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Why Businesses are Switching from LPG & Oil to Gas

3
Nov
2015

switching from oil to gas

Many businesses in rural locations that don’t have access to the mains gas pipeline have been using heavy fuel oil out of necessity – often because it is too costly to connect to the nearest gas line. But with heavy fuel oil costs rising much faster than the cost of gas, the initial outlay of investing in a mains gas pipeline has never had greater potential to flow into improved bottom line business performance.

HFO and gas price graph

If cost alone isn’t enough of a reason for your business to switch to mains gas, take a look at these other benefits:

  • Heavy fuel oil deliveries can be weather dependent; gas is a secure and constant energy supply
  • Natural gas emits 25% less CO2 than heavy fuel oil and virtually no sulphur dioxide – helping your business adopt a more environmentally friendly image
  • Gas is more efficient than heavy fuel oil – there is no need for heavy fuel storage tank heating and it has a higher combustion rate
  • There are fewer health and safety risks associated with natural gas. Buried polyethylene gas pipes with a lifespan of more than 50 years are better protected from corrosion and human error in comparison to large above-ground heavy fuel oil tanks

WHY SWITCH TO GAS?

Quickly reduce costs

Gas offers significant financial savings to businesses currently using heavy oil to feed boilers, furnaces, kilns and generators. With heavy fuel oil price trends as they are, it is possible for the cost of connecting to the gas network to be recouped in a matter of months even where a new pipeline of several miles is required.

Gas also offers greater price stability. Gas prices have historically been less volatile than heavy fuel oil prices.

Pay as you go

Unlike heavy fuel oil, businesses do not pay for gas before they use it, providing them with greater flexibility in terms of cash flow.

Storm-proof businesses

With gas, energy is always on tap. Organisations will no longer be at the mercy of tanker deliveries during spells of bad weather and can avoid the kind of energy supply disruption that can so easily have a negative impact on the commercial performance of a business.

Gain more efficiency

Gas burns more efficiently than heavy fuel oil and has a greater calorific value (the quantity of heat produced by its combustion) – offering options to improve the efficiency of manufacturing and heating processes.

Protect the environment

Natural gas is not only more efficient than heavy fuel oil but cleaner. Switching to natural gas fired boilers will typically reduce CO2 emissions by 25%. Unlike gas, heavy fuel oil produces significant sulphur dioxide and other pollutants as by-products of the combustion process contributing to greenhouse gas emissions.

Sulphur dioxide produced by heavy fuel oil combustion can escape into the atmosphere in the form of fine particulate matters.

This poses a threat to human health because it can travel deep into the lung. This particulate matter can also be transported over long distances and can eventually be deposited into water systems, which causes their acidification.

Lower maintenance time and costs

Heavy fuel oil needs to be stored on site, unlike gas which can be transported safely and securely straight to the boiler or appliance. As well as tying up space and cost, heavy fuel oil storage tanks need to be correctly maintained – as does all the extra plant and moving parts associated with the use of heavy fuel oil including pre-heaters, pumps, fans, scrubbers and blowers.

With clean burning gas, businesses can simplify their maintenance regimes thanks to the elimination of soot deposits and the retirement of obsolete machinery.

Suitability for conversion to gas

If the organisation is located in or near to an urban area, connecting to mains gas is likely to be comparatively simple and pipeline investment costs low. It may be that heavy fuel oil usage is a legacy issue and switching to lower cost gas will provide an opportunity to potentially increase production through greater equipment efficiency as well as lowering energy costs for organisations.

For those located in more remote areas, investment in a new gas pipeline may appear to be more significant. But even with a pipeline stretching several miles, the large price differential between gas and heavy fuel oil means payback periods for investment costs can be short – sometimes as little as a few months. Once the initial investment is recouped, on-going savings on energy costs from lower priced natural gas will go straight to the business’ bottom line.

How Much Could You Save by Switching from Oil to Gas?

TED, by working with a number of leading utility infrastructure business, has extensive experience of connecting organisations to the gas network and helping them realise the large cost savings available by switching from heavy fuel oil to gas.

Organisations use differing amounts of heavy fuel oil dependent on their business activity and it is therefore difficult to give precise details of the cost savings an individual organisation can make. The table below provides guidance from two projects showing the energy cost savings achieved.

 

Case study 1

A large food and drink organisation in a rural location used heavy fuel oil as the energy source to fire the boilers in their manufacturing plant. They had investigated switching to gas in the past but found the investment cost to be too high and the payback period to be too long. With the cost of heavy fuel oil increasing they reviewed the costs again and found they could save £2.4m per year and their investment costs would be repaid in just over one year.

case study 1

Case study 2

A university using heavy fuel oil as an energy source for five boiler plants converted to natural gas and saved around £45,000 per year in energy costs and paid back the investment in new pipelines and infrastructure in 2 years. The university also reduced its CO2 emissions by 25%.

case study 2

Book your free assessment

TED’s unique combination of expertise, accreditation, nationwide coverage and links to the Gas Board, Transco and National Grid, ensures a streamlined and compliant utilities infrastructure solution is delivered for its customers – on time, on budget and with minimum impact on the environment, whatever the nature of their business.

Here at TED, we believe that all organisations should have access to competitively priced, reliable and clean energy.

TED is offering all heavy fuel oil users a free assessment to determine how much organisations could save by connecting to the gas network.

To see how much you can save, call TED on 0845 838 9830 or email danny.scott@theenergydesk to further discuss the benefits of switching from heavy fuel oil to gas.

 

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Why Businesses are Switching from LPG & Oil to Gas
2015-11-03T15:43:22+00:00
The Energy Desk