Castle Dairies

Industry: Food manufacturing

Service: Energy efficiency, energy purchasing and invoice validation, Climate Change Agreement compliance

Result: Over £42,000 energy costs savings and CCA refund

About Castle Dairies

Castle Dairies is based in Caerphilly, South Wales, in a green valley and surrounded by hills. The dairy produces award-winning organic and conventional butters for the UK wholesale and retail markets.

The company, established in 1968, is now the only dairy in Wales that has the capability to both churn and pack butter. In its continued drive for excellence, Castle Dairies operates a rigorous quality assurance programme. There is an on-site laboratory and technical manager, and the company is accredited to the BRC standard.

The project brief

Castle Dairies spends a significant sum each year on energy and is also subject to the Climate Change Agreement scheme, so needed to achieve energy reduction targets in order to achieve the maximum 65% tax rebate.

Innovative Energy Consultancy (IEC) was originally appointed by the Carbon Trust to support Castle Dairies to reduce energy consumption. Now Castle Dairies works directly with IEC, which manages energy purchasing and invoice validation, supply issues and compliance with the CCA. Castle Dairies wanted to outsource energy management in order to maintain internal focus on producing a quality product and looking after its customers.

The solution

IEC’s first task was to review energy requirements and help its client obtain the right supply at the best price. In addition, IEC undertook a thorough review of historical invoices and rectified billing issues. It was identified early that the CCA had not been correctly applied and a significant refund of £14,500 was secured. Additional cost savings were achieved by reducing the site’s ‘available capacity’ to a level which maintained existing performance while reducing electricity costs. This provided an ongoing annual saving of £3,900. It was also identified that Castle Dairies was being wrongly charged for its gas supply because of a complicated set-up with main and sub-metering. Resolution of this issue took a number of months and much negotiation, but the effort has produced worthwhile savings.

Key programmes include:

• Energy efficiency measures, including improvements to the refrigeration plant and compressed air supply
• New supply contracts with more favourable terms and conditions
• Historical analysis of invoices to identify incorrect charges and systematic monthly invoice validation to ensure ongoing charges are correct
• Proactive management of supply to resolve issues
• Submission of data under the CCA to obtain a rebate on the tax element of energy bills in return for achieving energy reduction targets.

“We’ve worked with IEC for seven years now – they understand our business and we trust them to represent our best interests. They have helped us to save money by making us much more efficient, by ensuring we get the highest possible tax rebate under the CCA scheme, and to get our energy supply at the right price. They have also helped us save money indirectly because our internal teams haven’t had to spend time and effort on managing our energy supply.”

Nigel Lloyd, Managing Director, Castle Dairies