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Understanding how your business uses energy allows you to manage your consumption effectively. It means you can set targets for improving energy efficiency and reduce your energy costs and carbon emissions. You could reduce energy consumption by up to 20 per cent, but most businesses aim for a 5 per cent overall reduction in their first year.

Energy monitoring and metering process

You'll need to have a process for monitoring and measuring your current energy consumption. This involves:

• analysing your energy bills
• measuring your use of each different type of energy
• recording energy use - larger organisations might consider installing different meter technologies that gives information about different areas of the business
• regularly collecting data on energy use by reading meters and sub-meters
• analysing the meter data to see where you can save energy - for example, looking at the effect on energy use of things like the weather or production levels

Put in place a monitoring and targeting system

A monitoring and targeting (M&T) system allows you to compare data about energy consumption to the things that affect it, such as the weather, production figures or other variables. You can then see where energy waste can be reduced in buildings, processes and vehicles.

To help you meet your targets, you may want to appoint an energy manager who will be in charge of the M&T system and responsible for collecting and analysing your energy data.

To put your M&T system in to practice you'll need:

• energy consumption data
• data on the factors that affect your energy consumption, such as weather conditions, production figures or other variables
• methods for calculating your expected consumption

To manage your energy usage well you need to measure your consumption accurately and interpret the results.

Reading your energy meter

Your energy bills show your energy consumption and the current tariffs. It's important to check your bill against your meter reading to make sure you're only paying for what you're using.

Digital meters are straightforward, but the old dial meters (analogue) can be more difficult to check. To read an analogue meter, start with the smallest unit first and read the dials in order. When the hand is between two numbers write down the number it has just passed. The 1/10 reading is generally ignored.

You should take meter readings regularly and you may need to install a half-hourly meter for greater accuracy.

Plot your energy data in a spreadsheet

To plot the data, record your meter readings as a graph of energy against time. Identify your 'base load' (the reading when no activity is taking place) and if it seems too high, look into it.

Where the graph shows high energy usage, check that this is what you would expect. If anything seems suspicious investigate further. You can also compare daily graphs to identify where inefficiencies are occurring.

Understanding energy bills

The type of bill you get depends on how much energy you use.

For electricity bills, your site is classified as 'code 5' or 'non code 5' depending on how much electricity you use:

• code 5 bills are itemised by how much electricity is used at specific times and how much it costs
• non code 5 bills are less detailed and are based on either physical meter readings or an estimated level of consumption

The type of gas bill you get depends on whether you are classed as a large consumer. Large consumers' bills are generally based on daily meter readings and show the consumption and how much it costs. Other consumers' bills are sent monthly or quarterly, based on actual or estimated readings.

Your monitoring and targeting scheme should alert you to any exceptional excess energy consumption by comparing your estimated and actual usage.

You can base your estimate on either:

• the energy you used in previous periods
• the factors that affect the amount of energy you consume

Basing your energy estimate on previous periods

To base your estimate on your energy use in previous periods you simply compare this month with last month, or this year with last year.

This method is best if your energy use data is seasonal, for example shops that stay open late during the pre-Christmas shopping period.

You may find that this method is too simplistic and that it is more useful to make your estimates by relating energy use to the things that affect it.

Basing your energy estimate on the factors affecting consumption

You should use this method if there are clear factors that cause your energy use to vary, such as:

• production throughput
• production processes
• the weather
• hours of darkness

Once you know what causes your energy use to vary, you can then begin to estimate your expected usage by measuring the effect each factor has on it.

There are different types of energy meter available and some make monitoring energy usage easier and faster.

You can use the data to:

• quickly identify unexpected or excessive energy use
• highlight opportunities for reducing costs

When you read an energy meter, you should bear in mind that electricity is measured by the number of kilowatt hours (kWh) passing through the meter, while gas is measured by the volume delivered to your site.

Types of energy meter

There's a wider range of energy meters and data collection techniques for electricity than for other utilities. Electricity consumers have more opportunities to get accurate billing and easy access to their consumption data to identify waste.

As well as on-site meters, other metering options you could consider include:

• smart meters
• sub-meters
• automated meter reading
• building energy management systems suitable for large energy users

For you to make the best use of your energy data, it is a good idea to find out what your current systems are and work out whether they provide you with enough detail. If you need more detail there are various metering systems you could consider.

