The UK food and beverage industry is experiencing significant challenges through rising costs due to factors such as inflation rates and supply chains. Over the last few years, the industry has seen many local and global factors impact the daily business operations. From volatile utility costs directly proceeding the COVID 19 pandemic, to a war that has had significant impacts, the road ahead has felt challenging.
We must also acknowledge the immense pressure on supply chains, particularly on suppliers of raw goods and materials. This pressure has been driven by factors such as inflation and concerns over supply security, like reduced availability of ingredients and bad weather affecting crops, leading to a perfect storm of challenges. Whilst there are some immediate solutions to energy there also must be more support from the new Government to encourage greater adoption of on-site generation and clearer pricing on third party charges for energy bills.
There are however strategies to mitigate these rising costs, and some are easier and quicker to adopt than others. Breaking down into simple tasks is often a way that we help customers set out and plan for not only their net zero requirements but also their cost and carbon reduction in the short and medium term.
There are growing pressures to decarbonise due to net zero targets, economic challenges, and shifting consumer values. Not only is sustainability key to staying relevant and maintaining positive brand perception, it also helps achieve certifications like B-Corp, demonstrating a commitment to both environmental and social responsibility.
With over 10 years’ experience within the energy sector, Vital Energi’s Project Development Director, Chris Calder, shares examples of ways in which the industry can start to take control of their energy consumption and build a resilient future.
Data Visualisation & Optimisation
One of the critical first steps to reducing energy consumption is understanding where it’s going. The simple and cost-effective act of installing meters and submeters will give extraordinary amounts of data, which can be used to drive local efficiencies, and reduce the baseline heat, gas and power consumption before beginning larger projects. Clear data allows for easy optimisations, such as turning key plant equipment on/off or up/down at critical times of the day, which from previous experience could potentially reduce energy consumption by up to 30% on sites that haven’t streamlined operations.
Installing a Building Management System (BMS) or upgrading an old control system can reduce consumption by 10-15%, and it can evolve and grow over time to incorporate more assets and buildings.
Visualising and optimising data not only drives down consumption, but in some cases, can create new revenue streams in flexibility markets too.
Onsite Generation & Renewables
When faced with the challenge of reducing carbon emissions, it’s easy to act upon the most obvious thing that emits carbon – the onsite generation. Whilst this is incredibly important, if the first steps are not taken to reduce and rationalise energy, then systems could be installed in the wrong size, which could lead to higher capital expenditure costs, higher operational expenditure costs and larger overall investment. When considering where to start with onsite generation there are some key considerations. Is the data for the site up to date and accurate? This will drive the overall size of asset that is installed.
Installing solar panels is an incredibly cost-effective way of reducing costs by generating electricity that would normally be imported from the grid. In many cases solar arrays can produce up to 30% of the annual electrical demand and even more if coupled with a battery storage device.
Solar generation can then be used to offset the transition to the electrification of heat. Since the cost of electricity still dwarfs the cost of gas then it can often be challenging to replace fossil fuel burning assets over to greener solutions. However, with the inclusion of solar and also the rationalisation of actual energy consumption many customers are able to achieve similar operational costs when moving to a heat pump for example. The installation and management of the heat pump is incredibly important, and one size almost always doesn’t fit all. There are many technical considerations to be made which is why it’s important to consult with an expert when considering this change as swapping a boiler for a heat pump is not a simple like for like transition.
There are also very unique ways to tackle on site generation. Depending on the customer, there can be instances where a waste biproduct of the production line can be used to re-energise the site and reclaim valuable waste. Where there is excess heat, this can be captured and re-used to pre-heat other areas of the site or converted to electricity to power other processes.
Future Technology and Opportunities
There are many cases where a business has recently invested in assets, such as CHPs, and are now concerned about reducing their emissions. There are options available through technologies such as carbon capture. Where there is a business need to use carbon in the process, such as carbonated beverages or in packaging, then capturing the carbon on site and converting into food grade CO2 can be a viable option. This can give a security of supply while also reducing direct emissions. In some cases, CHPs have been installed as power only or power led assets, where the heat is effectively wasted due to low requirement, the best use case for this would be to share this excess heat with those who have a need locally.
Our future will be made up of mini networks of generating assets that share heating, cooling and power demands across borders to make best use of the available generation. There have been very successful case studies of data centres supplying their excess heat to housing developments or other local off takers. Future developments need not mean brand new technologies, innovation can simply be sharing our resources rather than losing it.
As products and technologies evolve, we will see cost reductions come through maturity of market supply. In the meantime, there are present and real solutions to the cost pressures faced by the food and beverage sector.
Carbon Emissions in the Sector
According to the Department for Environment, Food & Rural Affairs (DEFRA), the food chain is responsible for approximately 20% of the UK’s greenhouse gas emissions. The pressure is on the industry to decarbonise not only from a Scope 1 and 2 perspectives but also from Scope 3, where manufacturers form part of the high street supply chain Scope 3 emissions. Retailers are becoming increasingly aware of the need to partner with environmentally friendly suppliers and subsequently that adds to the pressure of the industry to take action. Those who fall into the UK ETS also need to consider the cost of carbon and the potential for this to increase over the years further challenging the bottom line of customers. Some businesses have also been known to relinquish their B-Corp status because the cost of purchasing carbon credits became untenable. As a result, they decided to focus on their own carbon reduction methods and other initiatives that could better help the planet. With the cost of carbon credits increasing and the validity of sources on the market this brings back the attention of what can be done at a local level.
There is a cost of inaction. Although day to day challenges are mounting for manufacturers there is a growing pressure to secure long term futures that include green production of products. Therefore, we must enable that transition by sharing best practices and guiding businesses to a simple long-term strategy. Removing carbon from operations brings with it many cost benefits. The immediate and obvious benefits are seen in the reduction of energy used and the newly created on site generation avoiding the grid. However also has its long-term benefits that strengthen relationships with customers, retail and end consumers.
Next Steps
The UK food and beverage sector is grappling with rising costs driven by inflation, supply chain disruptions, and energy price increases. These challenges have significant implications for both producers and consumers. Simultaneously, the sector must address its substantial carbon footprint. Through a combination of sustainable practices, technological innovation, and supportive policies, the industry can navigate these challenges and contribute to the UK’s broader environmental goals. Addressing these issues not only supports economic stability but also ensures a more sustainable and resilient food system for the future.
There is no one size fits all solution, but the first step for every organisation is to enlist an expert to look at your data, and come up with a bespoke energy solution.
Vital Energi have been able to shape decarbonisation strategies for organisations across the UK including major malt manufacturers, Simpsons Malt, where we’re reducing their carbon footprint by 25,000 tonnes a year, and Muntons, where we have installed a 14MW biomass boiler.
To find out how we can help you take the first step on your net zero journey, visit our website.
