Renewable energy ticks both boxes by offering a means to reduce and even subsidise overheads whilst improving a business’s attractiveness to the green pound. What’s more, with so many funding programmes and incentive schemes currently available, there has never been a better time to invest in renewable energy.
In particular, renewable heat in the form of biomass is currently enjoying a spike in popularity within the hospitality industry. The benefits of biomass are far reaching, from reducing costs and carbon footprint to increasing self-reliance and creating jobs.
Biomass systems burn wood pellets, chips or logs to power central heating and hot water boilers. Although costs can vary, wood fuel is cheaper than other hydrocarbon based fuels and is a lower carbon option. This is because the carbon dioxide emitted when wood is burned is the same amount that was absorbed over the months and years that the plant was growing. The process is sustainable as long as new plants continue to grow in place of those used for fuel.
Businesses that have adopted biomass as a heating solution are eligible for the UK Government’s Renewable Heat Incentive scheme (RHI) which offers financial payment for generators of renewable heat. The first of its kind in the world, it was set up to encourage uptake of renewable heat technologies, and the Government expects to make a significant contribution towards its ambition to generate 12 per cent of the UK’s heat using renewable sources by 2020.
In the hospitality sector, heating accounts for around 60 per cent of total energy costs. According to the Carbon Trust, the UK industry’s estimated annual energy bill is around £1.3 billion, with carbon emissions topping 8 million tonnes each year. By adopting alternatives such as biomass, the industry doesn’t only have money to save; it has money to earn and a huge part to play in reducing the nation’s carbon footprint.
At HWEnergy – we are seeing a clear upward trend in the number of hospitality businesses turning to biomass. We are currently installing biomass systems at six hotels and guest properties across Scotland and the north of England, having already completed 13 contracts at a wide range of holiday destinations in recent years. Each project is very different as the new systems have to cater for facilities of varying sizes and functions, from hotel bedrooms and lodges to spas and swimming pools.
With energy costs continuing to increase, businesses need to find new ways to reduce running costs so the upward trend in biomass isn’t surprising given the means for businesses to capitalize on the RHI scheme to subsidise heating bills and achieve return on investment combined with the increasing popularity in eco-tourism and the added-value of green credentials.
More specifically, the Green Tourism Business Scheme has become a much sought after accreditation amongst hoteliers, holiday destinations and tourism providers. The scheme rewards businesses that demonstrate a commitment to reducing waste and celebrating positive aspects of culture and ecology. It also requires businesses to work constructively with the community and the supply chain through positive social and ethical choices.
Renewable energy sources such as biomass can help tourism businesses achieve accreditation by reducing energy waste and creating links with the local community and supply chain.
Although investment in biomass heating systems can be substantial, payback is generally in around 5 to 7 years in which time many businesses are still financially better off due to the fuel savings they make and the RHI they receive. In cases where capital finance is an issue HWEnergy can help hotel owners and management fund the projects through Energy Service Company (ESCo) and heat supply financial models. This means that businesses of all sizes can benefit from switching to renewable heating systems like biomass.
For many, investment in biomass and other renewable energy sources has had a remarkable effect on the business’s profitability and reputation amongst visitors. By reducing overheads and attracting income through RHI, establishments can take control of their energy bills and use the savings and incentives to reinvest in other aspects of their business.
Some rural hoteliers have even supported the creation of new jobs by being able to open all year round as a result of reduced costs, or by employing someone to produce biomass fuel using the hotel estate’s own wood supply.
The Government is committed to RHI, having set aside £860 million for applicants. It has also promised to deliver payments to those who have already made the change for the next 20 years. This presents an unprecedented opportunity for hotel and hospitality businesses to boost their green credentials, become more competitive and ultimately more profitable. Now is the time to take action.