Half-hourly meters

If your site has a peak electricity load above 100 kilowatts (and is therefore a 'code 5' site) it will already have half-hourly primary meters installed which record energy consumption every half an hour. They provide you with useful information for energy management and help identify possible energy savings. You may be able to access the data online.

If your site is not classified as code 5 you could consider having it re-classified and having a half-hourly meter installed. This can be an expensive option that would usually only be suitable for large organisations.

Gas daily metered

Large gas users may be metered daily (DM) and you will have a communication-enabled meter. This allows your supplier to track your gas consumption as you use it.

If your site doesn't qualify for DM but your meter was installed in the last 15 years you may be able to arrange for your consumption to be measured on a half-hourly basis and to get the data sent to you daily by SMS text message.

Smart meters

Smart meter systems provide consumption data storage, retrieval and display facilities to help you manage energy use and identify wasted energy quickly.

Smart metering is suitable for smaller sites that have either:

• non half-hourly electricity meters
• manually-read gas meters

Sub-meters

Your primary meters will only tell you the total energy used at your site. Sub-metering will help you see the specific areas that you can save energy in. They measure energy usage either:

• within particular areas of your site
• by individual items of equipment

Automatic meter reading

Automatic meter reading (AMR) is a one-way communication system from your gas or electricity meter to the data collector or supplier. There's no need for manual meter readings and your bills are always based on actual readings rather than estimates. You can ask for regular readings to help you manage your energy consumption.

Building energy management systems

If you spend a significant amount on energy you could consider using a building energy management system (BEMS). This is a computer-based system that controls services such as heating and lighting throughout your building.

A BEMS can be connected to half-hourly meters to monitor usage in different areas and identify abnormalities.

Once you have collected your energy usage data you can analyse the energy spend for the business as a whole by:

• converting all energy sources to the same unit (kilowatt hours)
• using a spreadsheet to analyse the use of each energy source on a month-by-month basis
• calculating energy costs at different intervals to use as a benchmark to measure energy-saving improvements
• identifying and measuring the factors, such as weather conditions, that cause your energy use to vary

From this you can see:

• if you're using too much energy
• how your current energy use compares with past figures
• how your business compares with the industry average if benchmarks are available
• the impact of the factors that affect your consumption

You can also do a more complicated analysis to show the impact of the factors that cause your energy consumption to vary.

A walk around can be helpful when managing energy. You can find out where bad practice, inefficient equipment usage, and any poor energy habits are taking place around the building so you can start to fix them. A walk round can help you spot:

• wasteful energy use
• opportunities for savings
• maintenance issues that need to be dealt with

It's a good idea to involve your staff if possible.

Simple energy checks and actions

You should aim to identify areas of energy waste and inefficient use of energy controls by making sure that:

• you can account for the energy used while the building is empty
• energy saving modes are switched on for equipment that has to be kept on all day for occasional use
• lights are switched off when they're no longer needed during the day and when the building is empty
• ventilation fans are switched off in unoccupied areas
• thermostat, timing and lighting control settings are correctly set

It's a good idea to prepare a checklist for your walk round. You could have separate checklists for maintenance and housekeeping or a combined one.

Energy maintenance checks

Poorly-maintained buildings and equipment waste energy and increase your energy bills. On your walk round you should check whether any repairs or replacements are needed and whether energy-using equipment has been properly maintained. You should check whether work is needed to:

• reduce air leaks
• repair broken windows and damaged walls and roofs
• replace damaged or damp insulation
• stop water dripping
• clean windows and light fittings
• replace dirty filters
• balance the heating system

When to conduct an energy walk round

You can do a walk round whenever you think it's necessary but it's best to do one at least once a year and preferably every three to six months. You'll also need to think about doing them at different times of the day as the energy use will vary. This might be:

• when the cleaners are on duty
• at lunchtime
• at night or weekends when you expect to be using little or no energy
• at busy times when you expect to use a lot of energy

Action after the energy walk round

After each walk round:

• analyse the findings
• report results to staff and management
• produce an action plan and implement it
• schedule your next walk round