When you know how much you’re spending and where the money is going, you’re ready to make savings.
Start with a survey
Conducting a thorough audit is an effective way to start an energy efficiency drive in a care home., look at every detail of energy consumption, and make a note of any potential problems. Then you’ll have the necessary information to start making economies.
This checklist will make implementing energy efficiency simpler:
- Look first for simple measures that can make an immediate difference, such as taking TVs off standby.
- Remember that lots of small steps can add up to significant savings.
- Announce successes to all staff, so they understand the benefits of what they are being asked to do.
- Involve residents, too.
- Care homes tend to be run on procedural lines, so build efficiency measures into the daily routine. Make them part of everyday life.
Seventy percent of a typical care home’s energy bill goes on heating. A modern, well-maintained central heating system is the most efficient way to heat such premises—a far more cost-effective alternative to relying on electric heaters.
Individual heaters are not only inefficient; experience suggests that they are often left on when not needed. Then there’s the health and safety hazard of having cables trailing everywhere.
If you do rely on space heaters, switching to a modern central heating system is an investment that can pay for itself with surprising speed. It will also reduce the home’s carbon footprint.
Keep the boiler maintained
A domestic boiler system is expected to work at full capacity 15 percent of the time over a year. For a typical care home, this increases to around 23 percent. When consumption is higher, efficiency becomes even more critical.
Most care homes are heated by gas or oil-fired boilers, so their age and performance are significant factors in energy efficiency.
Boilers must be regularly serviced, at least annually. And twice a year for oil boilers. A regularly serviced boiler could cost five percent less per year to run. It is also less likely to break down—and a boiler breakdown can be much more than just an inconvenience for a community of vulnerable people.
Consider a boiler upgrade
Any boiler ten or more years old is likely to be wasteful. Modern condensing boilers are up to 95 percent efficient, whereas a 25-year old non-condensing boiler (and there are a lot of them around) is likely to be only 60 percent efficient. That means almost half of the fuel it burns is disappearing without generating heat for the premises.
Investing in a new boiler may seem like an extravagance when the old one isn’t causing any apparent problems. But the greater efficiency means it will pay back the cost in a few years, and provide more reliable service. Insulating pipes, valves and hot water tanks offer additional low-cost ways to minimise consumption and save money.
Improve energy efficiency by degrees
According to Carbon Trust, turning the heating down by 1°C in commercial premises of any kind can lead to an eight percent reduction in fuel consumption. Likewise, a 2°C drop can knock £140 off a £1,000 bill. Residents won’t notice the difference in temperature, but you certainly will when it comes to looking at your statements.
Install low H2O radiators or thermostatic radiator valves
As the name suggests, modern low H2O radiators use less water. This takes less energy to heat, while producing the same amount of warmth.
Thermostatic radiator valves can also promote energy efficiency. They provide more precise control, radiator by radiator—instead of having one heating control for the whole area. This makes them ideal for the larger, common rooms in a care home. Radiators can also be made tamper-proof, so residents aren’t tempted to adjust them.
Control is efficiency
Poor heating control is the most common cause of energy inefficiency. Signs include:
- Having the heating switched on in unoccupied areas.
- Heating too high or low. Likely caused by poorly placed thermostats.
The key is to match control to occupancy, avoiding heating empty spaces. This can be achieved by installing programmable timing switches. If you have these, it’s essential to review the settings regularly as the seasons change.
One of the common causes of energy waste is when a member of staff changes a setting to deal with a temporary problem, then forgets to reset it. So, train staff to look out for this.
Thermostat location can make all the difference
Draughts, sunlight, and proximity to radiators or other heat sources can all compromise the effectiveness of thermostats. So can the lazy use of thermostats as on/off switches.
Even though care home residents tend to need a lot of warmth, they can have too much of a good thing. Stuffy rooms make everyone feel uncomfortable, while wasting energy and money.
Heating should only be activated if the room falls below the minimum recommended temperature, and correctly positioned and maintained thermostats will make sure this happens.
Look into a building management system
This type of advanced system is found in many care homes nowadays. Individual thermostatic controls are all coordinated by the central control, which also takes account of the external temperature to create optimal conditions indoors. It may seem like a significant investment, but the precise control it makes possible can bring considerable energy savings.
Water heating is responsible for 12 percent of the average care home’s energy consumption. A modern, efficient boiler can lower the cost of heating water. Likewise, switching to a combi-boiler means hot water will be available on-demand, rather than having to be stored.
