What nuclear fusion means for big energy users

Big energy users rely on the UK’s power network to provide safe, reliable electricity for their ongoing business stability. While the use of renewable energy is reaching an all-time high, concerns linger about its reliability. Nuclear fission has been supporting the drive to lower emissions but remains controversial and recently, science has been looking to the future. Could nuclear fusion be the solution?

Every business uses electricity but smaller companies and low level energy users can often handle short outages. Unfortunately big energy users are not so lucky. While solar and wind can be powerful contributors to the grid, they can’t meet all our energy needs. To decarbonise energy-intense industries such as industry or aviation, the development of hydrogen and nuclear is essential.

How does fusion work?

Unlike nuclear fission which splits an atom to release the energy and heat we need for electricity, fusion does it by combining two atoms. Under intense heat and pressure, two positively charged hydrogen isotopes are forced together to create a heavier element.  This releases the same heat and energy we see in fission.

While the process is more complicated than fission, the end result is far safer and more sustainable. It produces almost no radioactive waste material and if the system gets overwhelmed it shuts down automatically so there’s no risk of a meltdown. Not to mention, it is 25% of the cost of nuclear and half the cost of wind energy.

Fission power is fuelled by uranium which is mined, refined and remains dangerous for thousands of years after use. The fuel for fusion power is deuterium. This is found in seawater and the earth has a near limitless supply.

Fusion power promises clean, reliable energy and a consistent output day or night whatever the weather. Renewable power will certainly remain a key part of the plan but with the help of fusion power, we could completely eliminate the use of coal, oil and natural gas.

What is the problem?

Currently, efficiency is the big issue. Existing reactor designs have struggled to produce more electricity than they require for operation. This is mostly due to the scale of the designs and the fuel used for testing. Scientists have been working on the project for decades but lately, a lot of progress has been made. Current research aims to have a functioning, economically viable fusion reactor online by 2030.

The progress of this technology is often compared to the advancements made in microchip design. The processing power of a microchip doubles every year, (following a principle called Moore’s Law). Fusion research has followed a very similar trend.

If progress continues at the current pace, scientists hope to meet their targets and bring fusion into the fight against fossil fuels.

What do we do until then?

The main problem with nuclear fission reactors is the cost. Taking an average of 6 years to build and costing billions of pounds they represent a big commitment. Fortunately, we don’t have to wait until 2030 for the next advancement in energy technology. Small modular reactors and hydrogen fuel are getting ready to bridge the gap.

Small reactor, big energy

A popular option amongst energy researchers today is the Small Modular Reactor (SMR). These portable, self-contained reactor buildings are designed to be mass produced so they can be plugged into a power facility to generate electricity. Once used up, they would be returned to the manufacturer or moved into deep storage. SMR technology has made great progress in the last year and researchers hope to have a working model online in the next 5 years.

Hydrogen fuel

Nuclear power stations can also generate the temperatures required for the production of hydrogen fuel. The market for hydrogen has been growing steadily and is likely to maintain this trajectory in years to come. While not as energy dense as most fuels, hydrogen is more efficient than current battery technology and could greatly benefit the growing electric car market.

Where does EIC come in?

EIC are passionate about cutting edge technology. We regularly explore all the latest advancements and choose the best options for our clients. While fusion power may not be an immediate solution, the future for clean energy looks bright.

At EIC, we can help you manage your energy needs and ensure you meet your emissions targets. Our bespoke services can transform your energy strategy and integrate sustainability into the foundation of your organisation.

From procurement to onsite generation, we can help you find the most efficient and cost effective green energy solutions for your business. To learn more about working towards a clean, efficient energy future, contact us at EIC.

Triad demand rises despite winter lockdown

National Grid have published the three Triad dates for the 2020/21 season, which are listed in the table below. For a ninth consecutive year EIC has successfully called an alert on each of these days.

EIC hit all three Triads with only 14 Red alerts issued.

There was an increase in the number of Triad calls this year with 24 alerts issued in total. This compares favourably with other suppliers who called an average of 30 alerts across the Triad period.

triad dates

Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads. If consumers are able to respond to Triad alerts by reducing demand then they will be able to lower their final transmission costs.

First increase in peak demand for 6 years

This winter saw the first increase in peak demand since 2014/15 and the largest year-on-year increase since 2007/08. There are a number of factors which contributed to this including lower temperatures, a reduction in demand-side response and an increase in domestic consumption. While peak demand increased from last winter, average demand decreased by around 2%.

