Ben Spry, Head of Flexibility Services, npower Business Solutions, Energy HQ.
The host of challenges surrounding climate change and the future of energy exist at such a global scale and involve so many stakeholders, it can be tempting to think that any meaningful change can only be achieved at a macro level and with landmark policy changes, such as the 2015 Paris Agreement. In this context, it can seem like energy managers – responsible only for one organisation – can have little impact.
Yet, when you consider the amount of global energy use that is made up by institutional organisations it’s clear that the combined energy manager community has both a significant impact and responsibility to help to achieve these goals.
As we approach the United Nations’ Climate Action Summit on 23rd September, it is important for energy managers to ask themselves what action they can take to ensure their organisations help meet the relevant Sustainable Development Goals. That is, achieving universal access to affordable and clean energy and climate action.
With this in mind, here are the three most crucial things I believe energy managers should be doing to help achieve these goals:
1. Supporting growth in renewables
The ability for energy managers to determine how much of their organisation’s energy consumption comes from renewables goes beyond just their choice of energy provider. They can also lead the charge with their own initiatives.
Firstly, they can invest in renewables directly with onsite generation. While wind power is a viable option in only some cases, installing rooftop solar panels on buildings can be done relatively easily and often is a low-risk, competitive business case.
Accelerated by the UK Government’s target to reach net-zero emissions by 2050, many local authorities have set in place sustainable objectives to help reduce their carbon emissions. To help West Sussex County Council (WSCC) meet this commitment, the team at npower Business Solutions, Energy HQ, worked closely with WSCC to develop a business case for co-locating a 4MW/4MWh Lithium-ion battery with a 7.4MW solar PV array at one of its disused landfill sites at Westhampnett, near Chichester. Though this was a big investment for WSCC, it not only spurred them towards their goal of becoming more sustainable, but the energy generating and storage capacity of the combined pieces of infrastructure reduced the local authority’s energy costs and justified itself over time.
Secondly, organisations can ensure that a portion of their energy is being generated from carbon-free sources in a less direct way, through Power Purchasing Agreements (PPAs). These allow companies to provide support for renewable projects, such as an off-shore wind farm, by committing to purchase energy from that generator at a given price. This helps decarbonise the UK fuel mix and provides a more structured and secure way for an organisation to know for certain that a percentage of their energy is coming from renewable sources.
2. Making demand meet supply
Energy managers also need to play their part to help ensure the stability of the energy grid as it supports ever greater levels of renewable energy generation. Indeed, energy generated from the sun, wind and other carbon-free sources fluctuates in ways that may not match changing demand across the grid, putting the entire network under strain.
Therefore, in a low-carbon world, when supply may not always meet demand, it follows that measures must be taken to make energy demand meet supply. This means that businesses must look to proactively manage their consumption, particularly if they are large consumers.
This is where Demand-Side Response (DSR) comes in. By limiting energy use in peak hours, businesses can help alleviate the pressure the grid faces, giving National Grid more flexibility to balance periods of stress on the electricity system. In turn, this decreases the need to rely on standby generation, which is often from high-carbon sources.
Indeed, DSR capacity is certainly increasing, which could have a profoundly positive impact on the environment. The Association for Decentralised Energy estimates that around 9.8GW of potential DSR capacity could be delivered by the industrial and commercial sector by 2020. That’s the equivalent of having three new Hinkley Point nuclear power stations (and is significantly cheaper that the £19.6bn and rising cost of building just one).
And for doing their bit to support the stability of the grid, energy managers can also deliver significant cost-savings benefits for their organisations through DSR and selling surplus energy back to the grid. From our experience, customers can generate between £65k and £120k per megawatt a year from our range of DSR services.
Onsite battery story can greater increase the potential benefits of DSR, by allowing organisations store greater amounts of excess energy which can then be sold back to the grid as and when they choose. Furthermore, alongside onsite generators, battery storage can serve as a useful asset that enhance an organisation’s energy resilience. In the even of a power outage, like the one in August that caused widespread disruption across the UK, organisations can switch to their own source of power to continue day-to-day business and mitigate the risk of this threat.
3. Looking at your entire supply chain
Often energy managers think the remit of their role only applies to their immediate organisation. However, if a business wants to be truly sustainable and reduce the environmental impact of all its operations, it’s not just about what they do; energy managers must also consider the practices of their company’s suppliers.
Indeed, a company may have the most efficient energy consumption in the world, but if they have a large and complex supply chain across many product lines, then their own energy use may only make up a fraction of their true energy consumption.
However, achieving energy efficiency across all the facets of an organisation’s supply chain can appear like a seemingly insurmountable task for energy managers. Given the distance between them and their suppliers, it is very difficult for managers to gain an intimate understanding of how environmental their suppliers are, let alone to get them to adopt more energy-efficient practices.
What then can energy managers do when so much seems out of their control? In the first instance, and most crucially, they can make having good environmental practices a key criterion when issuing a new tender. By putting a clear emphasis on environmental credentials – and not just price – during the tender process, it means that right from the outset they can filter out third-parties that do not share their commitment to sustainability.
Organisations should also play an active role in encouraging and helping their suppliers be more environmentally friendly. For example, one of our clients, McDonald’s, we help one of our clients hold an annual conference that brings together their suppliers so they can share best practices on ways to drive energy efficiency.
Beyond this, energy managers should also profile energy initiatives that are focused on their supply chain as part of their CSR campaign. This will help drive awareness of this too often overlooked aspect of energy consumption and encourage other companies to consider energy use across their entire supply chain.
Too often energy mangers face a series of internal pressures, emphasising the importance of achieving cost-savings above all else, which can make it difficult to get internal stakeholders to take a long-term view and to see the advantages of investing in these initiatives. However, energy managers have a collective responsibility to push for the adoption of environmental best practices and to make the business case for their organisations to endeavour to be more sustainable. https://www.energy-hq.co.uk/