Can a flexible energy system lead us to net zero?

A recent project launched by Carbon Trust and Imperial College will explore the potential for a flexible energy system and its future role in decarbonisation. EIC looks at what a flexible energy system is and how it can reduce the cost of reaching net zero carbon emissions in the UK by 2050.

What is a flexible energy system?

New technology has the potential to turn our passive energy system into a smarter, more sustainable one in the very near future. This means modifying generation and/or consumption patterns in reaction to change in demand or price.

There are three main ways to achieve flexibility in the energy system:

  • Interconnection: purchasing power from neighbouring markets at times of peak demand.
  • Storage: storing excess energy and using it at times of peak demand.
  • Flexibility on the demand side: consumers cut their discretionary power use at times of peak demand for financial incentive.

Until now, flexibility in the energy industry has typically been provided on the supply-side. Now it’s becoming clear that demand flexibility will be crucial for balancing the system in order to reduce costs and decrease carbon emissions. With smart meters that can reduce consumption at peak times and financial incentives, demand flexibility could be an easy and rewarding energy option for consumers and energy operators alike. A report from the National Infrastructure Commission says that £200 million a year could be shaved off the UK’s grid operating costs if just 5% of the current peak demand were met through demand-side solutions.

There are also smaller scale assets that could prove just as effective at balancing the grid, like distributed energy resources (DERs) such as nearby or on-site solar panels, wind turbines, heat pumps or batteries. By reducing demand on the system, there’s less reliance on non-sustainable energy sources during peak demand periods. These smart solutions are becoming increasingly cost effective and in-demand, evidenced by their sustained fall in price and rising investment interest.

Why the UK should lead the world in smart power

Greener policies have seen increased support in recent years, with an emphasis on renewable energy. A strategy set out in another NIC report for 2020 – 2050 recommended 50% of all generation should be supplied by renewable power by 2030, and an entirely zero-carbon electricity supply by 2050.

The question is, how can this level of renewable integration be implemented in a consistent and cost-effective way?

One of the current issues with renewable generation is it is fairly inflexible, so finding more flexibility through demand, interconnection, and storage is key. It could also be the most cost-efficient way to reach net zero. According to an NIC report, Smart Power, a more flexible power system could save consumers as much as £8 billion a year by 2030.

Finding flexibility with EIC

Achieving more flexibility in the energy system is an integral part of EIC’s client commitment. Through a variety of services, including flexible procurement, smart metering, and many years of experience working with carbon monitoring and compliance, EIC goes to great lengths to offer consumers freedom and flexibility. Our goal is to find the bespoke energy package that best suits your business or property, while simultaneously lowering your costs and carbon emissions.

Find out more about our energy management services.

 

LED lighting: Reducing costs and carbon at the same time

The past decade in carbon savings has been awash with success stories surrounding the installation of LED lighting systems. EIC has summarised a few public sector examples below and guidance on how your properties could benefit from a lighting upgrade.

Success in the NHS

A UK NHS trust recently made facility management news as it implemented a comprehensive upgrade to its lighting systems. Undertaking a site-wide LED installation means that the trust will now enjoy savings in excess of £180,000 annually. Provided these savings remain consistent, the project will have paid for itself within six years.

The gains of the forward-thinking trust are not only measured in pounds and pence; the switch to highly efficient LED lighting, whose lifespan is more than quadruple that of its fluorescent counterparts, also means reduced maintenance as well as a significantly diminished carbon footprint.

Capital gives green light for LEDs

Earlier this year, the city of London underwent a large-scale retrofit of over 8,000 traffic signals, regulatory box signs and push buttons. Upgrading these sites to LED lighting is expected to deliver energy and cost savings of 75% for Transport for London.

“It’s making our infrastructure greener, more sustainable and cheaper to run and not only that but as LEDs are more visible it is making our roads safer…”

– Glynn Barton, TfL’s Director of Network Management

This conversion echoes another 2018 retrofit that saw 25,000 London signals at 900 sites upgraded with similar technology.

Hertfordshire County Council is taking this attitude a step further and has pledged to replace all the street lighting in its seat with LED illumination. The project reached its final stage earlier this year and the council expect it to reduce street lighting CO2 emissions by more than half. In material terms, this equates to 12,000 tonnes of carbon dioxide and £5m saved for the residents of Hertfordshire.

