Access to clean electricity is becoming increasingly important for UK businesses. Onsite generation can provide a source of clean energy, whilst also protecting firms from supply chain disruptions and market changes. We break down the major benefits of generating your own electricity, as well as the advantages it will grant businesses on the road to net zero.
Onsite generation: What do you have to gain?
The immediate boons of onsite generation fall under three categories: energy security, increased flexibility, and a heightened reputation for corporate social responsibility.
Energy security can be defined in two ways; the first is the physical security of the resource reaching your business from supply. Fortunately, UK supplies are relatively undisturbed by inclement weather conditions compared with other regions of the world. Despite this, any total loss of energy – no matter how brief – can be costly. This can be avoided by having a safeguard like onsite generation in place.
The second security threat refers more to the commercial landscape than the physical one. Energy wholesale contract prices are subject to change at the best of times. Depending on a variety of factors like peak demand times, supply chain disruption, or, in the case of big oil earlier this year, complete loss of demand.
2018 was a stark example of how sudden and dramatic these price changes can be. In just a six-month period, between March and September, winter electricity contract prices increased by over 40%.
The fact is that the majority of this price hike was due to non-commodity costs like transmission and distribution. These are practically absent when generating onsite, meaning you are less at the mercy of market changes.
As with supply security, onsite generation gives you greater control over all aspects of your energy usage. You can scale back your reliance on the grid during high-generation days and, when combined with your own battery storage, even remove your dependence on the grid completely. In a way this gives you the best of both worlds. It removes your attachment to swings in the market but allows you to use the grid as a safety net for low-generation periods.
UK manufacturing has already seen huge gains by combining generation and battery storage technology. A 2018 report from CBS indicated that this sector alone could save over £500m annually by adopting such systems.
Installing your own generation equipment also makes it easier to scale and budget your energy needs as your business grows. Moreover, it improves the value of your business real estate by turning passive roof space into an asset.
Improve your green reputation
Corporate social responsibility is climbing the priorities list of commercial businesses. Onsite energy generation is an excellent way to demonstrate your commitment to reducing your carbon footprint. It also shows your allegiance with a growing section of the energy industry – one that will be centre stage for the global fight against climate change.
Additionally, most UK firms will be required to uphold TCFD standards of reporting the potential risks climate change poses to their functionality. Potential investors will feel confident knowing that you are not only bolstering your own energy supply but actively reducing your contribution to climate change.
Finally, your customers will thank you and new customers will seek you out for reflecting their values. Research conducted in 2020 showed that out of 10,000 global respondents, 50% say they only buy products from brands that ‘try to be eco-friendly’.
Beginning onsite generation and other considerations
At EIC, we provide guidance on the installation and integration of onsite generation into your business model. We recognise the value of such technologies in isolation. However, we also believe that parallel technology working in tandem can release even greater returns for you.
As such, alongside battery storage and onsite generation options we also offer intelligent energy management services. After all, it would be a shame to make savings from your own energy generation and then lose them to inefficiency. To find out more about these services and how they can work for you, get in touch.