Turning up the heat on energy savings

Heating equipment manufacturers should give the government's ECA Scheme their full backing, supporting manufacturing companies in their efforts to increase energy efficiency and drive down costs, says Frank Staniland, sales director of the Ambi-Rad Group.

Manufacturing companies are at the thin end of a very large wedge. Pressures from all sides – spiralling costs, unfavourable exchange rates, increased foreign competition, declining markets – are making life difficult enough. And now the Government is demanding wholesale increases in energy efficiency, while using the punitive Climate Change Levy to encourage reductions in fuel consumption.

There is some comfort, then, in the Enhanced Capital Allowances scheme. With ECAs, companies purchasing energy efficient equipment – whether for heating, lighting or process – from the Energy Technology List (www.eca.gov can claim the full capital allowance against tax in the first year. This may also include the cost of installation.

Industrial companies would normally expect to claim tax allowances on the purchase of capital equipment over a number of years. If the purchase made is for modern energy efficient space heating equipment such as that manufactured by the Ambi-Rad Group or its competitors – they can now expect greater tax benefits.

Space heating – by radiant or warm air heaters burning fuel at the point of use – is the proven method of heating large industrial buildings efficiently. The technology behind space heating products is now at a point in its development where the fuel efficiency of certain gas-fired heaters is at or approaching 100 per cent. That equates to significant on-going reductions in fuel costs and lower emissions to atmosphere. In fact, there is evidence that switching to high efficiency heating systems can cut levels of carbon emissions by around 20 per cent, in line with the Government’s Kyoto commitment.

Energy efficient heating products qualify for the ECAs approved list if they can demonstrate thermal efficiencies of 89 per cent for warm air heaters, 82 per cent for individually-flued radiant heaters, and 90 per cent for multi-burner or continuous radiant tube systems. Individual radiant tube heaters must also have a radiant efficiency of at least 52.5 per cent. All these figures are at the top end of technology currently available.

For direct gas-fired heaters, the qualifying criteria are, firstly, CE certification and, secondly, that they must achieve a 50 per cent reduction in fresh air intake, and an overall fresh air to recirculated air ratio of 2:1.

At first glance, claiming ECAs through the normal tax allowance system may seem unnecessarily complicated and will undoubtedly deter some potential claimants. But with 100 per cent allowance in the first year against the company’s Corporation Tax liability, it is worth looking into.

ECAs are not the only route to financial savings; the ongoing reductions in fuel consumption of energy efficient heating systems will also reap benefits. It has been shown that Ambi-Rad radiant tube heating, when installed to replace an ageing boiler and steam-fed radiator system in large industrial applications, can save up to 70 per cent of fuel costs. In a typical installation, on-going savings in operational costs are between 25 and 60 per cent. Payback can be achieved in around two to three years – or more quickly if ECA rebates are claimed.

Matrix International, a Brechin-based engineering company specialising in brake units for servo motors, robotic units for car assembly plants and industrial doors, invested in an Ambi-Rad radiant tube heating system when its boiler came to the end of its useful life. There were two key requirements of a replacement system – that it should meet the diverse heating needs of the various areas of the factory, and reduce the heavy financial burden of the Climate Change Levy.

A radiant system consisting of 50 AR radiant tube heaters was installed in the main factory areas. Warm air units were used to heat the low-ceilinged research and development area and the oil and paint store.

Matrix has noticed a substantial reduction in gas costs since the installation, with no loss of comfort temperatures, even when roller shutter doors are in use. They are anticipating a 30-month payback on the investment.

Warm air heaters also offer the benefits of high performance, and the return on investment from energy savings can be so great as to pay for the installation within a very short time. Unipart DCM found this to be the case when it installed 105 Reznor gas-fired warm air heaters at its Cowley distribution centre. With annual energy savings of around 35 per cent, the heaters paid for themselves in just nine months, well ahead of the two-year limit set by Unipart.

ECAs offer industrial companies a real financial incentive to invest in energy efficient technology, over and above what they may achieve in the long-term savings on running costs. But when you are contending with more immediate external pressures, energy efficiency and energy management may come low down the agenda.

This is where the Ambi-Rad Group can help – with advice on the right heating system for your premises, help in managing heating energy requirements and a roadmap for ongoing reductions in heating costs.

The addition of space heating equipment to the ECAs approved list was a major step forward in enabling companies make the transition to energy efficient heating systems. ECAs are an ideal way for end-users to purchase higher performance systems on favourable financial terms – and to reap the long-term benefits of reduced fuel consumption while reducing their company’s impact on the environment. A real win-win situation.

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