The Holy Trinity of Money-Saving: Water, Gas and Electricity Monitoring in Hospitality
Energy prices have doubled in the last year whilst water, gas and electricity waste are a key environmental concern. What’s more, consumption of each utility significantly affects that of the others. Here’s how you can cut costs and make your hospitality business more sustainable.
GridDuck has published several blog posts about the value of energy monitoring and rising energy prices. In these articles, we’ve explored the reasons for, and implications of growing energy prices.
However, one topic we have seldom discussed is the specific merits of all-in-one utility monitoring. As such, this piece will do just that, unpacking why water, gas and electricity monitoring is the holy-trinity of money saving within the hospitality sector.
We would like to note that whilst we have chosen to discuss the benefits relevant to bars, hotels, restaurants and the like, other industries can also benefit enormously from all-in-one monitoring, although those are topics worthy of their own articles.
Why should you really care about monitoring your electricity, gas and water? Which utility is the most valuable, and why would your hospitality business gain from monitoring all three utilities?
Gas
In recent years, gas has been dominating headlines due to its gradual price increase, (the average household bill for gas was 221% higher in 2019 than in 1999) as well as its particular spike throughout the past two years. As stated in our feature entitled The End of Bulb and the Rise of Energy Management, the energy market has seen a 250% increase in wholesale gas prices just in the first half of 2021.
This most recent increase was partially attributable to “delays to the approval of the Nord Stream 2 gas pipeline in Germany”. Other causes include low gas levels in storage facilities, transport disruptions, political conflicts and bad weather.
Since early 2021, gas prices have been the topic of yet more concern, with a new price cap review on 3rd February 2022 advising energy prices will rise by a shocking 54% for UK households and increases expected for commercial buildings too. With that in mind, if your business is not already struggling with the cost of gas, then it may well be soon.
Rising gas prices are of particular concern for hospitality businesses because gas cookers are the default choice in most commercial kitchens. As such, cooking makes up an enormous 67% of gas consumption in restaurants, followed by 18% attributable to the water heating required for pot washing and 15% used for the more standard business cost of heating.
Higher gas prices mean that any business with cooking-intensive energy consumption relies heavily upon the efficiency of their equipment and staff to keep costs under control. Industry opinion demonstrates this as a concern. According to a survey conducted on 112 founders and managing directors of hospitality businesses, 78% cited workplace energy waste as their top irritation. In this particular sector then, it seems fair to say that understanding gas usage better could prove especially valuable.
What’s more, many businesses access gas on variable, pass-through or time-of-use tariffs. Whilst variable and pass-through tariff prices shift in accordance with the market, time-of-use allows businesses to take advantage of lower prices throughout the day. In both instances, accurate, round-the-clock monitoring can play an essential role in helping your business to understand if your gas consumption fits the cheapest routine.
Alongside this, smaller businesses have additional incentives to monitor their gas usage, with prices varying from 4.3p to 5.1p per kWh between small and large businesses. If your hospitality business consumes gas at this higher rate, remember that you stand to profit the most from gas monitoring per unit.
Electricity
Electricity efficiency can be measured across a far greater range of appliances than gas efficiency, from light bulbs to fridges to electric heating systems. For that reason, in-depth electricity monitoring - at appliance or circuit level - can help your business to holistically assess your equipment’s efficiency. You can decipher which processes use the most energy, and change your operations to minimise costs.
Growing reliance upon automated and electronic equipment within the hospitality sector means that energy demand is going up. One study found that demand has increased “25-30 percent over the last decade and is forecasted to continue growing due to more demanding standards and the development of catering equipment.” That’s right, whilst your cooker is probably consuming the same amount of gas as it did ten years ago, your operations are most likely using more electricity.
The impact of rising gas and electricity prices -alongside increased demand- has had a notable impact on hospitality businesses, “with 67 percent of business owners claiming they will no longer meet their growth targets due to the punitive energy costs.”
