Whittingham: BGB typically helps firms cut energy use by 10%

The imminent arrival of the CRC has bolstered the case for energy services companies, British Gas Business director Jeff Whittingham tells Roger Milne.

British Gas Business (BGB) is the division of Centrica that deals with the retailer's non-domestic customers. Jeff Whittingham, its no-nonsense business development director, likes to talk about "the journey". In his case, BGB has already begun the move away from being a commodity provider (selling units of gas and electricity) to becoming what looks much more like an energy services company (Esco).

In that sense, helping companies improve their energy efficiency and reduce their carbon footprints (which is what the CRC Energy Efficiency Scheme is trying to do) has become increasingly a bread and butter part of the business rather than an add-on.
This change in approach has not happened overnight. And because BGB took its first steps down the Esco road a few years ago, when the government floated its CRC proposals there were obvious synergies with what it was already doing, or planning to do.

Energy360

Last year, BGB launched its all-singing, all-dancing Energy360 service. In essence, this comprises a suite of products and services that BGB says can typically help businesses reduce their energy consumption by 10 per cent. A customer can get advice on measures that fit in with its current energy management strategy. BGB also helps firms develop a new strategy and monitors and optimises their energy use.

What this means in practice depends on what a customer wants as a business. It might boil down to metering and monitoring. It might involve a carbon health check. Possibly it could include help with keeping control of buildings - for example, dealing with building management systems if that is the responsibility of the customer. Or it could involve an energy locum, an energy management subscription service offering all the benefits of an energy manager without the cost commitment. For a single fee, a company receives expert support as and when needed from a dedicated energy manager.

CRC managers

Against that backdrop, it is no surprise that BGB is offering a "CRC manager" as part of the mix, to assess whether a customer is caught by the new regime and, if so, how it can comply with it. The CRC is a mandatory carbon trading scheme, which is a territory entirely foreign to many of the businesses and organisations that now find themselves involved.

Whittingham takes up the story. "We saw the CRC was on the agenda. We viewed it as an opportunity, we realised it would stimulate interest." As he explains it, a number of factors were converging. "The government had emissions reduction targets which underpinned the CRC scheme. Companies were also becoming much more focused on energy prices."

This focus on price is not surprising given the soaring cost of energy, but it was not just a matter of getting costs down. "There was a reputational aspect too. Companies wanted to be seen to be green," says Whittingham. "And the CRC meant you really didn't have a choice. In fact, the CRC fed nicely into raising corporate awareness of climate change." Whittingham makes the point that companies do not all behave the same. "Some are passive and just give us the data. Others are more interested in starting a journey to see if they can be more creative," he says. Over the past couple of years BGB has been tooling itself up to offer the range of services that now comes with this territory.

Smart meters

Whittingham's background is in energy services, so he appreciated early on that what was required revolved around data and around controls. Smart meters have been crucial. He says BGB has installed 60,000 over the past three years and this year is committed to installing a further 110,000.

"Smart meters let you the supplier and the company get to grips with behaviour. Why does this building have such an energy demand at a weekend? Is it just lights being left on or what?" This in turn prompts investigations about staff behaviour and how the buildings themselves are behaving.

Building control acquisitions

Logically, this took BGB in a particular direction, into building controls. So BGB bought a number of building control businesses. "These companies provide a mix of services: one does maintenance control, looks after customers' sites remotely, switches lights on and off and controls temperatures. One of the others specialises in providing building control and energy services, mainly for the public sector."

Today, BGB is equipped to offer energy management and consulting services as well as having the capability to design, install, maintain and repair building control systems and provide metering with building controls to optimise energy usage and renewable generation. According to Whittingham, this means BGB has the capability to be a sort of "virtual business manager". He says: "It's our unique selling point. It also means we can be the aggregator or self-deliver down the value chain."

Nervousness

He is the first to admit that managing companies' carbon portfolios is not straightforward. "The mix of gas, electricity and oil can be very complex," he says. He warms to his theme. "A tonne of carbon, what does that mean? It's a lot for companies to get their heads round. And what the consequences would be if they don't manage to deliver. There's a certain nervousness out there."

He points out that the regulations surrounding the CRC scheme are complicated. "The principles look straightforward enough: reduce emissions and achieve compliance. But how do you administer it?"

I question him about his rivals, the other suppliers (see box). How are they shaping up? "Most suppliers are aware of this, but I think we have taken a bolder move than the others into energy services. Now carbon is so important, energy management has become important too."

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