The Power of LED

The commercial picture

The benefits of LEDs are not just public sector, businesses can also make significant savings with this technology. Consider that a 20% reduction in energy costs can have the equivalent economic effect of a 5% increase in sales.

The difference with an LED installation is that it is permanent, and not subject to market conditions.

Traditional lighting actually wastes 95% of the energy it uses on the heat it produces. Since it operates at low temperatures, LED lighting reduces this waste by 90%. This also makes LED a much safer option if the lighting is located near human activity.

By effectively removing this heat source, temperature control systems like air conditioning will operate with greater efficiency. As EIC’s TM44 blog demonstrates, this too can equate to significant savings.

Light the halls

While the office Christmas party may be cancelled this year, it’s worth mentioning the seasonal savings potential of LEDs.

Granted, decorative lighting is not a year-round expense, but incandescent bulbs can run up quite a bill, especially for smaller retail businesses.

Fortunately holiday lights are now also available as LEDs, with several benefits included. Aside from the aforementioned savings, LED lighting is much more durable as well. Epoxy is used in place of glass to create their lenses, so they are highly resistant to breakage.

Bulbs last dozens of holiday seasons before needing replacement and low voltage requirements means many can share a single outlet.

EIC’s Lighting Solutions, including complimentary lighting control systems, has helped dozens of organisations. These controls include movement sensors, time clocks and light sensors which can all support an LED upgrade in reducing costs and CO2 footprint.

The EIC service includes initial surveys to establish the unique needs of a site, later formulating a bespoke proposal. Once installation is complete, EIC will also provide supplementary training to teams within an enterprise to ensure the new equipment is used as effectively as possible.

A full breakdown of this service is available by contacting the EIC team here.

 

Simplifying Display Energy Certificates

EIC discusses the purpose behind DECs, the benefits they offer and how the EIC carbon team can help you secure one.

What is a DEC?

Display Energy Certificates (DEC) have been a required document in public buildings since 2012. While some structures are exempt, those with floor space of less than 250m2, larger buildings fitting certain criteria must comply. These are properties that are occupied by a public authority and frequently visited by the public.

The certificate summarises the energy performance of the building based on criteria known to affect energy demand and usage. These criteria include the type of building under assessment, its total floor area and fuel use.

Accreditors then measure this data against specific benchmarks to determine the building’s overall energy performance. Newer buildings are more likely to have consolidated record keeping on a building and their HVAC. However, older properties may need to collate this data from various departments and archives.

Since data might be stored in a multitude or locations and formats, this process can be complex and time-consuming. However, the more intelligence that can be sought, the more valuable the DEC becomes in its ability to help identify sources of energy waste.

What are the benefits?

The primary benefit of a DEC is to provide a litmus test for the current energy efficiency of a building. This data can then guide improvement strategies for the structure’s utility usage, thereby reducing their demand and subsequent cost. Only accredited assessors are qualified to analyse and deliver DECs. Part of their service is identifying opportunities for improvement and providing guidance on how to implement these improvements as well.

DECs also communicate your commitment to carbon reduction to visitors, due to the requirement to display them prominently. As consumers become more aware of the effect of their spending habits on the environment, it will dictate the businesses they are willing to interact with. A DEC demonstrates dedication to reduce to or maintain an efficient rating for the building.

Do you need a DEC?

If you are a public authority receiving frequent public visitation, with usable floor space in excess of 250m2, then you will need to display a DEC. The validity period of these certificates does vary depending on building size. The DEC of buildings between 250m2 -1000m2  remains valid for 10 years. However, buildings larger than 1000m2 must renew every year.

Those in need of a DEC or those looking to renew would benefit from shopping around. Ideally looking for a compliance specialist that can offer them the most value with their service.

EIC offers an end-to-end DEC acquisition, starting with a comprehensive site survey, if a lack of available data necessitates it. A copy of the accreditation documents will be forwarded to your organisation once the process is complete.

The EIC team pride themselves on providing relief from the complex process of accreditation, allowing business leaders to focus on their own clients and services. To date, EIC has produced over 5,000 DECs and currently manages the renewal process for over 600 sites.

Each of EIC’s EPBD delivery team, have worked within the schemes since their inception, thereby bringing trusted and reliable expertise to your project.

The EIC carbon team provides various compliance services including major carbon-legislative guidance and all EPBD services (EPCs, DECs, TM44). Since these accreditations work in tandem, and share data sets, getting them under one roof can save you some time. While each of these carbon services can be found on EIC’s trusted compliance page, those seeking the DEC offering specifically can find it here.

