Can your company pay less for energy?

How can companies use intentions of politicians to increase the effectiveness of their operations? Is it possible to pay less for electricity in the era of constant news on ever-increasing prices of energy? Of course! There are at least four ways to achieve so!

The European Union has agreed on five strategic objectives for the 2010-20 decade, which are stated in Europe 2020 document. EU intention is to maximize the number of workplaces and investment in research and development, develop education system and fight exclusion and poverty, but also the EU wants to minimize the human impact on climate change. This last objective is to be achieved through decrease of greenhouse gas emissions by 20%, bringing the state in which 20% of energy is produced from renewable energy sources and increasing energy efficiency by 20%.

Due to the mixed experience of the countries most involved in the development of energy production from renewable sources, the European Commission in the first place focuses on increasing energy efficiency as a way to reduce CO2 emissions. This will also be reflected in the Polish national operational program governing the use of EU funds in the 2014-20 period – Infrastructure and Environment. The planned allocation of this new budget assumes expenses similar to the previous level in the field of energy security (in ending budget it was 958 million euro and in the upcoming one it will be 1 billion) and the promotion of renewable energy sources (down from 392 million to 338 million euro). The budget of third subcategory of Operational Program Infrastructure and Environment on energy efficiency has almost tripled (increased from 359 to 1190 million euro). In addition to these subsidies, certainly the beneficiaries will be able to benefit from grants in the regional programs.

The last „political” aspect that is worth mentioning in the context of optimizing electricity bills, is the government support on  dissipation of the energy sources in Poland. This is evidenced by both planned subsidy landscape, the way to stimulate producers of renewable energy as well as how politicians harmonize Polish energy law with EU directives. How then a company should act to pay less for energy?

Revision of the existing state

The energy audit seems to be the first step to be taken. Large, energy-intensive production sites must reckon with the expense for this purpose reaching hundreds of thousands of zloty. For medium-sized and smaller companies such audit may cost as little as several thousand PLN. (Depending on the range of activities you can attempt to obtain grants for such a purpose.) Observations show that the investment in the audit quickly pays off. The result of this audit helps in the analysis of the structure of energy expenditure, which later allows deciding where to look for savings and how these savings can be achieved. An important aspect analyzed in the course of the audit may be level of passive energy (inductive and capacitive). Sometimes, if applicable, an energy consumer spends up to a quarter of the charge (due to penalties) due to cross reactive power indicators. Knowing this you will need to install a capacitor bank that can pay for itself within a year and a half.

Adapting the energy supply contract to the real needs

Another aspect that may be optimized thanks to energy audit is the parameters of a contract that we have agreed with our energy supplier. Among these, the most commonly optimized is a proper tariff selection by taking into account the specificities of energy consumption and power level ordered to fit actual needs. Also quantity of used power matching with the declared level is important to examine. We have to remember that anyway we will be charged for the contracted power level even if we do not consume it all. But on the other hand we have to reckon with multiplied charges for over consumption of energy. Those extra charges can easily be at the level of tens of thousands zloty yearly.

Energy supplier

As the energy distribution in Poland is de-regulated recently it is worth to exercise competition and compare quotations from different suppliers. Analysis of the offer from distributors, other than that with which we are currently bound, may help to reduce the cost of active energy. Depending on how large consumer of energy is a company you can also think about joining one of the purchasing groups.

Own power source

The last aspect, which may be displayed due to the audit, worth taking into account, is to invest in your own energy production. The choices of the type of source, the installed capacity, the types of energy we require, are just some of the parameters to be taken into account in the decision.

Energy sources that can count on the subsidy to reduce the burden on investment include:

– Photovoltaic panels – good source in case of a favorable geographical location of the plant, dispose of the corresponding surface to install the panels and the location allows minimum shading; this may be the appropriate power source for companies consuming electricity primarily during the day;

– Windmill – this source, also requires a favorable geographical location of the plant and is appropriate for the companies that consume energy around the clock;

– Biogas – a source for a company with access to waste adequate for biogas production;

– Cogeneration turbine – is the optimum source for the companies that convert their own biogas or purchased gas and convert it to the electric current and the heat which later will be utilized for the own technology, heating or cooling.

Considering the state of present legislation and funding, the power of the source should be adopted in a way to minimize the risk of any surplus of produced energy and to eliminate the need for connection to the power grid. This approach significantly simplifies the procedures related to the investment permitting, but also makes it easier to operate.

Grants for own power

Currently there are two potential financing sources for the facilities producing their own power, the programs: Bocian (Stork) and Prosument.

The first one, Bocian, aims at limitation or even complete avoidance of CO2 emission by increasing energy production from renewable sources. It may include funding for the construction, expansion or reconstruction of facilities using renewable energy sources:

– Photovoltaic power generation between 200kWp and 1 MWp

– Windmills up to 3MWe,

– Small hydropower plants up to 5 MW,

– Biomass-fired heat source up to 20 MW,

– Biogas power stations understood as facilities generating electricity or/and heat using agricultural biogas from 300 kWe to 2 MWe (the grant may cover agricultural biogas plant, in order to produce the gas for own direct processing or distribution to the grid),

– Generation of electricity in biomass cogeneration up to 5 MWe

– Systems that obtain their energy from geothermal waters from 5 MW to 20MWt.

Bocian subsidizes the investment in form of soft loan between 30 to 75% of the costs (min 2 million, max 40 million PLN) for a period not longer than 15 years. The preferential interest rate is WIBOR 3M -100bp, but not less than 2%. Unfortunately, the program does not provide any redemption of the loan. We should not forget that preferential interest rates could bring hundreds of thousands zloty of savings compared to commercial loan. Choosing the appropriate installment of the loan can fit into the savings stemming from its own sources of energy so that during loan repayment you will avoid frustration, and after loan is paid back you will enjoy the savings. The call for proposals is open and continuous. The program runs from 1 January 2014 until budget is over. To apply you should be prepared to have a fairly mature project and gather the following documents:

– A copy of the application for a building permit or building permit if you have one,

– Concession Promise from URE (unless you insist to sale energy surplus to the grid) and contract with the energy distributor,

– Reliable financial engineering (own funds, loan, bank promise).

The second program, which is worth consideration when planning an own energy source with a lower power output is Prosument. This program is directed to individual households, communities and housing cooperatives. Prosument includes support for projects focused on the purchase and installation of small – and micro- renewable installations for the production of heat and electricity, such as:

– Photovoltaic systems and small wind turbines up to 40 kWe,

– Micro-biogas plants up to 50 kWe,

– Solar panels and heat pumps with an installed capacity of RES heat up to 300 kWt,

– Forest and agricultural biomass-fired heat sources to 300 kWt.

Funding from the Prosument has a soft loan form: for individuals the amount is between 100 and 150 thousand zloty and 300-400 thousand zloty for communities and housing cooperatives. The loan interest rate was set at WIBOR 3M -100 bp, but not less than 2%, and the loan is granted for a period not exceeding 10 years. The program currently is under public consultation and the formal requirements are not yet known. The good news is that authorities still consider the possibility of a partial redemption of the loan after the completion of the project covered by the subsidy. Start of the call for proposals is expected in the third quarter of 2014.

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