Inefficient catering equipment costing the industry £90m a year

A study showing that UK companies in the hospitality sector waste more than £90m a year on unnecessary energy expenditure proves it’s not always what equipment you buy, but how you use it.

Analysis conducted by the Energy Efficiency Financing (EEF) scheme suggests small and medium-sized enterprises in the UK hospitality sector are overspending by nearly £92m per annum on their energy bills as a result of inefficient technology and old equipment.

It’s a shocking amount that highlights the extent of wastage taking place in the hospitality sector, despite a growing focus on running costs and a commitment to buy green from many operators.

The EEF scheme used a mixture of proprietary data and official sources to carry out its research, which involved analysing the energy expenditure of selected key industries to estimate their annual energy overspend.

Having scrutinised each sector’s use of lighting, heating and hot water, cooling and ventilation, and other areas of energy consumption, the EEF study reveals that potential energy savings of over £414m could be achieved per year by the UK’s service sector SMEs were they to invest in more energy-efficient equipment. Of that, some £90m is represented by hospitality SMEs.

While commercial catering equipment is clearly only one element of that, it is likely to be a significant one. Previous research has shown that over a 10-year lifespan of kitchen equipment, more than 80% of an operator’s money is spent on energy consumed and less than 20% on the equipment itself.

“Many firms feel discouraged from investing in green technologies because of insufficient access to capital”

The EEF scheme, which is a joint initiative between the Carbon Trust and Siemens Financial Services, aims to make finance for the acquisition of energy-efficient and renewable energy equipment more accessible and affordable for companies, in particular SMEs, in an economic environment where business lending remains tight.

Data from Bank of England shows the annual rate of growth in the stock of SME lending to have shrunk since the second quarter of 2009. This, says Darren Riva, head of green financing of the EEF scheme, is actually contributing to the inability of some companies to afford the most sustainable equipment on the market.

“Today’s tightened credit environment makes it increasingly difficult for SMEs to obtain affordable funding as traditional lenders have become more risk-adverse in their lending policy,” he says. “Consequently, many firms feel discouraged from investing in green technologies because of insufficient access to capital. However, with funding available from innovative schemes like the EEF, where expected savings pay for the investment, organisations can now act on their green endeavor without having to worry about upfront capital.”

Myles McCarthy, managing director of Carbon Trust Implementation Services, says that by investing in energy-efficient equipment as well as renewable energy technology, businesses can reap significant energy savings and cut down on their energy bills.

“Any sort of green investment is a step towards saving money, improving business competitiveness, and being a responsible citizen,” he argues. “Organisations that recognise the long-term benefits brought by energy efficiency will no doubt be better positioned than their competitors to grow their businesses more sustainably and profitably.”