The rise in coronavirus cases at the start of the winter led to the Government imposing further lockdown measures. This led to a reduction in the number of businesses reacting to Triad calls and reducing demand at peak times. Our analysis has suggested there was up to 1GW less demand-side response than the previous winter. The lockdown also signalled a return to home schooling and working from home which subsequently increased domestic consumption. This increase was mainly driven by lighting and heating which are typically less efficient in homes than in schools and businesses.

The trendline below shows that weekday peak demand over the Triad period increased by an average of 0.5GW for every 1°C decrease in average temperature. Some of the variation in the graph can be explained by the two national lockdowns that were in place over most of the Triad period. Our analysis of the temperature-corrected data has shown that peak demand increased by around 4-5% once lockdown conditions were lifted in December. This coincided with a drop in temperatures leading to the first Triad on 7th December.

temperature vs demand graph

Cold January leads to increase in demand

The Triad season started with long periods of mild weather during November and most of December. Temperatures fell after Christmas which led to the coldest January since 2010 and the second coldest in the past 24 years. This is in stark contrast to January 2020 which was the second mildest in the past 30 years. Across the Triad season eight weekdays had an average temperature below zero, all of these occurring after Christmas. This compares to none the previous winter and only two for the 2018/19 winter.

The graph below shows that the first Triad fell on the only day before Christmas with an average temperature below 2°C, while the second and third Triads occurred during longer cold spells during the start of January and February. Wind generation continued to have an impact on peak demand as embedded generation is not connected to the grid and is instead seen as a drop in demand. All three Triads occurred on days when wind generation was less than 5GW as the drop in demand from embedded wind generation was reduced.

temperature energy price graph

TCR Final Decision

In December 2019 Ofgem published their final decision on the Targeted Charging Review (TCR), although the implementation date has since been delayed by a year due to the coronavirus pandemic. The main outcome of this decision is that from April 2022 the residual part of transmission and distribution charges will be levied in the form of fixed charges for all households and businesses. This means that there is one final chance for consumers to benefit from Triad avoidance over the 2021/22 winter period.

The TCR aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action it is likely that their future costs will rise.

Impact on Consumers

The graph below shows the average % change in DUoS and TNUoS costs across each region and meter type as a result of the TCR. Our analysis has found that most half-hourly (HH) sites will benefit from a fall in costs, however most domestic and non-half hourly (NHH) sites will see a small rise in costs. Southern areas will typically benefit from a larger decrease in costs than northern areas.

Consumers currently taking Triad avoidance action are likely to face an increase in TNUoS costs from Apr-22 as the effect of Triad avoidance is removed. Likewise, sites that have a capacity level set too high will also not benefit from the same level of cost reductions shown below as they are potentially placed in a higher charging band.

TCR graph

How EIC can help

With the confirmation that from April 2022 residual charges will be calculated using a capacity based methodology, now is the perfect time to undertake a capacity review on all of your HH sites. EIC’s Capacity Review service is a fully managed end to end offering. We undertake detailed analysis for each of your sites, outline potential savings and offer clear advice on what action you should take. If we find that your capacity can be reduced by more than 50% it may also be possible to apply for a charging band reallocation which could significantly cut your future DUoS and TNUoS charges.

EIC can also help you accurately budget and forecast your energy prices with confidence with our Long-Term Forecast Report. Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. The Long-Term Forecast Report is a valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend over the next 5, 10, 15 or 20 years. This allows you to confidently forward budget and avoid any nasty surprises. Whilst we can’t prevent the rise of non-commodity charges, we can ensure you are fully prepared for the increases.

What is driving corporate sustainability?

Rising interest in climate change means businesses are facing increased scrutiny over the environmental and social impacts of their practices. Mandatory carbon reporting already makes corporate sustainability obligatory for many big energy users. And securing funding in the future may entirely rely on a company’s ESG strategy thanks to financial guidelines like the TCFD.

Fortunately, there are many benefits to embracing corporate sustainability beyond ticking boxes. An organisation’s green credentials will only rise in value as the UK races towards its net zero target. Not to mention, at the heart of decarbonisation and sustainability is energy efficiency, which can uncover considerable cost savings.

There are various forces driving corporate sustainability, including a shift in consumer behaviour, policy changes and more ambitious government targets. These forecast a more permanent transformation in the business and finance sectors.