 

CCA Deadline Approaching: 30th November

The CCA applications deadline draws close and EIC explores the benefits of compliance and why firms should submit their application as soon as they can.

The two-minute warning

After half a year in lockdown energy professionals could be forgiven for falling out of touch with current events. Isolation has left many of us with that post-Christmas, pre-new year feeling of not knowing our days and weeks apart.

That is why EIC has taken the time to put together a small reminder of the now-imminent CCA (Climate Change Agreements) deadline and why it is worth paying attention to.

Climate Change Agreements allow energy-intensive firms to receive reductions on their Climate Change Levy (CCL) obligations, in return for abiding by set energy efficiency targets.

The government extended the CCA for a further two years back in June. Which gives eligible organisations as much as a 92% reduction – on electricity, and up to 83% on gas from payment of the CCL (Climate Change Levy).

The scheme is as potent as it is ambitious. The latest extension alone offers the entire UK business sector approximately £300m per annum in savings.

The scheme is open to new entrants for the first time since 2018 and presents an unequalled opportunity for energy-related savings. However, the time is drawing near to apply for the extension to the scheme, with some trade associations requiring submission up to 4 weeks beforehand.

In addition to this added processing period, the process of assuring compliance can often be complex and long-winded. This latest target carries several charges including an increase in both buy-out prices as well as the financial penalty price for target period 5.

A helping hand

Energy professionals who are now trying to wade against the current of recession to stay afloat may simply not have the time or capacity to undertake the CCA process – thereby risking missing out on this golden opportunity.

EIC demystifies this process, adopting a 360 degree view, assessing the benefits to your organisation and advising of scheme’s requirements. EIC can fully manage the data and reporting requirements of the CCA process, alleviating the burden on your resource, whilst receiving the benefits available. To get started on the CCA compliance process, your organisation can find EIC’s full carbon offering here.

The Hydrogen Age

EIC explores the potential of Hydrogen fuel to decarbonise the UK, its domestic supporters and success it has already enjoyed in the EU.

Hydrogen showing carbon the door

In the wake of COVID-19, economic recovery is now top priority for the UK government. However, Boris Johnson and Rishi Sunak have both staked their flag in making sure it is a ‘green’ economic recovery. As such, industry leaders – particularly within the energy sector – have reopened the conversation on the role of hydrogen in reaching net zero.

The CCC (Committee on Climate Change) published a report in 2018 summarising its recommendations for a UK hydrogen strategy. The hope is to utilise Hydrogen in the UK’s heating systems, specifically by blending it with natural gas, to reduce its carbon footprint.

UK buildings account for 40% of its energy consumption and 70% of industrial building energy is used on space heating and cooling. With these figures in mind, hydrogen’s value is clear to see provided it can get off the ground.

Unfortunately, there are several roadblocks to hydrogen use on a mass scale. The biggest of these is that it would require an infrastructural overall of current heating systems. Blended gas requires plastic pipes while the vast majority of those in the UK are iron.

In addition, the production of hydrogen fuel is highly carbon intensive. Fortunately, this embedded carbon can be offset by CCS (carbon capture and storage) technology into its production.

However, these are costly caveats to making hydrogen a viable fuel replacement. Naturally, there are concerns that the government may opt for cheaper, quicker progress that, ironically, may prove unsustainable.

 “On the one hand, we need to put money where it has an immediate economic impact and in the most affected sectors. On the other, we need to keep in mind the long-term benefits of making our economy more resilient.”

– Kadri Simson, European Commissioner for energy

 

Private sector rescue

The EU commission announced in June that it would provide €750 billion for its green recovery plan, reserving €1 billion for R&D into green hydrogen. Simson has stated that hydrogen has the potential to capture 10-16 percent of the EU’s energy market by 2050.

Following the EU’s lead, industry leaders in the UK approached the government and questioned the absence of hydrogen in both the spring budget COVID recovery plan.

Last month, a letter from the chiefs of four major unions implored the government to move forward on hydrogen development. The leaders of GMB, Prospect, Unison and Unite cited, in the letter, the massive reductions this could offer in the heat, transport and heavy industry sectors. Of course, the development of any new technological sector would also create thousands of jobs.

However, the letter was only one component of the “Hydrogen Strategy Now” campaign led by firms like EDF and Siemens. These companies, along with others supporting the campaign, have stated intentions to invest £1.5bn into hydrogen development.

