Future of Energy

How businesses will help deliver the UK’s net zero goals

Posted on 26 June 2019
By Wayne Mitchell
Wayne Mitchell
Director of npower Business Solutions, Energy HQ

Wayne has worked in the energy industry for 20 years, starting as an Analyst for an energy consultancy before moving into business development and pricing for npower Business Solutions. Upon joining the company he focused on strengthening relationships with external consultants, before taking up his current position heading up Energy HQ, which provides energy solutions and risk management services to UK businesses.

With the rest of Europe looking set to follow the UK’s lead to reduce emissions to net zero by 2050, the business community is seeking to clarify what role they will be expected to play in reaching this target.

Many large organisations had already called for the Committee on Climate Change’s recommendations to be adopted, with a group of business leaders representing 190,000 firms, seven million workers and £20-trillion in assets writing to Theresa May at the end of May.

Emissions from energy rising

But despite existing efforts to cut global greenhouse gases, earlier this month BP’s Statistical Review of World Energy reported that emissions from the global energy industry rose at the fastest rate since 2011, increasing 2% in 2018.

This is being attributed to increased demand for fossil-fuel-generated energy in response to extreme weather and surprise swings in global temperatures – both of which are expected to increase.

UK making progress

That said, in the UK, overall emissions are down 2% for 2018, compared to 2017, with a 7% decrease from energy supply, according to provisional figures released by the Department for Business, Energy and Industrial Strategy and National Statistics.

However, business emissions have only reduced by a very small amount over the past year, accounting for 14.7% of the overall total (the same as residential).

In order to meet the 2050 net zero target, businesses will be expected to make “fundamental change to their business models and operating practices,” according to the UK Energy Research Centre (UKERC).

The UKERC says a key part of this will be “technological substitutions” across major sectors such as energy, heating, transport and construction.

But the exact nature and impacts of the transition are “subject to a lot of uncertainty” and companies will need to adopt a “flexible and adaptive approach”.

Uncertainty hampering change

Many of our business customers tell us they want greater certainty over energy policy and regulation, so that any adaptations or investments they make towards reducing emissions can be sustained consistently over the long term.

For example, investment in demand side response (DSR) to support a growing requirement from National Grid and local Distribution Network Operators to balance more decentralised and intermittent low-carbon generation.

The current uncertainty over how transmission and distribution charges will be applied following Ofgem’s Targeted Charging Review (TCR) is causing many plans to be put on hold.

A key role for DSR

Forthcoming amendments to Triad and other time-of-use charging methodology will likely remove many of the incentives for reducing peak demand. This currently saves the UK around 2GW over the winter period, which is the equivalent of the output from a large power station.

But according to Caroline Bragg of the Association for Decentralised Energy, despite the changes, DSR opportunities are set to increase.

“There is still money to be made,” she says. “The key is to be able to understand what these opportunities are and navigate a way through all the changes, either through investing in your own teams or working with partners.” (See our recent blog.) 

But even if businesses would rather not invest in any on-site assets for DSR at the moment, it’s still possible to participate by being flexible around when you consume.

Visibility of consumption key

Having a better understanding of consumption itself is also key to saving energy.

This can be achieved by sub-metering, to provide visibility of exactly how, where and when energy is being consumed.

Linking this to an intelligent energy management system then allows that data to be tracked and analysed. That way, savings can be more easily identified and implemented.

Small actions add up

“Remember that many small actions add up to a whole lot of impact,” writes Gudrun Cartwright, Environment Director at Business in the Community, in edie this month.

We certainly find that better understanding consumption combined with an energy efficiency audit can identify multiple ways to cut emissions. And collectively, these can typically reduce a business’s consumption (and bills) by between 10-20% – and sometimes considerably more.

Adopting an international standard for energy management best practice such as ISO 50001 is another effective way to support ongoing consumption reduction.

ISO 50001 offers huge potential

According to the Clean Energy Ministerial (CEM) – which is a group of global leaders from 23 countries that collectively account for 90% of the world’s clean energy investments and 75% of its emissions – if ISO 50001 was adopted on a global scale, it could reduce carbon emissions by 6,500 metric tonnes and save more than $600bn in energy costs.

But whatever your business does, having an informed and robust strategy that incorporates all aspects of effective energy management is key. That way you’re better placed to drive down emissions, consumption and cost – and support the UK’s net zero target by 2050.

If you need support, advice or inspiration, our Energy HQ team of energy management and DSR experts can help. You can contact them on 0800 193 6866 or send an email to EnergyHQ@npower.com.

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