Accessible variable speed drive funding may save industry billions 03 July 2013

Industry globally could save billions of pounds on electricity and reduce CO2 emissions accordingly, by implementing VSDs (variable speed drives) on production plant motors.

On its own, that's not news to plant engineers, but two new reports – one from Siemens Financial Services (SFS), the other from the Energy Efficiency Financing (EEF) scheme – give compelling views of the scale and suggest innovative ways to make it happen.

SFS calculates that in the UK alone savings could be up to £2.5 billion over the next five years, through the adoption of VSDs, while EEF puts it another way – suggesting that British industry is overspending on energy to the tune of more than £2.2 billion per year.

The SFS study follows a 2012 report, also from SFS, which quantified the capital 'trapped' in purchased equipment that could be released through 'asset finance' – matching monthly lease payments to savings in energy bills, effectively making investment in VSDs zero net cost or even cash positive.

Meanwhile, EEF's analysis is based on official sources and proprietary EEF data, and makes the case for finding ways to raise finance for energy-efficiency investments – in its case through the EEF scheme.

That is a joint financing initiative between the Carbon Trust and Siemens, matching monthly payments to actual monthly energy cost savings, again meaning that firms effectively end up paying no extra for their new equipment investment.

"In light of the steady upward trajectory of electricity prices, greater energy efficiency is becoming an urgent concern for industrial organisations," comments Darren Riva, head of energy efficiency financing for Siemens Financial Services in the UK. .

"The magnitude of the potential savings enabled by VSDs presents an extremely compelling business case for industrial companies to invest in this power-saving technology," he continues.

"By making greater use of asset financing to acquire the most up-to-date technology and equipment, industrial management can benefit from higher financial efficiency and lower energy consumption."

To help companies raise finance for energy-efficient investments, the EEF scheme covers technologies ranging from low-energy lighting to energy-efficient motors, low carbon air conditioning and biomass heating.

Any business with at least three years trading history is able to apply for new green growth finance from the scheme. The Carbon Trust applies its knowledge in carbon saving to provide a reliable assessment of the carbon, energy and cost savings of any application for finance.

Brian Tinham

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