The government must now sieze the initiative and provide the necessary funding and support to make hydrogen happen. Firms that desire to adopt a long-term view of their energy and heat use might benefit from EICs services.

EIC’s combined heat and power solution has saved businesses up to 40% on energy costs. EIC can also provide a  carbon management team able to deliver a comprehensive net zero strategy. Full details of these services, as well as others, are on the EIC website.

 

EPBD: What you need to know

EIC unpacks Energy Performance of Buildings Directive (EPBD), it’s origins, purpose and how firms can make sure they are compliant.

The Kyoto Protocol

Two years after the 1992 UNFCCC (United Nations Framework Convention on Climate Change), the Kyoto Protocol emerged as an extension to the conventions primary treaty.

The UNFCCC’s objective is the following:

“Stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”

The extension took effect in 1997 and was as much political as it was scientific, viewing the climate crisis from a purely mathematical perspective. The consensus was that industrially developed nations were far greater contributors to climate change than rural and agricultural ones.

CO2 emissions would not be divided equally between the committed nations but rather based on their industrial activity. Subsequently, the EU and its member states committed to binding emission reduction targets which remain in effect today.

Following Kyoto, the EU established EPBD in January 2003 to ensure sufficient CO2 reductions from European buildings. The primary objective being to incentivise widespread improvement of their energy efficiency. The beauty of this that its criteria apply more to industrially developed nations due to their carbon intensity.

What legislative requirements are covered by EPBD?

The UK governments interpretation of embedding EPBD, recognises 3 streams of certification, required by both private and public sectors:

  • DECs (Display Energy Certificates) – required by publicly owned or funded buildings on an annual basis
  • TM44 / Air Conditioning Inspections – required for all buildings with installed comfort cooling
  • EPCs (Energy Performance Certificates) – required for both domestic and non-domestic new builds, majorly refurbished, sold or let out

The certificates are valid for 10 years from issue. EPCs underpin the MEES standard, whereby a building cannot be sold or let with an energy rating below E.

Building better 

As lockdown restrictions ease, and the ‘Build Back Better’ initiative gains momentum, compliance with EPBD will only become more relevant.

The most recent recast of EPBD, in 2010, focuses on new builds and major renovations thereby adopting a long term view of the situation.

EPBD also protects consumers, it requires disclosure of efficiency measures within a property to buyers, to inform them of running costs.

The requirement led to the widespread introduction of Energy Performance Certificates (EPC), one of the major successes of EPBD to date. First introduced in 2007, the UK national database now contains energy performance information on a staggering 40% of homes.

Last year marked the EPBD deadline for all member states to have NZEBs – or Nearly Zero Energy Buildings. The criteria for an NZEB is simply that it have a very high energy performance, made possible by quality insulation and on-site renewable generation.

Since Zero Carbon Homes was scrapped in 2016, EPBD is one of the few legislations that targets the energy performance of buildings.

The fervour in reaching net zero means that this legislation is here to stay and so firms should be asking how they could ensure they are taking part.

Upgrading for EPBD

Improving the energy performance of a structure needn’t be a complex process, however it must be an informed one.

EIC’s approach to structural efficiency is twofold, assessing pre-existing assets using integrated metering and monitoring technology. Next, EIC adopts an end-to-end approach, carrying out initial certification, devising and implementing improvements. Finally undertaking a certificate review to demonstrate progress.

Depending on site limitations, EIC can consult on the installation of on-site generation, with a particular focus on solar generation. Thereby lessening a structure’s energy consumption, lowering your utility bills and improving its overall energy profile. Full details of these services, as well as testimonials from past clients, can be found on the EIC website.

Private investment, public gain: Green investment after lockdown

EIC discusses the Northvolt gigafactory, and how private funding is now flooding into green investment and sustainability projects.

Recharging capital

It began with grassroots environmentalism, then government mandate and finally, major financial institutions have started supporting a green future in earnest. Support in the form of loans and bonds for sustainable economic development and innovation, specifically solar storage options.

One such investment occurred last Thursday as the European Investment Bank (EIB) issued a €350 million loan to Northvolt for its lithium battery plant.

The site is based in Northern Sweden, and is intended to produce the most environmentally-friendly battery storage packs to date. Using 100% renewable energy and locally-sourced materials, it will soften characteristically high environmental cost of the Lithium-ion batteries it produces.

