How to Cut Industrial Energy Costs Without Cutting Production
The Energy Cost Crisis Facing UK Industry
UK industrial operations are facing unprecedented energy cost pressures.
Since 2021, industrial energy prices have more than doubled, with some businesses seeing increases of up to 150%. These rising costs are squeezing margins and threatening competitiveness.
But here’s what many industrial operators don’t realize: you can significantly reduce energy costs without reducing production output or quality.
Today, I’ll share proven strategies that are helping our industrial clients save thousands on their energy bills while maintaining—and in some cases improving—their operational performance.
Understanding Your Energy Consumption Profile
Before you can effectively reduce energy costs, you need to understand exactly how and when your facility uses energy.
Most industrial operations have a surprisingly limited understanding of their energy consumption patterns. They see the total bill but don’t know which processes, equipment, or times of day are driving their costs.
An energy audit or assessment can reveal:
- Which equipment consumes the most energy
- When peak demand occurs
- Where the biggest inefficiencies exist
- Which improvements will deliver the greatest ROI
This data-driven approach ensures you focus your efforts where they’ll have the greatest impact.
Demand Management: Timing Is Everything
One of the most effective ways to reduce industrial energy costs is through strategic demand management.
Many industrial energy tariffs include demand charges based on your peak consumption during a billing period. By smoothing out these peaks, you can significantly reduce your overall costs.
Effective demand management strategies include:
Load Shifting: Moving energy-intensive processes to off-peak hours when rates are lower.
Peak Shaving: Using on-site generation or energy storage to reduce grid demand during peak periods.
Sequential Equipment Startup: Staggering the startup of large equipment to avoid demand spikes.
One chemical processing plant reduced their annual energy costs by £68,000 simply by implementing a sequential startup procedure for their equipment.
Process Optimisation for Energy Efficiency
Industrial processes are often designed for maximum output with less attention paid to energy efficiency.
By examining and optimizing your processes with energy in mind, you can often achieve the same production results with significantly less energy input.
Key areas to examine include:
Heat Management: Minimizing heat loss through insulation, heat recovery, and process integration.
Motor Systems: Ensuring motors are properly sized and equipped with variable speed drives where appropriate.
Compressed Air: Reducing pressure to the minimum required level and eliminating leaks.
Lighting: Upgrading to LED systems with smart controls.
A food processing business reduced their energy consumption by 23% by implementing process optimization measures, with no impact on production capacity or product quality.
Strategic Equipment Maintenance and Replacement
Poorly maintained equipment doesn’t just break down more often—it consumes more energy.
Implementing a preventive maintenance program focused on energy efficiency can reduce energy consumption by 5-15%. Key areas to address include:
Regular Cleaning: Dirty equipment works harder and uses more energy.
Lubrication: Proper lubrication reduces friction and energy consumption.
Calibration: Ensuring equipment operates at optimal settings.
Leak Detection: Regularly checking for and repairing leaks in compressed air, steam, and fluid systems.
When it’s time to replace equipment, consider the lifetime energy costs, not just the purchase price. Energy-efficient models may cost more upfront but often pay for themselves many times over during their operational life.
Energy Recovery Systems
Most industrial processes generate significant waste heat or pressure that typically goes unused.
Implementing energy recovery systems allows you to capture this waste energy and use it elsewhere in your facility. Common applications include:
Heat Recovery: Capturing waste heat from processes, compressors, or exhaust systems to use for space heating, water heating, or preheating process inputs.
Pressure Recovery: Using pressure reduction devices to generate electricity or mechanical power.
Condensate Return: Recovering and reusing hot condensate from steam systems.
A metal fabrication plant we worked with installed a heat recovery system that reduced their gas consumption by 28%, with a payback period of just 14 months.
Strategic Energy Procurement
Even the most energy-efficient operation can overpay if their energy procurement strategy is flawed.
Many industrial operations simply renew with their current supplier without exploring alternatives or negotiating better terms. Others work with brokers who hide their commissions in inflated unit rates.
A strategic approach to energy procurement includes:
Market Timing: Securing contracts when market conditions are favorable.
Contract Structuring: Ensuring your contract terms align with your usage patterns.
Supplier Selection: Choosing suppliers that offer the best combination of price, service, and flexibility.
Transparency: Working with brokers who fully disclose their commission structure.
At Link Utility Consultants, we guarantee to beat any direct supplier renewal quote, with complete transparency on our capped commission structure.
Real Results:
A manufacturing business with operations in East Yorkshire was struggling with energy costs that had increased by 106% over two years. Their annual energy bill had risen from £220,000 to over £450,000.
The approach:
- Conducting a comprehensive energy audit
- Implementing sub-metering to identify key consumption areas
- Optimizing production schedules to reduce peak demand
- Negotiating a new energy contract with transparent terms
The results:
- 18% reduction in energy costs in year one (£81,000 savings)
- Additional 7% savings through operational adjustments
- Improved budget certainty with fixed-rate contracts
- No impact on production capacity or quality
Taking the Next Step
Reducing industrial energy costs requires a strategic, data-driven approach that addresses both how you buy energy and how you use it.
The most successful industrial operations integrate energy management into their overall operational strategy, treating energy as a controllable expense rather than a fixed cost.
At Link Utility Consultants, we specialize in helping high-energy users like industrial operations reduce their energy costs through strategic procurement and efficiency improvements.
Our transparent approach, capped commissions, and guarantee to beat any direct supplier renewal quote ensure you’ll always get the best possible rates without sacrificing control.
Ready to discuss how we can help your industrial operation reduce energy costs? Contact us today for a no-obligation consultation.
