Thursday, November 30, 2023

The route to net zero: five upcoming trends for 2024

Kam Singh

Kam Singh, director of carbon solutions, EMCOR UK

As we approach 2024, organisations will require long-term, legitimate decarbonisation plans to meet their 2030 net zero goals. The built environment currently contributes 40 per cent of the country’s total carbon footprint. The way energy is purchased, used, supplied, and reported will need to be comprehensively addressed to reduce this figure.

Here are five key trends that I see shaping the year ahead.

  1. Strategic energy price risk management

Recent global events have caused much volatility in the energy pricing markets. Unfortunately, the elevated prices that we see as a result of this instability could easily become the new normal. Organisations should now ensure that they manage energy price risk much in the same way as other business risks, and ensure that they have rolling 3-year views of their energy market positions. 

With the expectation that prices will remain at a higher rate for the foreseeable future, I believe that a better, more strategic approach to long-term energy management is also needed. Developing strategic energy management projects informed by knowledge of detailed energy profiles could help smooth out some of the price shocks, open the door to renewable energy options through on-site generation, and ultimately reduce emissions.

  1. Legitimise carbon offset schemes

Simple certification for carbon offset schemes will no longer be enough as many third-party carbon reduction schemes have been increasingly called into question in recent years.

Renewable Energy Guarantees of Origin (REGOs) may offer net zero certification, however, there are questions around the potential over-allocation of these against the actual amount of REGO backed electricity available in the market. This brings the credibility of the scheme into question.

As companies move to longer-term energy pricing/procurement plans, the legitimacy of their net zero claims can improve through Power Purchase Agreements (PPAs). PPAs establish proof of direct collaboration between renewable energy providers and their clients.

Rather than offloading carbon onto third party projects, PPAs mean that an organisation can evidence, for example, that it receives 30 per cent of its renewable energy from a specific wind farm. PPAs will consequently provide long-term, financially stable, and best of all ­– authentic – solutions to net zero carbon.

  1. Smart building energy profiles

Energy management also needs better on-the-ground attention, especially for multi-site organisations. In the UK we’ve had half-hourly metered electricity supplies for all sites with a demand exceeding 100kW for almost 30 years. This should allow all businesses to at least review the daily load profiles for their buildings and make informed decisions on energy efficiency.

AI monitoring software, IoT solutions, and predictive technology is providing advanced data management that can be applied at an individual asset level to assess when maintenance is required before it is needed, the efficiently of equipment and if it’s operating in line with demand. I also stress the importance of this due to hybrid working, as offices do not need to run on full occupancy levels and systems should instead be smart enough to respond to different usage patterns.

Sensors can send information to the building controls to adjust how systems are run, to respond to the demand in the building. For example, CO2 sensors can be used to assess building occupancy levels, with the data then being used to adjust all running systems as a result.

  1. Address scope three emissions

Many organisation have a good handle on their Scope 1 & 2 emissions (largely gas/electricity/fuel), but the scope 3 supply chain emissions are a significant issue for most organisations who have committed to net zero.

Reducing the emissions of global supply chains will require cross-organisational collaboration and open communication. Larger organisations who rely on smaller suppliers can help them meet these goals through education and support schemes. For example, collaborations with software providers can be developed, so smaller organisations can more accurately measure their emissions.

  1. Develop ESG frameworks

Finally, all these steps need to be approached in a structured manner. I predict that organisations will increasingly refocus onto Environmental, Social, and Governance (ESG) frameworks. These structures allow businesses to identify specific metrics and develop data-driven improvement plans across all areas.

A good ESG framework should be aligned to  the new requirements of the Corporate Sustainability Reporting Directive (CSRD). The CSRD requires all companies listed and operating within EU regulated markets to meet their sustainability reporting standards.

Make meaningful changes

While these trends could shape carbon reduction in 2024 and the years that follow, if we truly want to hit climate change goals, we must take an even longer-term view. My predictions show how data-driven insight, reporting, and legitimate decarbonisation methods are set to be implemented. This will change how carbon is managed across the built environment for the better, forever.

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