The cells will be used mainly in cars, which are responsible for 12% of the EU’s current carbon footprint.

Northvolt has already secured a €2bn supply contract with BMW and Volkswagen is interested in collaborating on a similar factory in Germany. The latter of these two is no surprise after VW unveiled plans to convert its Emden production plant to electric vehicle production.

Lofty ambitions

The gigafactory will have an initial production capacity of 16 GWh per year and be the first of its kind.

Both the investor and supplier share similarly ambitious intentions moving forward as well. Northvolt plans to scale capacity to 40GWh annually while, back in May, EIB stated its intention to increase green investment financing to over €1bn by the end of the year.

China still dominates the solar battery market of course, producing more than five times that amount in 2019 alone. However Northvolt and EIB have just set an important precedent and other banks are now joining the green investment fray.

“I believe that EIB financing support for Northvolt has been a textbook example of how our financial and technical due diligence can help crowd in private investors to visionary projects,”

-Andrew McDowell, VP EIB

The COVID-19 lockdown has wrought chaos in several energy markets, most notably West Texas Intermediate – which went negative for the first time in April.

Projections show global growth shrinking to -3% after such dramatic losses in this market, as well as many others. Fortunately, the immediate crisis of COVID-19 has not blinkered business and political leaders to the looming threat of climate change.

Despite these losses, April saw a 272% increase of ESG (environmental, social, governance) bonds compared to April last year.

Green investment rush

Finally, investment in green infrastructure has become vogue among Europe’s financiers and firms should take notice. Last week Sadiq Khan promised £1.5bn to upgrade London’s water and gas networks and prepare for more electric vehicle use.

 

Beyond our shores, Danish investment bank, Saxo, is already making predictions about renewable technology taking over the global market.

“Governments will increase investments and subsidies for ‘green’ industries, starting a new mega trend in equity markets… We believe that these green stocks could, over time, become some of the world’s most valuable companies”

­– Peter Garnry, Saxo Bank Head of Equity Strategy

Renewable technology rewards boldness and expediency with huge ROI over time. However the endorsement of institutions like BlackRock and EIB helps reduce risk profiles, making it more attractive to investors.

EIC have championed firms renewable interests for over 40 years, buying and managing approximately 12TWh of energy each year.

The EIC sustainability offering provides carbon compliance, utility management and procurement advice. Combining this expertise under one banner, you and your investors will have all your bases covered when outfitting your firm for a low carbon future.

 

 

 

Success is negative: Carbon negative office spaces

EIC explores the carbon-negative office spaces that are emerging, their role in the green recovery and the technology that make them possible.

Favour the bold

The path to net zero is fraught with obstacles and among these is the carbon intensive nature of the mainstream construction sector. Materials like concrete are extremely resource intensive to produce.

While often offset on a citywide scale, some firms are beginning to focus on the buildings themselves and work sustainability into their initial designs.

Blazing the smoke-free trail are Norwegian architects Snøhetta, who will design exclusively carbon-neutral buildings over the next decade.

The aim is then that from 2030 onwards, Snøhetta will focus on creating carbon-negative designs.

Carbon negative structures either generate more energy than they consume, or sequester more carbon than they produce. The figure includes expenses from initial  construction and materials, as well as operation and decommissioning.

Elusive costs like these are problematic, with 85% of building emissions generated by materials and construction, before the structure is ever used.

“For the next 10 years, we have the ambition of having projects on the table that will become CO2 negative in the cradle-to-cradle definition… This means we have to understand the embodied energies and all the materials used.”

-Snøhetta co-founder Kjetil Thorsen

Balancing the books

Since less intensive materials suited to large scale construction are not yet widely available, balancing through generation will be key.  Solar is central to Snøhettas plans, with structures taking about 60 years to hit carbon negative with embedded generation. The architect recently completed its Powerhouse Brattørkaia project, which boasts an identical timeline for net negative. The Powerhouse also sports a cutting edge ‘wedge’ shape designed to maximise exposure to the sun’s rays.

While this may seem like a life sentence for business leaders, it is refreshing that groups like Snøhetta are beginning to think in terms of multi-generational gains.

Bywater Properties are leading a similar development project aimed to create the lowest-carbon workplace in London. The office, named ‘Paradise’ for the road it occupies: Old Paradise Street. Supermarket, Iceland has already secured the majority of this space, planting a green flag for the brand in the minds of its customers.

