£24m scheme to help West Midlands businesses reduce energy usage and bills

Andy Street, Mayor of the West Midlands and WMCA chairman, and Lord Callanan, Minister for Energy Efficiency and Green Finance, launched the Government-funded Business Energy Advice Service pilot scheme at Wednesbury-based automotive components manufacturer Alucast – one of the 500 local businesses that have already signed up to the scheme.

The region’s large advanced manufacturing sector means the West Midlands has a higher proportion of energy exposed businesses than any other part of the UK. As a result, the WMCA is working with local SMEs like Alucast to help identify and fund new ways of working that use less energy and support the region’s transition to net zero.

Businesses can get a free energy audit and then apply for up to £100,000 of match funding towards the cost of all or some of the recommended measures. This could include supporting investment in new machinery and equipment, improved manufacturing processes or LED lighting and insulation.

Alucast employs 126 people at its foundry in Western Way, Wednesbury. With 30 furnaces, the company uses 2.5 million kWh of electricity and 7.5m kWh of gas every year, costing £1 million annually. While energy prices are much lower than at their peak, Alucast are looking for ways to further reduce their costs and emissions with support from the BEAS pilot.

Tony Sartorius, Alucast chairman, said: “The casting industry supports many other sectors in the economy. This is why it is described as a foundation industry and is so important in most modern economies. Its major costs are labour, materials and energy, in that order. These costs are critical, and are often outside the control of many businesses, as inflation and world commodity prices have surged in the last two years.

"Our goal is to reduce energy consumption through micro-management, by installing sub-metering, investing in more efficient furnaces and educating our workforce on our energy savings and net zero goals. We believe BEAS will help us achieve our targets and is a real and proactive mechanism to reduce carbon emissions.”

The Mayor said: “Businesses right across our region, like Alucast, appreciate our #WM2041 net zero commitment, but for many the impact of high energy costs will mean they have struggled to see how they can finance their own investments in improving energy efficiency.

“It’s really good news that the £24m of Government money we’ve secured will help businesses in all sectors and of all sizes to identify how to reduce their energy usage and support investment in long term measures that will also result in lower energy costs in the future.

“Protecting local businesses from volatility in the energy market in the longer term is how we’re going to achieve net zero, drive clean growth and enhance business resilience in the months and years ahead.”

Lord Callanan said: “West Midlands businesses are raring to cut their emissions and lead the region’s charge to net zero, with 500 small companies already signed up to receive a free expert energy assessment.

“Alucast, a local firm competing with the best manufacturers in the world, is now being helped to lower its bills and emissions without compromising on quality.

“From pubs to workshops, I encourage every small business across the West Midlands to take up this free offer of advice and funding to slice their energy bills.”

Helping employers to reduce energy consumption was among the recommendations from the West Midlands Industrial Energy Taskforce, set up by the Mayor as part of a commitment to support the decarbonisation of businesses.

Making businesses more energy efficient is also a key element of the WMCA’s work to help the West Midlands achieve its #WM2041 ambition of becoming a net zero region within the next two decades.

The West Midlands has been earmarked to pilot BEAS as a result of the new Deeper Devolution Deal agreed between the WMCA and the Government last March which included a commitment to give our region more control over net zero funding.

It will build on the practical support and guidance the WMCA is already providing businesses and other institutions to help them begin or continue their journey to net zero while increasing business productivity and resilience.

The WMCA has also secured £70m of funding from Government and social housing providers to improve the energy efficiency of thousands of homes. The Government recently confirmed that it will have committed to spending £12.6 billion on improving home and business energy efficiency across the UK by 2028.

Councillor John Cotton, the WMCA’s portfolio lead for environment and energy, and leader of Birmingham City Council, said: “The environmental and economic case for increasing energy productivity is clear but volatility in the energy market has proven to be a big barrier to the investment that we know is needed in this area.

“Providing businesses with the support they need to reduce or remove those barriers to changing day-to-day practices and processes will support the transition to net zero and help improve the clean growth that we in the West Midlands are committed to delivering.”

BEAS is being delivered by the WMCA and DESNZ through Business Growth West Midlands in partnership with The High Value Manufacting Catapult, Aston University, Warwick Manufacturing Group, Warwickshire County Council, Staffordshire County Council and Worcestershire County Council.

Businesses can register their interest at www.businessgrowthwestmidlands.org.uk/business-support/business-energy-advice-service-beas/