On the subject of water, did you know that businesses in England and Wales are now free to make savings by switching water suppliers? See how much one of our fixed price water plans could save your business.
Here are a few other simple measures that can help to lower the demand for hot water:
- Encourage as many residents as possible to shower, rather than take baths.
- Install water-efficient showerheads—just like low H2O radiators, they mean less water is being used, and therefore less water is heated.
The right lighting is crucial in a care home, especially where residents have eyesight problems. However, as always, the natural alternative should always be preferred to artificial light whenever possible. It is easier on the eyes, as well as on your energy bills.
Nevertheless, there’s sure to be a high demand for artificial lighting in any care home setting, which is why control is so vital. Electricity bills can be minimised by simply switching off lights when rooms are unoccupied. Improved lighting control has shown to reduce electricity use by around 30 percent, even before other measures are introduced.
Motion and occupancy sensors
This type of sensor automatically turns the lights on when someone is in the room, and off shortly after they leave. Across all types of commercial premises, this has been shown to reduce lighting costs by 30 to 50 percent. Many care homes also introduce a hotel-style key card system, so the lights are automatically off when residents are out of their room.
Also known as photocells, sensors detect when there’s sufficient daylight and turn off artificial lighting. These are more precise than timers, allowing for seasonal changes to the hours of daylight and weather conditions. Photocells are especially useful for making sure that outdoor lighting keeps people safe without wasting power.
Low energy lighting
LED stands for “light-emitting diode”, but the LE might as well be an abbreviation for “low energy” because that’s their appeal in a nutshell.
They are the most long-lasting and controllable forms of modern lighting. The latest versions are also inexpensive, and have no warm-up period. Best of all, they allow the lighting to be dimmed, adding further control.
LEDs are rapidly taking over as the mainstream lighting option for commercial premises, including care homes. A simple comparison with traditional tungsten bulbs makes it clear why. A standard bulb lasts up to 3,000 hours and has a maximum luminous efficacy of 20 lm/W. Replace it with an LED bulb, and it will last up to 75,000 hours with a far superior luminous efficacy of 150 lm/W. There are now LED equivalents for most types of fluorescent or incandescent lighting.
Compact fluorescent lamps (CFLs)
Simply switching to a CFL bulb can bring immediate savings of 20 to 30 percent with the same lighting levels and quality. They cost slightly more than conventional incandescent lamps, but have been shown to save up to five times their price over their lifetime.
Slimmer fluorescent tubes
Traditional T8 or T12 fluorescent tubes are still the standard forms of lighting in lots of care homes. However, slimmer tubes — such as T5 — have now been added to the range, and they are far more energy-efficient. Yet, the savings have to be balanced against the need for new fittings.
External lighting is essential at most care homes, both for security and the safety of residents. They are often big, powerful and therefore energy hungry. When replacing outdoor lighting, a switch to the LED equivalent will lower energy consumption, and also save money via the new lamps much longer lifespan.
Clean, well-maintained lighting saves money
Experience shows that windows, skylights and fittings that are dirty or poorly maintained can lead to a 30 percent drop in light levels over a two to three-year period. This happens so gradually that it may go unnoticed—often until someone realises that the home is having to compensate with extra lighting.
The building fabric
All buildings need to be well-maintained for their occupants, and this is even more important for the vulnerable people who live in care homes. A damp or draughty interior is less cosy, causing problems such as excessive humidity. It will also cost more to heat. Many care and residential homes are older buildings, making such issues more common.
Here are some of the areas for improvement in a typical care home:
Ensure that walls, roofs and the building fabric have good insulation — it can play a significant role in keeping care home energy bills down.
Most care homes are large buildings with correspondingly large roofs, through which heat can escape unless that space is properly insulated. A recent report estimates that reducing heat loss through the roof can reduce energy consumption by 12 percent.
Cavity wall insulation can also be a simple way to make a difference if the building is suitable. The same report suggests that this can lead to a six percent saving on energy use.
Check the windows
Old windows, whether single or double-glazed, are a likely route for cold air to enter the building. Fitting modern double-glazed (or even triple-glazed) windows ensure that heat is retained, with a typical three percent fall in energy consumption.
Double down on draughts
Not all energy-efficiency measures are high-cost or hi-tech. Simply draughtproofing windows, doorways, loft hatches and places where pipes enter the building can make an immediate difference. Adhesive sheets, foam sealant and metallic brush strips can all help to keep drafts out, although professionally installed measures are likely to be more effective.
We encourage all of our customers to do what they can in making the smartest decision for their business energy. Give our friendly team a call and we’ll help you through your best options.