My generation

It is no secret that the attraction of short-term gains have significantly contributed to the environmental challenges we now face.

However, vision extending beyond the next board meeting can help transform the UK and global economy to reach net zero. Carbon negative buildings are a part of that vision.

Unfortunately, that can feel exclusionary to firms that have already established their sites and do not have the luxury of completely retrofitting them.

The complex, modular nature of structures does mean that while carbon negative may not be feasible, ‘carbon-light’ might be possible.

Intelligent building control is one of the most effective ways to improve your carbon profile. Primarily because it streamlines the carbon-producing elements of a building, mainly utility consumption, and shrinks carbon footprint as a result.

A holistic ally in carbon reduction is the addition of green spaces to working environments, since these also sequester carbon.

On-site generation further reduces your reliance on the grid and the subsequent sequestered carbon in meeting demand – particularly across long distances.

Other benefits include improved energy supply security, added leverage in procurement talks and a better carbon profile for crucial legislation.

EIC understands that intelligent building design and frugality around resource-use work in hand in glove. As such, EIC offers a comprehensive carbon service combining building management, intelligent procure and compliance acumen.

Marriage of these three pillars means unlocking the full potential of sites, and leveraging for the benefit of all. EIC’s full offering is on its services page.

 

 

 

 

Summer Economic Update

EIC explores Rishi Sunak’s Summer Economic Update and what it means for businesses looking to gain a head start in the green revolution in the UK’s future.

A brave new world

The build back better campaign received a large, public endorsement from Chancellor of the Exchequer Rishi Sunak this week, who pledged in the Summer Economic Update that £3bn would be committed to the new green economy. While this is only a drop in the proverbial bucket of the £160bn Covid-19 recovery package, it has been met with great enthusiasm from both business leaders and the public.

An E.on survey conducted earlier this year, polling 500 UK-based business leaders, demonstrated that 72% felt that the pandemic has given them cause to re-evaluate their organisations priorities regarding the environment.

During the announcement, the Chancellor revealed the two major fields of improvement to be energy efficiency in public structures and a £2bn Green Homes Grant for those not in social housing. The remaining £1bn will be invested in improving the carbon usage and profile of public sector buildings through measures including double or triple glazing and smart energy meters.

“Improving the energy efficiency of buildings is crucial for reducing our emissions…. this announcement of £3bn is a welcome first step… This funding needs to be part of a comprehensive plan to improve the whole of the UK’s building stock, creating tens of thousands of jobs for the long term, not here-today-gone-tomorrow.”

UKGBC chief executive Julie Hirigoyen

Sunak also announced that £50m worth of funding would be used to support trials into early-stage energy efficiency and flexibility technology for the UK’s least efficient sectors.

The majority of respondents to E.on’s survey believe that the primary responsibility for the UK’s green revolution lies with business leaders, and the UK public, it seems, agrees.

Dancing in the dark

One of the unforeseen gifts of the pandemic has been a heightened awareness both of our potential effects on each other within our society but also the affect that our species is having on the planet. It is no secret that human behaviour is partially responsible for large-scale disease outbreaks and as a result, consumers are becoming ever more cautious about which companies to whom they declare allegiance.

The Capgemini Research Institute has also conducted a recent survey that showed almost 70% of respondents are concerned the effect that their spending habits are having on the natural world. The institute also reports that 80% have altered spending habits in the last year in response to social and environmental issues.

However, while there is clearly a market trend developing in favour of sustainable business practices, ‘greenwashing’ and a lack of transparency threaten to shake consumer trust on a mass scale. Six in ten business leaders consider their clients to be well informed of their sustainability efforts but over half of consumers have stated difficulty in confirming corporate sustainability claims.

“…when baked into an organization’s mission and purpose, sustainability has the potential to entirely change an organization’s relationship with its customers and partners… As businesses focus on transformation in the wake of the pandemic, they should put sustainability at the heart of their efforts.”

Capgemini’s VP for consumer goods and retail Kees Jacobs said.

Getting a head start

Legislation will be one of the major lynchpins in the UK’s approach to a green economic recovery, however clearly signposted legislation could also help to bolster consumer trust.

SECR stands as not only an ethical benchmark for firms that are invested in a cleaner economy, but also a declaration of intent to consumers. Compliance to such legislation demonstrates to consumers that emissions reductions is a company-wide objective and therefore representative of your brand as a whole.

