Energy optimisation through smart finance could save manufacturing sector billions

Part of an insight series, “Financing Decarbonization: Manufacturing” looks at the many pressures – shareholder, environmental, and regulatory - facing manufacturers to cut their carbon emissions, improve energy efficiency and reduce operating costs. While the current economic climate has caused greater caution over capital spending, the research explores how investment in outcomes via smart finance solutions can render the investment sustainable and affordable.

In collaboration with specialist vendors and financiers who are focused on delivering outcomes, the research finds manufacturers are approaching energy optimisation via two key strategies:

• A holistic optimisation strategy that helps to future-proof energy supply, drive down consumption costs, reduce exposure to unpredictable cost hikes, drive carbon reduction achievement, create new revenue streams and deliver financial benefits in the short-term.
• Incremental investment stages where typical steps include: combined heat and power; lower energy consumption variable speed drives; production line energy recovery; membrane filtration, anaerobic waste treatment; transmission-efficient switchgear; digital twin virtualisation; and energy-efficient building technologies.

For large-scale projects, arrangements known as Energy-Optimisation-as-a-Service -  typically supplied by specialist private financiers - can deliver budget neutral financing. At the smaller-scale, smart financing arrangements (usually based on asset financing structures) help organisations acquire energy-efficient solutions without having to deploy retained capital or over-burden their banking facilities. They can often make it possible to acquire higher specification solutions that deliver greater energy optimisation benefits more quickly – a greater contribution to overall competitive advantage.

Mark McLoughlin, Siemens Industries and Markets, Siemens Financial Services, UK: “Smart financing solutions and new business models can enable manufacturers to secure cost and energy savings without putting capital at risk. Manufacturers only need to ask themselves which energy solution aligns best with their goals.”

www.siemens.com/finance