The race to net zero

The real fuel behind the environmental movement at the moment is the global race to net zero. Over the past year, the UK government has introduced new policies and plans to achieve net zero emissions by 2050. This includes new energy efficiency standards, increased renewable generation, hydrogen development, and a ban on petrol vehicles from 2030.

What is clear is that the green wave is coming.  To stay competitive, businesses will have to create sustainable strategies that prepare them for a net zero economy.

EIC can be your partner in this journey, from the first energy audit through to accreditation. Along the way, we help manage all your energy admin and take the stress out of complex carbon legislation. The path to net zero can be difficult to navigate, but our experienced in-house team of energy specialists provide end-to-end simplification. Giving you peace of mind, and your organisation a green, resilient future.

The Task Force on Climate-related Financial Disclosures (TCFD)

In November 2020, Chancellor Rishi Sunak announced plans to make alignment with the TCFD guidelines mandatory in the UK. This will apply to most sectors of the economy by 2025 including listed companies, banks, and large private businesses.

The Task Force on Climate-related Financial Disclosures was established in 2015 by the international Financial Stability Board. It is based on the growing consensus that climate change has immediate effects on economic decisions.

This new step towards mandatory transparency will require a more holistic view of a company’s environmental footprint. It also confirms that investors are growing more aware of climate-related risks and are putting more faith in organisations that plan ahead. For this reason, it can be beneficial for organisations to follow TCFD guidelines, whether they are obligated to do so or not.

Impact investing and the rise of ESG

Environmental, Social and Governance strategies are not new to the corporate sector, but they have become more important in recent years. Now with a heightened focus on climate change and social justice, ESG is becoming essential for securing future investments.

This goes hand-in-hand with the rise in impact investing, which goes beyond mitigating risks and asks – how is your organisation positively impacting the planet? This trend has seen a rise in companies with social or environmental missions.

Why choose true sustainability?

The rise in climate action has led to some companies ‘greenwashing’. This is essentially when a company markets themselves as being ‘green’ without taking real action to reduce their environmental footprint.

There are many benefits to genuine environmental sustainability. The most important being an organisation’s longevity in a changing market.

If the recent shift in policy and finance has taught us anything it is that total transparency will be essential in the future. While ‘greenwashing’ may have some rewards now, it is poor preparation for a net zero economy. And though it may be cheaper in the short term, organisations that are ignoring their energy efficiency are missing out on significant long term savings.

Why choose EIC on your journey to net zero?

At EIC we know that building an environmentally and ethically sound business is not only the smart thing to do, it is the right thing to do. Our in-house team can guide you through energy monitoring, carbon footprinting, green procurement and compliance legislation. Our aim is to provide you with holistic energy management and sustainable solutions that boost your green reputation and financial savings.

Contact us at EIC for a bespoke net zero roadmap for your organisation.

What the new Industrial Strategy means for big energy users

On March 17 2021, the UK government announced their plans for a new Industrial Decarbonisation Strategy. In efforts to reach net zero by 2050, more than £1 billion has been channelled into industry, schools and hospitals. The strategy’s blueprint plans to switch 20 Terawatt hours of the UK’s energy from fossil fuels to low carbon alternatives.

The world’s industry sector generates one quarter of global GDP every year, as well as a significant percentage of jobs. However, industry also makes up a staggering 24% of global energy related carbon emissions. It is for this reason that the decarbonisation strategy is vital in championing a sustainable industrial future.

The strategy aims to cut two-thirds of emissions by 2050, meaning a 90% cut in comparison to 2018 levels. In addition, three megatons of CO2 are expected to be captured from industry by 2030. If this is achieved, the UK would become an international leader in industrial decarbonisation and manufacturing of low carbon products. But what does this mean for big energy users?

How will the decarbonisation strategy impact big energy users?

Carbon pricing

A carbon pricing tool will be introduced that helps assist businesses take account of their emissions by providing them with investment decisions. These measuring tools could potentially save businesses £2 billion in annual costs.

This project will ensure that businesses are maintaining the correct policy framework in switching to low carbon products. New product standards will also ensure that manufacturers are able to clearly identify their products as low carbon.

Financial benefits

It is imperative that this green revolution comes with economic benefits. Through greater energy efficiency, it is predicted that businesses will be provided with commercial opportunities and the chance to save on costs. These opportunities will be available across not only the UK, but global market.