The palatability of SECR is also a major benefit, while it is a complex piece of legislation; the objective is simple and easily explained to non-energy professionals. Employment of the strategies necessary to ensure compliance, be they energy efficiency measures, supply chain reorganisation or on-site generation raises a green flag to would-be clients.

Fortunately, each of these listed strategies is covered under EIC’s carbon management team, who are able to utilise over four decades of experience to create a bespoke carbon strategy for your firm. The EIC services page contains full details of its compliance offering.

 

 

 

IETA’s net zero plan

EIC breaks down the IETA’s proposed ideas to help guide Europe towards net zero 2050, specifically the role cap and trade practices may play and why we must raise ambitions.

Rowing together

Last month the International Emissions Trading Association (IETA) announced its 2020s forecast for the price of carbon emissions, expected to rise to  €32 per CO2 tonne equivalent.

The IETA, in a report published last week, also outlined several ways in which international carbon trading, spurred by the increased price, could aid the fight against climate change.

The report outlined that some countries and firms were better equipped than others to reduce and replace carbon-intensive practices. Infrastructure, resources and trade exports are among the variables that can impede or hasten an organisations ability to stay within allotted carbon allowances while remaining soluble.

The trading of such allowances frees individual states and firms up to offset one another’s emissions in order to achieve the collective goal of limiting global temperature rise.

Moreover, it is effective; the European Union’s Emissions Trading System (EUETS) reported a drop of 29% in emissions from stationary structures when comparing 2018 to 2005, thanks largely to such ‘cap and trade’ schemes.

Cap and trade is not a novel concept, it has been suggested as a market-led solution to polluting industry for years. During his presidency, Barack Obama met with a lot of criticism for introducing a bill in support of such schemes with pundits calling it a “sledgehammer to freedom”.

The concern was not unjustified since it was predicted that Carbon intensive industry would simply be undercut by foreign interests able to offer more competitive energy rates to consumers.

However with international cooperation now being actively encouraged, the attraction and probability of price gouging between domestic and international firms is likely to reduce.

The price is right

Alongside the proposed price rise has emerged a surge of concern that, while ambitious, the UK will fall behind on its own national targets unless an even higher charge is established.

The IETA’s forecast would mean an increase on the €27 price that was in effect from June 2018-19 however, think-tank Carbon Tracker believes this would still fall short of the targets stipulated in the UK’s Green New Deal.

A report released by the Zero Carbon Commission has estimated that the IETA’s price would need to be increased by almost 100% to €60 by 2025 to stay within established carbon budgets.

“We need to introduce a stronger, more consistent carbon price signal across more sectors of the economy if we want to accelerate the transition to a low-carbon economy.”

Sam Fankhauser

Assuming that Fankhauser’s perspective is adopted in the UK, carbon allowance trading promises to become a lucrative venture for firms that are able to significantly reduce their carbon emissions ahead of time. Any shortfall between emissions and allowance could be traded with more carbon intensive firms, thereby effectively doubling the value of carbon emissions saved.

Intelligent utility management, on-site generation and smart procurement are all methods to increase the gap between emissions and allowance and, subsequently, its potential value in cap and trade. EIC offers all of these services as well as over forty years of direct experience in integrating and applying them to the benefit of its clients.

Pause for thought: CCA extension consultation closes

Following the closure of the government’s consultation on reforms and an extension to the CCA scheme on Thursday, EIC explores the success of the scheme so far and the opportunity that this extension presents to business leaders.

Laying a foundation

During the Spring Budget announcement, Chancellor Sunak made it clear that while the economy would be strained during and after lockdown, its recovery could not come at the expense of UK climate goals.

Little over a month after the budget announcement, the Department for Business, Energy and Industrial Strategy (BEIS) proposed an extension to the Climate Change Agreements (CCA) scheme.

No doubt, this move was designed to engage with businesses that already fit the criteria of the scheme but were unable to join it previously and in doing so allow them to benefit from the reduced CCL cost and the environment to benefit from reduced carbon emissions.

2017 saw the Government aim its sights at a 20% improvement in commercial and industrial energy efficiency by 2030, this goal has informed the consultation with that target being upheld in regards to the extension.

The popularity and effectiveness of the scheme are undeniable, with recent analyses demonstrating that 80-100% of businesses were participating in most eligible sectors.