Furthermore, energy waste is a big obstacle to sustainability in the hospitality sector. In fact, energy makes up “60 percent of the industry’s CO2 emissions.” With greater demand for sustainability in restaurants, hotels and bars and the growing trend of ecotourism, energy monitoring bears several marketing advantages alongside the obvious cost benefits.
Water
Water waste in the hospitality industry receives comparatively little attention compared to packaging or food waste, yet water consumption is inextricable from energy consumption. Much of the water required for cooking and cleaning must first be heated using energy meaning that, as previously stated, water heating accounts for 18% of gas use in restaurants.
For hospitality businesses looking for ways to become more sustainable, it is important to remember that water scarcity is a “recognised, global issue” of environmental concern. As one article describes, “the hospitality sector is under increasing pressure to reduce water consumption. The imperative is about sustainability and cost … taking steps to save water [contributes to] the preservation of a precious resource, as well as saving money.”
In order to save water, it helps to set targets for water consumption, for which data is essential. In a Smarter Business piece on how hospitality businesses can save water, identifying “current water consumption and costs, going back at least three months” is noted as the starting point for water-saving. With that in mind, water monitoring can be seen as the first step towards running a more water-efficient business.
All-in-One Monitoring
So the benefits of monitoring water, gas and electricity are clear.. But why is it important to have data on all of these utilities together and does it really pay to monitor all of your utilities in one place?
As a business, total financial visibility of quarterly utility bills, investment payback and operational anomalies cannot be undervalued. Gas, water and electricity monitoring gives you all of the information required to make important decisions. Was your new gas cooker more cost efficient than your new energy-efficient fridge over a one year period? Is water waste your primary concern to raise with staff or should you tackle electricity waste first? Which appliances and areas of your building are using too much, and who is responsible for that area? What is your forecast for spending next quarter? Are certain days costing you more in utilities overall than you have earned?
With total utility monitoring, you will gain all of the insight you need to answer these questions. Your findings will allow you to make smart operational and investment decisions, avoiding future waste. During an especially difficult couple of years for the hospitality industry, where many businesses face the real risk of closure each quarter due to COVID-19, round-the-clock spending insight could prevent unforeseen costs and prove a lifeline for many businesses.
What’s more, total monitoring is the best way to identify and prevent maintenance issues. You will be able to see how much of each utility different appliances are using, and flag any strange increases in consumption ahead of breakages. Having all of your data in one place also saves you and your staff time, and removes the disruption of having meters read.
Total Utility Monitoring Potential: Dark Kitchens
Gas, water and electricity monitoring has particular potential in dark kitchens, sites where caterers share facilities to prepare food for takeaway orders. With a rapidly growing food delivery market -aided particularly by COVID-19 restrictions on eating out-, the UK was home to around 750 dark kitchens in March 2021, although the number may now be higher.
Dark kitchens provide several sustainability and cost benefits for businesses. For example, they can share the cost of materials and deliveries.
Utility monitoring and other data is essential for these businesses to set unit rates and divide up costs between businesses, a crucial aspect of the dark kitchen offering. As one article explains “data drives these restaurants, [showing] what is working and what isn’t throughout your dark kitchen. For example, you can predict high and low demand levels, which means you can adapt the amount of staff working at your kitchen.” For dark kitchen owners, total monitoring data is essential to manage profitability. To learn how you can save in your shared commercial kitchen, download our free poster.
Total utility monitoring is equally vital to delivering on dark kitchen sustainability claims. According to the Financial Times, dark kitchens demonstrate how data can be used to make all restaurants more sustainable, with “more efficient and smart kitchens” providing an “edge in eliminating food waste.” Anton Soulier, a British businessman working with dark kitchens, says “the whole industry will follow, with traditional restaurants soon bringing in data analysis software too.” As such, dark kitchens can be seen as trailblazers, maximising the potential of data to deliver more cost-efficient and green operations.
If you’re interested in total utility monitoring, we can help. GridDuck provides water, gas and electricity monitoring for commercial buildings across a range of sectors. To find out more, please arrange a 15 minute chat with Miles here. Read our article, The End of Bulb and the Rise of Energy Management for more information on the energy crisis.