'Energy Saving Performance Contract' guarantees businesses save money

Companies are throwing away hundreds of thousands of dollars annually because they are operating in badly designed workplaces and using obsolete technology, a leading environmental consultant told the audience at the Chamber's Sept. 25 roundtable luncheon, which was sponsored by CLP Power Hong Kong.

Speaking on Energy, Environment and Cost Savings, Raymond Fong (left), principal consultant for the Hong Kong Productivity Council, said companies can save hundreds of thousands of dollars every year by implementing simple energy conservation measures in the workplace.

"Half of a business' energy consumption is spent on chillers alone," he said. "So if you spend HK$5 million a year on electricity, then HK$2.5 million will be spent on chillers. If you only save 20 per cent of your energy use, you can immediately save HK$500,000," Mr Fong said.

To identify areas where money is being wasted through excessive use of energy, Mr Fong suggests businesses set up an energy conservation committee and appoint a manager to drive measures forward.

The committee would audit the premises to measure energy consumption and then put together a pie chart to illustrate excessive energy usage. Typically, the chart will show chillers consume half of the energy, followed by lighting, he said.

Companies don't need to spend fortunes to retrofit their businesses with more energy efficient equipment to save money.

"If you raise the temperature of your chillers by one degree Celsius you can save 3 per cent of your energy consumption. Another example is to improve the existing controls of chillers by making them automatic. Another easy measure is to retrofit lighting fixtures, which can save up to 30 per cent of lighting costs," he said.

While installing energy efficient equipment promises to save businesses money, Mr Fong said he realises that many SMEs do not have the capital to implement the measures, even with short payback periods.

To solve this problem, the council recently launched an "Energy Saving Performance Contract." The Productivity Council will secure a loan for a business wishing to install energy efficient equipment.

"What we guarantee is that the future energy savings will be more than enough to repay all the initial investment plus interest. This programme will pay for itself," Mr Fong said.

Contracts are available for five- to ten-year payback periods, though the average repayment period companies choose is seven years, he said.