A consensus of this magnitude inspires hope for the UK’s climate goals, given that, of the UK’s total greenhouse gas emissions, 25% are business driven. An evaluation for the 2017 Clean Growth Strategy also showed that up to 22m tonnes of CO2 could be saved through investments in energy efficiency technology.

An open forum

The BEIS has made clear that facilities that do meet the current criteria would now be able to join the scheme for the first time since its initial closure in October 2018.

The Target Period being proposed, in addition to remaining in line with periods 1-4 of the scheme (running from the 1st January 2021 until 31st December 2022), will be supported by a variation of the certification period. Initially planned to end in March 2023, it would be pushed back to June of the same year to allow participants to gain certification for CCL discounts between April and June 2023. The added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

The CCA’s closing in 2018 had shut out new entrants to the scheme; however, businesses fitting the eligibility now have an opportunity to recoup up to 92% on electricity and 83% on gas CCL charges.

Applications to the CCA can be long-winded and complex, however the return on an initial investment of time is huge, especially considering that an average energy intensive business the added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

Based on these figures, the opportunity presented by Sunak and the BEIS has the potential to dramatically change the landscape of the UK energy industry post COVID-19. Alongside legislation like ESOS, MEES and SECR, the CCA calls for expertise rather than direct action. EIC oversees the entire CCA application process and subsequent management of the service following approval of the application. We will be able to show the fiscal savings based on individual business’s energy consumption and ROI against our typical fees.

Moreover, EIC offers a comprehensive range of compliance services as well as ancillary strategies that can help improve your carbon profile while reducing utility costs.

 

COP26’s race to zero begins

EIC highlights the key points made in COP26 President Alok Sharma’s speech, which symbolised the beginning of the organisations ‘Race to Zero’ campaign, and how business leaders can take a poll position despite the starting gun having already been fired.

Mapping the future

News that the UK will postpone its hosting of the UN climate change conference (COP26) was not unexpected, given the necessity for social distancing that COVID-19 has imposed, however it did raise concerns over the UK’s determination to enact a green recovery post-lockdown.

While the UK track record may, in part, justify some of these concerns, individual safety is not the only benefit of such a delay to talks, for one the nations taking part will need a clear idea of the state of their respective economies once lockdown ends before committing to new policy. 

And from a psychological perspective it might be argued that due to the all-consuming nature of the pandemic when it comes to public and government attention, the conference would not receive the attention necessary if it went ahead this year.

How far we’ve come

Despite the conference now being slated for Q4 2021 (-12 November), Alok Sharma gave a speech last Friday that reasserted the UK’s ambitions and responsibilities with regards to the 2050 net zero target and how the race to zero was already hastening its completion.

The UK, in collaboration with Chile and the U.N., are already leaders of the Climate Ambition Alliance – representing over half of global GDP – however Sharma insisted in his speech that “…we must go further”.

Sharma outlined some of the UK’s major achievements in reducing carbon emissions in the last thirty years:

  • Since 1990 the UK economy has grown by 75% while simultaneously reducing carbon emissions by 43%
  • In the same time, the UK has two offshore wind turbines able to power 2,000 homes, as of 2020 the UK is leading nation for offshore wind capacity
  • Globally, the cost of solar and wind power have dropped by 85% and 49% respectively
  • Over two thirds of the worlds nations can now generate renewable energy cheaper than coal

While details of the path forward remain scant – not surprising given the reasons for postponement – Sharma made it clear that liberating capital to fund green initiatives and widespread support for electric vehicles would be crucial to the UNFCCC’s success.

Approximately 1,000 business leaders, representing revenue totalling in excess £3.5tn have committed to the scheme including British motor giant Rolls Royce. According to the United Nations Framework Convention on Climate Change UNFCCC, around 75% of these businesses have already developed strategies and targets aligned with the 2050 target.

Dr. Alison Doig, international lead at the ECIU (Energy & Climate Intelligence Unit) recently commented on the danger of complacency in the opening stages of such a race. 

“This is not, however, about pushing climate action to some date in the future; no entity can reach net-zero in 2050 without starting now… participants will have to present delivery plans, including setting interim targets for the next decade, by the time COP26 opens in Glasgow next year.”

Clean energy was the first element of the British economy that Sharma cited when referring to the need for green growth after lockdown, making it a pressing issue for business leaders looking to get a head start on net zero. EIC provides comprehensive  support and advice to businesses in the procurement, management and generation of alternative energy sources. Each service forms an element of the robust energy management service that EIC offers.