A day in the life of '''

1
A day in the life of ...

• Andrew Jones
• Head of Energy
• Property, Engineering Facilities Management
• The Boots Company PLC

2
My talk

• A little about The Boots Company PLC
• Our Powerhouse key personnel

• Issues- CHP - General
• The future

3
Welcome to Boots

• One of the best known and most trusted retail
  names in the UK. 1,400 stores, 80,000 people
• Retailing, Product development manufacture
• A leader world-wide in over the counter
  healthcare products Nurofen, Strepsils, E45 and
  Clearasil.

• 1,300 new products every year
• 1,000 tonnes of cosmetics
• 85m prescriptions per year
• Provider of services and advice. laser eye
  surgery, dentistry, chiropody, hearingcare,
  opticians, osteopathy, homeopathy and beauty
  treatments.

4
The Boots Campus
5
Energy Centre 1930- 1996
6
Our options in 1995
NPV
Fuel Cost
Capital Cost
Benefit
Difference
million's
000's
million's
Replace Boilers Only
NIL
12.0
NIL
Heat Only Station
(3.1)
12.3
(1,748)
Distributed Boilers
(11.4)
(1,566)
17.7
New Plant in old station
11.2
14.0
1,121
New Energy Centre
13.1
19.5
1,430
Contract Energy Management
8.8
1,384
2.2
7
Energy Centre 1996 - 2002
3X 11 te/hr waste heat boilers
38m multi-flue
4X 20te/hr Boilers 12 barg, 240 0C
3X 4.7MW Typhoons
8
The reality of 2002
NPV
Fuel Cost
Capital Cost
Benefit
Difference
million's
000's
million's
Replace Boilers Only
NIL
12.0
NIL
Heat Only Station
(3.1)
12.3
(1,748)
Distributed Boilers
(11.4)
(1,566)
17.7
11.2
14.0
1,121
New Plant in old station
6 year old Plant 3.2
Contract Energy Management
8.8
1,384
2.2
Optimisation based on Import, Export and gas
prices means plant runs
15 less, though site load 5 up
9
Some issues for us - in managing energy CHP
plant

• Data from Suppliers is bad 400 stores ok but
  1,100 very poor
  makes managing energy very
  difficult
  makes reporting C02 or Emissions
  Trading difficult

• Registration is problematicand complicated

• Neta affects CHP little interest from
  licensed suppliers re export
  
  balancing market risk affects import and export
  
  increases costs and reduces
  CHP viability
  little
  opportunity for micro CHP in stores

• The Carbon Trust
  incentives targeted at SMEs
  
  ECAs not significant
  
  impact for large IC?

• Competition competition is now seriously
  reduced
  the change of
  supplier process is too
  
  complex.

10
Data flows during Change of Supplier Process
Existing Supplier
11
Our supply chain philosophy

• The Lean concept
• Eliminate all waste by focusing on what is
  required by the customer
• Produce only what the customer wants when the
  customer wants it

Simplify steps perfect them!
12
RWE EON EDF SP SS Others ...
Competitionin the UK?
13
Summary our thoughts about the future

• General
• Competition is inhibited by over-complex systems
• Competition is inhibited by Supplier take-overs
• DC needs to be improved and raw data more
  transparent
• Code 5 comms costs are too high
• 100 of CCL money needs to be re-cycled to
  payers 0 leeched

• We are under-utilising an expensive asset because
  of Neta .. and Gas prices
• Having QA status is good, but even this was
  hard fought
• New, smaller suppliers \ consolidators cannot
  compete - pass-through all risks!
• Export CCL exemption, ECAs, etc help - but not to
  any significant degree
• Rates allowances should be improved - a more
  level playing field
• Currently, we cannot make CHP fly on any other
  UK site

CHP