Transforming industrial processes to include low carbon technology will benefit businesses tenfold. Significant costs will be saved on raw materials following a push for more sustainable practices, such as 3D printing and AI. Following the economic downturn created by Covid-19, finding a green recovery for the economy is vital.

Green links

The revamped decarbonisation strategy is heavily linked to the Industrial Decarbonisation Challenge, in which nine green tech projects will receive a cut of a £171 million grant. Announced last year as a £139 million project, the budget was further raised once the winner’s projects were announced. This challenge was created to support low carbon innovations across nine regions in the UK including Scotland, South Wales, Humber and Teesside.

As part of the Public Sector Decarbonation Scheme, £932 million has already been granted to 429 projects across England. This will fund low carbon heating systems such as heat pumps and, solar roof installations.

The strategy has also seen the emergence of the Infrastructure Delivery Taskforce, otherwise known as ‘Project Speed’. The taskforce will ensure that land planning is fit for low carbon infrastructure. This project will focus on delivering infrastructure that is quick, efficient and sustainable. It could also generate over 80,000 green jobs.

How can EIC help?

At EIC, we provide businesses with comprehensive energy management, as well as next generation energy technology. Our in-house services range from green energy procurement to onsite solar instalment and battery storage.

On the journey towards net zero carbon emissions, it is imperative that the economy has a sustainable Covid-19 recovery. By championing both efficiency and self-sufficiency, EIC are dedicated to finding the most suitable and sustainable solutions for your business. Get in touch to learn more about how EIC can help your business work towards a profitable and environmentally friendly future.

Targeted Charging Review (TCR) Guide

The Targeted Charging Review (TCR) was launched by Ofgem in 2017 to reduce distortion across the network. We look at how these changes will impact consumers and how we can help businesses prepare.

What does the review include?

Changes to DUoS and TNUoS

Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges cover the costs of maintaining the electricity networks that supply your energy. Ofgem will be implementing changes to these charges to ensure that costs are distributed fairly.

This means that from April 2022 a proportion of your DUoS and TNUoS charges will depend on a series of voltage-based bands.

Transmission charges (TNUoS) for non-domestic consumers will be based on a series of fixed charging bands set for the whole country. For distribution charges (DUoS) domestic consumers will pay a single residual charge set for each distribution area. Non-domestic consumers will be charged based on a set of fixed charging bands also set for each distribution area.

Bands for non-domestic customers will be determined by a consumer’s voltage level during the 24-month period ending in 2020. Some consumers may need further segmentation. For larger consumers, these boundaries can be defined based on the agreed capacity. And for smaller consumers, these can be based on net consumption volume.

The series of fixed charging bands will be published at a national level and set for each Distribution Network Area. Ofgem will review and may revise these charging bands and their boundaries so that they can be implemented alongside new electricity price controls.

Changes to Triads

The review will also remove the Transmission Generation Residual embedded benefit (Triads) from April 2022.

Triad periods are the three highest winter peak periods. They are retrospectively calculated in March each year and form the basis of the transmission network component (TNUoS) of large companies’ energy bills. By reducing consumption or switching to onsite generation during suspected Triad periods, some firms can save large amounts of money on their bills.

Ofgem believes that removing Triads is an appropriate compromise between addressing the largest distortions in the market and reducing the distributional impacts on consumers.

This leaves one final Triad season to take place over winter 21/22. Beyond that, there will no longer be any incentive for Triad avoidance. And companies that were taking action to reduce costs during Triad periods could see an increase in their electricity bills.

What impact will this have on consumers?

The TCR changes are set to benefit larger consumers with half-hourly (HH) meters whilst domestic and NHH sites will see a small rise in costs. Consumers outside of London are expected to experience a rise in DUoS fixed costs. These will be partially offset by a decrease in DUoS unit costs. Most HH sites may also benefit from a drop in TNUoS costs. Whereas domestic and NHH sites face a potential rise in TNUoS costs.

The graph below shows that southern areas are more likely to see a larger decrease in costs than northern areas. HH sites in London, for example, will see TNUoS and DUoS costs decrease by an average of 40%. Whereas HH sites in Scotland will only see an average decrease of 7%. Incidentally, London is also the only area where domestic and NHH sites will see a net benefit from the TCR changes.

