Rising energy costs and growing eco-consciousness amongst consumers are forcing hoteliers across the country to explore new ways of making their businesses leaner and, ultimately, greener.
Combined, these trends have created a perfect storm, bringing with it a tide of opportunity to prepare for the future and build a more profitable and competitive business in the long run.
Never a better time to invest in renewable energy
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
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.
Why is biomass appropriate?
Biomass makes sense for establishments in areas with local access to the woodfuel supply chain. This is expanding rapidly as many farms and estates diversify their businesses by producing woodfuel from forestry assets. It is also an excellent alternative for those without access to the gas mains, as electric and oil heating can be far more expensive.
For city centre hotels delivery of fuel may prove challenging where space is limited, however methods of delivering fuel are constantly improving, and even with access to the gas mains, RHI can still provide a worthwhile return for city establishments making the switch to biomass.
Renewable Heat Incentive scheme payments
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.
60% of energy cost spent on heating in hospitality
In the hospitality sector, heating accounts for around 60 per cent of total energy costs. According to the Carbon Trust, the UK hospitality 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.
Hospitality businesses are turning to biomass
HWEnergy – one of the UK’s most experienced biomass heat specialists – has noticed a clear upward trend in the number of hospitality businesses turning to biomass, and is currently installing biomass systems at six hotels and guest properties across the country, having already completed 13 contracts at a wide range of holiday destinations in recent years. More projects are due to start on site in the coming months.
Its live projects include biomass boiler installations at Auchrannie Spa on Arran, the five star Boath House Hotel in Nairnshire, Corrow Farm in Argyll and Roshven House at Loch Ailort. Combined, HWEnergy expects these establishments to reduce their CO2 emissions by nearly 1000 tonnes per year, whilst generating a RHI income of over £100,000.
A double win: saving on energy costs, winning Green Tourism accreditation
The company has linked the trend with a growth in the number of businesses capitalizing on the RHI scheme in light of increasing energy costs and the rise of eco-tourism.
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 help tourism businesses achieve accreditation by reducing energy waste and creating links with the local community and supply chain.
Aging and inefficient heating systems are very expensive
Bruno Berardelli, Managing Director at HWEnergy, said: “Many of Scotland’s most popular hotels, guest houses and resorts are period and listed buildings which can have aging and inefficient heating systems that are very expensive to run. Travellers are also becoming much more discerning about where they spend their money, and as a result, are more interested in businesses that look after their environment and local community.
“At HWEnergy we have noticed a dramatic increase in business coming from the hospitality sector. 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. RHI is an excellent way to subsidise heating bills and achieve return on investment.
Funding new systems
“Providers like HWEnergy can also 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.”
Profitability
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.
Government funding
In recent months, the UK Government has hinted at changes to the green levies demanded from energy companies, which could signify a change in the coming years to the level of funding available to businesses seeking to invest in renewable energy technology.
However, 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.
Case Study: SMALL
Coul House Hotel, Strathpeffer (21 rooms) www.coulhousehotel.com
Coul House is a family owned country house hotel in the Scottish Highlands. In 2012, its owners approached HWEnergy to provide an alternative to their oil boilers which were more than 30 years old and costing more each year in maintenance.
HWEnergy helped the Macphersons find funding for the project and successfully completed the RHI application on their behalf.
Speaking about how switching has helped his business, Stuart MacPherson, owner of Coul House Hotel, commented: “Once we acknowledged that the 35 year old oil boilers had run their course, it was a question of what next? HWEnergy made the transition to wood pellets as smooth as they possibly could. With a new heat cabin complete with pellet storage, a modern back-up oil boiler and a very efficient biomass boiler, I truly believe that we made the best possible decision for the business.
“In the first fourteen months we have spent £23,000 less on oil. The house has never been so warm and it is costing me less – what could be better than that?”
Case Study: LARGE
Glenmore Lodge, Aviemore www.glenmorelodge.org.uk
Similarly, Glenmore Lodge has achieved significant savings. Having already installed solar panels and Big Hanna, a composting facility for non-meat food waste in 2011, the biomass boiler was the business’s latest investment in reducing its carbon emissions.
During the first half of 2013, the biomass installation generated savings of over £5000 in heating costs and reduced the Lodge’s electricity consumption by almost 40%. Because of this early success, the organisation is now on track to save up to 100 tonnes of carbon each year, with an estimated RHI (Renewable Heat Incentive) income of £22k per annum.
Bob Kinnaird, Head of Glenmore, said: “Being based at the heart of the Cairngorms National Park we are reminded daily of the beauty of our surroundings and the need to preserve them for future generations. From the very first course 65 years ago, environmental knowledge and awareness have been part of our syllabus. In more recent times this has evolved to not only just teaching environmental sustainability but demonstrating it throughout every area of our business.
“We are now at the forefront of promoting sustainability within the sector and the redevelopment of our east wing into guest accommodation presented the ideal opportunity to further our renewable credentials by switching to biomass heat. The south wing accommodation has also been connected to the boiler and there is definite scope to do the same for any future redevelopments.”
Case Study: LUXURY
Holbeck Ghyll Country House Hotel, the Lake District www.holbeckghyll.com
There are signs that the trend is moving south. Holbeck Ghyll Country House Hotel (pictured above and top of article) in the Lake District is one of the latest resorts to invest in biomass. HWEnergy is currently completing a 200kW project at the hotel.
Owner, Stephen Leahy, said: “This biomass project is part of a much larger investment in the hotel estate. Holbeck Ghyll is an AA Four Red Star luxury Hotel with Michelin Star Restaurant, It is very important to us that we maintain our energy systems to the highest standard to ensure our customers have a comfortable stay. We have opted for an onsite district heating scheme that will connect ten separate hotel buildings in total as well as a new on site laundry and spa complex which make even more sense for the commerciality of moving to Biomass heating.
“Once the installation is up and running, the hotel will reduce its carbon emissions by around 150 tonnes each year, whilst earning over £25,000 per annum through RHI. It will also save us about £30,000 a year in existing maintenance and other associated overheads. This is going to enhance the business significantly.”
Typical Project Figures
| Small Project – typical example | Larger project – typical example | |
| Capital investment | £79,500 | £174,500 |
| Annual financial saving | £12,000 | £31,900 |
| Annual CO2 saving (tonnes) | 34 | 136 |
| Years to payback | 6.6 | 5.5 |
| IRR | 17% | 20.1% |
HWEnergy
HWEnergy has a team of 50 people and has been specialising in biomass heating for over 10 years. Projects range from the design, installation and commissioning of small district heating schemes to large hospitals with over 250 successful projects completed to date.
A wholly owned Scottish company, HWEnergy provides services throughout Scotland and the rest of the UK. The company has its headquarters in Fort William and a second office in the north of England. Installation teams, service engineers and fuel supply are based locally.
The company has won numerous specialist awards and is accredited by all major bodies. They were the first to received RHI accreditation in Scotland and are the only company to have introduced a Wood Fuel Price Index to guarantee transparent pricing. They are ranked number one in the tender exercise to identify framework companies for the Scottish Government Biomass Energy Supply Agreement framework for the public and third sector and number one in the tender exercise for the NHS Scotland Carbon and Energy Reduction Framework. They are an active voice in the renewable energy sector.
Contact: Stuart Reid, Head of Marketing & Business Development
| t: | 01397 706 412 |
| dd: | 01397 709 280 |
| m: | 07833 231 085 |
| f: | 01397 708 412 |
| e: | stuart.reid@hwenergy.co.uk |
| w: | http://www.hwenergy.co.uk |