The chilling cost of heating bills

Rebecca Cooney finds out how smaller charities can drive down their energy costs

Origin sports in Newcastle has had to cope with surging energy bills
Origin sports in Newcastle has had to cope with surging energy bills

When Lesley Harrison, the manager of the Newcastle-based community youth sports club Origin Sports, checked the club's energy bills in early 2016, she was horrified to find that, despite paying a monthly direct debit, it was several hundred pounds in debt. The club had moved into its new headquarters in a converted railway arch in the centre of Newcastle in December 2015. The building was "quaint, centrally located and affordable", Harrison says and, given the club's problems with previous venues, seemed like a godsend.

But the bricked-up sides of the space let drafts in, the sandstone walls were damp and the five-metre-high ceilings meant heaters had to be turned on several hours before classes started, which sent the club's bills soaring.

To make matters worse, the club's energy provider, Scottish Power, wanted to increase its direct debit, assuming it would be using the same amount of power in the summer as it had over the winter.

According to Giles Hankinson, chief executive of Utility Aid, an energy broker that works with not-for-profit organisations, Origin Sports' situation is not unusual. "There are a lot of small charities paying more than they need to," he says.

Increase efficiency

A large charity might be able to plough £50,000 into an energy strategy that knocks 25 per cent off future bills, he says, but for a smaller charity the up-front costs could exceed the savings and any return on investment might take many years to arrive.

On discovering the massive bill and the request to increase the direct debit, Harrison contacted Scottish Power.

"The company was quite sympathetic when we explained we were using that much energy because it was the winter," she says. "It also asked us about the nature of our building and how we use energy."

The club had eight convection heaters at a few kilowatts each and most of the warmed air was rising to the top of the space. At the suggestion of Scottish Power, it invested in infrared heating that warmed the activity mats and floor level first and required only three 2KW units for the room.

It was a costly move but has led to a significant fall in energy bills, Harrison says.

Many charities and community groups find themselves in less than state-of-the-art buildings, either because that is what they can afford, or because the premises themselves are part of their raison d'etre: rescuing an old community building, for example.

Olivia McGregor, an energy consultant at the carbon-reduction charity the Carbon Trust, agrees that for many charities prioritising energy efficiency can be a struggle, but she says some of the biggest opportunities to save energy can be inexpensive.

Heaters, as Origin Sports found, are a key issue, and organisations should try to use them only when the space is actually needed and make sure the thermostat isn't turned up higher than it needs to be, McGregor says.

And in older buildings, she adds, users have greater influence over energy consumption than in modern buildings, where heating and lighting might be determined by timers and sensors. It's important to educate and engage staff to make sure they're aware of the need to turn lights off and so on, she says.

Lighting is one area where a relatively simple change can be made, she says. "Probably the most typical lighting I see when doing an energy audit is fluorescent, but many organisations have made the switch to LED lighting. The price is coming down and it offers a very quick payback: it is cheaper to run because it requires less power to put out the same amount of light."

But she warns that it's important not to over-light the space because any savings will be wiped out by using more LED bulbs than are really needed.

Another cost-effective change organisations can make is to insulate the roof, says McGregor. "At £5 to £10 per square metre, it's cheaper than wall insulation and can often be fitted by the community groups themselves."

On insulation, Origin Sports had a stroke of luck, Harrison reveals. "One of the volunteers works for an insulation company and asked their boss to donate a large amount of the wool insulation and foam insulation boards," she says. "We covered the whole thing, which made a huge difference."

But the club was unable to get the same level of support when it tried to get a grant to replace the archway's huge single-pane windows, which haemorrhage heat.

"Replacing the windows would have cost £20,000 and it was a nightmare finding anyone who would help us with that," Harrison says. "The attitude was 'you're on a short lease with a three-month get-out clause: we're not going to invest in the building when you could move out at any time'. We tried social finance and had a similar issue."

One of the best ways to ensure you're not paying more than you should is to shop around for energy suppliers. Harrison looked at a number of companies and is confident the club has a good deal with Scottish Power.

But Utility Aid's Hankinson says not all charities fare so well. "If you're a treasurer for a small organisation, with the best will in the world you might not have time to call 30 or more energy companies," he says. "And when you do, you may well be led a merry dance or not given the information you need to make a good judgement."

Benefits of brokers

Getting energy through a broker can help, Hankinson says, as well as giving small organisations the opportunity to join together with others to bid for an energy contract en masse, making companies compete for their custom, he says.

The biggest issue for charities, he says, is that they tend to slip through the net when it comes to energy regulation.

"Some suppliers are more helpful than others, but unfortunately some take the opportunity to do things they shouldn't: for example, frustrating the switching process," he says.

"The position of Ofgen, the regulator, is that unlike domestic, where people aren't supposed to understand everything, if you're a commercial entity you should be able to deal with this. That's fine for businesses, but charities don't have cut-throat people running them and they don't necessarily know how to negotiate this, so some energy companies take advantage."

Utility Aid spends a lot of time trying to help clients who are in contracts they should never have agreed to, and "once or twice a month" the company is forced to threaten referral to Ofgen.

That can prove a useful tool for small organisations, he says. "Although Ofgen won't help charities, not easily anyway, just the threat often has amazing results."

Harrison says the simplest advice she can offer to avoid spiralling bills is to have regular meter readings so you've always got a clear picture of what you're spending. She says small organisations need to be proactive.

"Don't be scared to talk to your energy company: it's not out to get you. We could have panicked, but we spoke to the company and it helped us to work it out. But you do have to pick up the phone."

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