Consumers currently taking Triad avoidance action are likely to face an increase in TNUoS costs from April 2022 as that benefit ends. Likewise, sites that have a higher capacity level will not see the cost reductions shown below as they could be placed in a higher charging band. Extra-high voltage sites are not included in the graph below as they are subject to site-specific tariffs and need more detailed analysis.

tcr graph

DUoS and TNUoS costs make up around a quarter of the average electricity bill so the % change in total costs is shown on the right-hand axis.

How EIC can help

The figures calculated above are based on an average consumer in each charging band. The analysis covers a wide range of consumers with varying demand profiles and cannot simply be applied to individual consumer costs.

The best way to determine exactly how the TCR will affect your business is with our Long Term Forecast Report. This provides your business with a specific breakdown of electricity costs over a 5, 10, 15 or 20 year period. This valuable report will allow you to confidently plan your long-term budget and avoid any nasty surprises.

To learn more read about our Long Term Forecast Report or contact us today.

SECR: How to make it work for your business

Compliance with carbon legislation such as Streamlined Energy and Carbon Reporting (SECR) has become a corporate obligation. But it can also unlock a range of opportunities for businesses seeking sustainable growth.

This is because the energy audit and reporting involved in carbon compliance can gather valuable data. This can then help to unearth hidden financial savings by highlighting areas of inefficiency and waste. Not to mention, sealing those leaks to reduce carbon emissions.

So, while it is often seen as a tedious piece of admin, SECR can help organisations prepare for the UK’s transition to a net zero economy. Smart energy management can also help to build a resilient foundation for any future business.

Here are some of the hidden benefits businesses are privy to if they make the most of SECR.

Getting more out of your energy audit

If your organisation falls within the scope of SECR, your energy and carbon reporting is already a priority. But the data collected has value far beyond mandatory compliance.

Submetering and monitoring provide a window into the performance of your building. Helping to pinpoint any weaknesses and inefficiencies in your systems. This holistic view of your energy use and carbon emissions can help you build a smarter, data-driven sustainable strategy.

With the next-generation technology available today, you can go beyond the data and incorporate smart controls. Our sister company, t-mac, offers Building Management Systems (BMS) that enable real time insights with IoT technology. For big energy users, this is an invaluable energy management tool for streamlining carbon compliance processes.

Ignoring this data after the initial report would mean that you risk wasting time and money on energy admin. It would culminate in nothing more than standard compliance.

Preparing for future Scope 3 reporting

Currently, organisations are mandated to report on only scope 1 and 2 emissions.

Scope 1: Direct emissions from company operations such as company vehicles or factories

Scope 2: Indirect emissions from company operations such as purchased electricity generated by fossil fuels

But it is a long road to net zero, and scope 3 emissions will likely become a part of mandatory reporting before 2050.

Scope 3: Indirect emissions from company supply chains such as shipping, business travel, and raw material extraction

By making the most of your current reporting you can prepare your organisation for future compliance. This gives you an advantage over your competitors and helps mitigate any risks, and costs, involved in last-minute reporting.

Boosting your green credentials

Businesses are waking up to the rapidly evolving corporate landscape and the growing focus on transparency. With climate change now being widely recognised as a global challenge, it is clear that every industry will have to innovate and adapt. Any organisation’s growth and longevity will increasingly rely on its levels of sustainability and environmental, social and governance. Both at a leadership level but also embedded in the corporate identity as a whole.

SECR compliance spans areas like energy management, sustainability, and financial reporting. This challenge can be transformed into an opportunity by establishing open communication between teams and forming a more cohesive SECR team.

When EIC helps a client navigate complex carbon legislation, we go beyond compliance. By establishing a long-lasting sustainable strategy for your team, we help to incorporate green values into every part of your corporate identity.

Beyond compliance, genuine sustainability will become an expectation among employees, customers and stakeholders. While greenwashing is widespread now, with companies cashing in on the climate-friendly trend, this won’t be an option for long. With transparency made mandatory and rising interest from the general public, companies will struggle to hide their skeletons.

SECR can help you begin your sustainable journey by rallying your team around your environmental mission.

How can EIC help?

At EIC, we provide businesses with end-to-end guidance and support for carbon compliance including EPBD, ESOS and SECR. Our dedicated carbon consultants have supported over 300 organisations, many of them are big energy users with complex energy admin. Our goal is to simplify and streamline your energy management from utility connections to net zero guidance.

If you want to understand how to put the findings from your SECR reporting to good use or need to begin the reporting process, contact us at EIC today.