Energy and business: where are we, and where are we going?

The EU has a clear energy vision – energy efficiency and renewable energy must increase. The various European institutions have adopted policy, created initiatives, and expressed commitment to increasing targets. These policies will affect businesses.

Energy obligations have been placed, at law, on the largest of companies – Non-SMEs – through the Energy Efficiency Directive. National Action Plans include measures targeting the wider business community, including SMEs. We believe that the EU’s energy package brings advantageous opportunities to businesses.

The Investing in Energy Project, led by the Malta Business Bureau in partnership with the Energy and Water Agency and the Malta Chamber, has recently published an environmentaleconomic report on energy in business for Malta. This report is a useful tool for businesses and energy service and product suppliers, as well as for policy setters.

It is based on energy audit reports carried out by Non-SMEs in compliance with the Energy Efficiency Directive. As such, it represents the most accurate snapshot available for industry to date. Information includes a complete list of energy measures proposed to industry, the cost and repayment offered by these measures, their frequency in being recommended to companies. Additionally, numerous interesting details emerge, as well as others that point to the need for additional information gathering.

I wish to highlight some key conclusions: 1) Savings representing an average of around 10 per cent of total energy consumption, through both energy efficiency and renewable energy measures, are possible. 2) The cost of energy auditing averages €7,500 for complex audits of large companies. 3) Energy efficiency is seven times cheaper than renewable energy in terms of cost per unit of energy saved/generated 4) Industry is keen to take up on energy recommendations. NonSMEs, the subject of this report, either implemented or planned to implement most of the presented measures. 5) The 22 surveyed Non-SMEs will have invested over €6.7 million in energy measures resulting from the energy audits surveyed in this report. The savings offered by this investment represent an annual €1 million. 6) Based on the reported cost of measures, the business sectors need to invest between €30 and 64 million to meet the 2020 targets.

To summarise – considerable energy savings are possible. Identifying these savings through expert consultants carrying out energy audits is largely affordable. The largest companies are already investing considerably in energy measures. Energy auditing has proved successful in identifying energy opportunities representing a good business-case.

Going forward, we believe that the following needs to be done:

It is good that the largest companies are carrying out energy audits regularly. The reach of energy audits needs to be extended to large energy consumers within SMEs.

The first set of energy audits carried out in compliance with EU and national legislation identified energy opportunities, and the business-case strong enough for businesses to unlock several million in investment. They also pointed to areas which could continue to yield advantageous savings, yet the examination of which could be improved. The potential of operational upgrades and transport efficiency should be further explored in future energy audits.

The investment made to date is already considerable. The investment required to reach the 2020 targets is even more considerable. The 2030 targets will require very large investment. It is important that the energy financing options available to businesses increases.

Malta has an excellent compliance rate with the Energy Efficiency Directive’s obligation for Non-SMEs to carry out energy audits. This was only possible through the collaborative approach taken by the authorities, stakeholders and businesses. This collaborative approach should be built on to bring even more success in this area.

The reach of energy audits needs to be extended to large energy consumers within SMEs