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Reducing energy costs in the sports and leisure sector

Managers think energy efficiency first to stem rising costs

The sports and leisure industry is facing mounting pressure to keep up with higher customer expectations, while managing rising operational expenditure. That was the key challenge raised by businesses attending London's recent Sports & Leisure Forum.

We met with managers and directors from golf, tennis and football clubs; local authority leisure services; private health clubs; universities and schools, and holiday and leisure groups.

Managing impact of rising energy prices

These were different types and sizes of business, but all shared the same concern about the high cost of energy and the impact this is having on input costs and margins.

There was a general consensus that smarter energy purchasing will only have limited impact in mitigating rising energy costs, particularly since the highest portion of an energy bill is now non-commodity charges, which are largely fixed.

Against this economic reality, all of the businesses we spoke to recognised that they needed to do more to reduce energy consumption in order to tackle cost pressures. However, a big barrier to implementing energy saving initiatives is a need to protect their CAPEX budgets, which are designated for facilities and equipment improvements, etc.  A number of delegates shared a reluctance to invest capital funds in the plant room and 'invisible' measures that will do little to improve their customer facing value proposition.

Although some of the businesses we met had implemented some of the 'low hanging fruit' energy saving opportunities, such as upgrading to higher efficiency LED lighting, most had taken a piecemeal approach and still had a long way to go in optimising energy performance.

Energy demand reduction

Our work across the sport and leisure sector has proven the benefits of focusing energy efficiency initiatives on lighting and heating, ventilation and air conditioning (HVAC).  According to Carbon Trust research, lighting alone can account for up to 20% of total energy costs in the leisure sector.

After minimising energy demand in this way, there are often further big gains to be made by using distributed energy resources, particularly combined heat and power (CHP). Due to the high and extended heat demand of sports and leisure businesses, this technology is well suited to the industry, with some delegates already using it. Currently, the cost effectiveness of CHP is particularly strong because the market price of natural gas (the input fuel) is much lower than the price of grid supplied electricity, which it offsets.

Protecting CAPEX budgets

The financial viability of CHP and HVAC efficiency improvements is evidenced by the availability of funded solutions. With a need to protect capital budgets, delegates were interested to hear about our energy saving agreements, where we fund a combined package of CHP and associated energy efficiency measures, such as new lighting, pumps, controls, plant room upgrades, etc. Our investment is then recovered by an agreed fixed monthly fee, which is covered via the savings generated from the introduction of the upgraded equipment. Alternatively, we can fund a complete, managed CHP package, paid for via a low-cost power purchase agreement, with heat supplied free. 

Energy solutions for every season

We also discussed the potential for using Combined Cooling, Heat and Power (CCHP)/trigeneration to deal with seasonal energy demand, which was seen as a difficult challenge by some of the businesses. This switches from heating to cooling mode during warmer summer months. Modular systems and thermal stores, and the future potential of battery storage, were also discussed as possible solutions for optimising fluctuating energy demand patterns and maximising flexibility.

Informing and validating energy strategies

One of the big challenges raised by businesses was to see where and how they are wasting energy and to clearly understand their energy performance. Gaining greater visibility and awareness was seen as a priority in targeting energy saving initiatives and in informing and validating suppliers' recommendations and the decision making process. 

One of the solutions we discussed was advanced energy analytics. This takes energy measurement and monitoring to a deeper new level to report on the performance of key energy consuming assets, such as lighting circuits, motors, pumps, and air conditioning systems. New technologies, such as our energy insights solution, Panoramic Power,  can provide a detailed picture of what's happening in various scenarios, e.g.  out-of-hours. This can reveal some surprising findings that aren't visible by looking at metered data. It can also highlight faulty equipment or maintenance issues, helping to reduce operational as well as energy costs.

Prioritising savings

Some delegates had deployed biomass heating projects, with mixed results. Others were interested in exploring other renewable energy strategies and exploring the future potential of batteries and flexible demand response opportunities. However, most of the businesses recognised that the immediate priority is to drive down their energy consumption and that this is the first step in delivering the major cost and carbon saving opportunities that they are urgently seeking. 

Find out how we can support leisure businesses energy saving strategy and learn how our customers in the leisure sector are benefiting from advanced energy saving solutions