Yes, yes, okay, the heading for this may have been stolen from a great statesman, but it did strike a chord with me, when I heard it on the news.

My “Energy Elephant” piece was written from a position of bewilderment about the lack of emphasis being placed on the energy crisis.  It prompted many discussions, inside and outside the manufacturing sector, and I have been bombarded with information ever since. So much so, that I thought I should put it together here and throw it out there, to further the debate.

I confess that my flabber was gasted, by some of my conversations.  One of our country’s leading moulders, confessed their energy usage is “criminal”.  They run 20 year old, fixed and variable pump machines ,which are massively inefficient “but if it ain’t broke, we won’t swap it”.  I withhold the names to protect the innocent, but their energy bill has just increased by more than £2,000,000 per year. I feel the need to write (Million) like the football results, when it is so extraordinary.  Who could help them with this?

I called Dr Robin Kent, apologised for my intrusion, and asked if I was going mad.  He’s been in the plastics industry since the 70’s and has been beating the energy drum for decades.  He confirmed my insanity was as genuine as my findings, but warned it was a lot weirder than I knew.

So I wrote to my MP, because I’m sure I’ve heard that’s a thing people do in times of crisis.  My email was sent to the Department for Business Energy & Industrial Strategy (BEIS).  Have no fear, they told me,  we have the Industrial Energy Transformation Fund.  £289 (million) of funding, aimed at, as the name suggests, Transforming Industrial Energy.  Phase one was run as a competition, (I kid you not) and after 2 years, 29 grants were awarded for feasibility studies.  Now I’m a patient man, but at this rate the “transformation” will be glacial, and we all know glaciers are already struggling with global warming.

So who else might help?  The Carbon Trust, thought I.  Alas they “no longer have any Government funding to assist industry”, but they advised me to keep an eye on my local authority as, “pockets of funding pop up every once in a while”.  Hardly grounds for long term planning.

Maybe I shouldn’t worry about oil or gas prices, after all, we are an island and we have wind power.  Well apparently that’s not quite as simple either.  We do have magnificent wind farms, on shore and off shore, we are the envy of the world, allegedly.  But one tiny issue, I learned that we can’t store the power the farms generate.   So if we don’t need energy on a windy day, we turn off the turbines.  Think about that next time you drive past a static wind turbine.  Even cavemen knew to collect dry wood in the summer, to burn in the cold wet winters. How did we fail to close that loop?

Now, this week I was reassured by The Times Business Correspondent,  Dominic O’Connell, that the lights will not go out this winter and we won’t be told to share baths.  Then he explained the solution is that industrial energy users will “be forced” to shut down production, or work reduced  hours.  Oh well, that’s a relief. I’m sure the industrial workers who are struggling to pay their bills, will be delighted at a shorter working week.

My conclusions are, that UK Manufacturing PLC has a tricky winter ahead and massive historic investment lethargy to overcome.  The technologies are out there, the Super Deduction tax gives a 25% discount on new equipment and this is the quickest return on investment our sector has ever seen.  We have one customer who has paid for a new 250 ton machine, in just 12 months, on electricity savings alone.  It’s a scary new world. Turning off the lights all over Europe will not solve this issue, as Dr Kent has documented.   We need to do more, and we need to do it quickly.

Carl Reeve 3.08.22

The energy elephant in the room (A piece written by Carl Reeve MD)

Is it just me or is anyone else concerned about the elephant in the room?

Having spent a hectic week with fellow members of the Plastics community, I feel I’m operating in a parallel universe. During two days at the Haitian open house in Germany, a day at Plastics Live in Coventry and then the BPF Council Meeting with the Bank of England I’m unsure why the there are so many relaxed faces.

The U.K. is in an energy crisis that is about to hit every home and every business. We all know that households have seen prices double and that they will increase again in October, don’t we? I’m sure I saw something about Europe being at war with its biggest energy supplier, or was that just pre Wimbledon? Why then, are so few manufacturers up in arms about their future?

In moments when my faith in humanity is challenged, I obviously reach for the good book. Yours may be different, but mine is by Dr Robin Kent, “Sustainability Management in Plastics Processing”. It reminds me that (chapter 6.1, page 195) “If your energy-saving actions to date have been confined to replacing fluorescent or high bay lighting with LEDs, then you haven’t understood where the costs really are.”

Hallelujah; I thought I’d missed the day in processing school, when they explained the lightbulbs use more power than the 500 ton lump, leaking oil in the mould shop.

According to the PMMDA figures it will take the U.K. 24 years to upgrade its current fleet of 17,000 moulding machines. One of the oldest equipment portfolios of any developed nation. 24 years, to modernise our single most important piece of equipment. If this was true of other equipment in our industry, we would mostly be driving Ford Sierra’s, chatting on a Nokia 3310, while waiting for our IBM computer screens to warm up.

So why don’t we upgrade machines inline with our global competitors? Well the most often used line is “these machines don’t owe us anything, they’re all paid for”.

The truth is we are still working on the theory that moulding technology hadn’t changed greatly in 30 years, so we could pay for the machine over 10 years, keep it for 20 years, and therefore the last 10 years are “free”.

Times have change. 24 years ago, the same year Google was launched, we didn’t have servo hydraulic and electric machines available at affordable prices. We didn’t have capital equipment that could provide a return on investment in under 5 years. But today we do.

When you next walk around a mould shop, remember the words of the good Dr Kent, 66% of the energy is going on Plastics Processing, and just 5% on lighting.

Now back to that elephant.

Energy is typically 7% of a moulder’s turnover. Industrial Electricity costs today stand, on average, at £0.14 kWh. Renewal costs on average stand at £0.42 kWh. A 300% increase.

Have a chat with your Financial Director, accountant, invoice clerk and see what difference that makes to your company’s profitability.

If only there were some way to negate these increases. Well, what do you know? There is technology out there that can cut your energy use by 60-80%.

Now obviously I believe that Haitian machines offer the “best bang for your bucks”, but as we hurtle towards a winter where energy security will define the economic climate, we all need to do our bit. We must reduce our energy consumption or the lights will go out. All the major machinery suppliers, have the technology to transform your energy usage and can demonstrate your return on investment.

We, literally, cannot afford to ignore this.