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News Release from: ebm-papst Automotive and Drives (UK)
Edited by the Manufacturingtalk Editorial
Team on 22 December 2006
Finance model promotes energy savings '
Green' finance model has been donated to the Federation of Environmental Trade Associations (FETA) to help promote awareness of energy efficiency whole-life costs.
A 'Green' finance model, specially developed by ebm-papst UK - one of the leading manufacturers of energy efficient fans and motors - has been donated to the Federation of Environmental Trade Associations (FETA) to help promote awareness of energy efficiency whole-life costs and counter the 'bottom line' mentality employed by much of British business The Energy Reduction Group (ERG) of FETA is planning to encourage a culture change by motivating those at Board level, focussing on financial directors, managing directors and chairmen, because it is at this level that most budgets are agreed
This article was originally published on Manufacturingtalk on 25 Jul 2008 at 8.00am (UK)
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In an article that appeared in Energy in Buildings and Industry magazine in January 2006, Mike Lawrence, chairman of the ERG said that far from taking the long-term view in energy efficient plant and equipment, business has continued to be influenced by a 'bottom line' mentality.
This translates into buying the cheapest product, no matter how much more it will eventually cost through greater power consumption and government imposed energy levies.
Part of the ERG strategy to promote a culture shift is to communicate in the language that senior board members understand and this is where the ebm-papst's 'Green' finance model can play an important role.
The model utilises financial parameters such as Net Present Value (NPV); Internal Rate of Return (IIR); Cost of Capital; Hurdle Rate and Discounted Payback: all terms that are clearly understood and relevant to financial decision makers.
The end result is that it can be used to accurately compare whole-life costs of energy efficient technologies to existing and alternative equipment.
Geoff Lockwood, technical director at ebm-papst UK commented, "We developed what we call our 'Green' model for our own use, following a series of negotiations to install energy efficient technology, which after convincing building services and energy managers of the benefits, failed at board level budget reviews.
By offering this to the industry sectors through FETA, we will collectively show that, on a whole-life basis, we can prove that energy efficient technology has real benefits when compared to a short-term cost scenario." The 'Green' Finance Model will be demonstrated on the ebm-papst stand G120 in Hall 20 at the RAC Show at the NEC from 27 February 2007 - 1 March 2007.
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