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OPINION: EU carbon market in the crossfire of the energy crisis and legislative changes

By Riham Wahba, Market Analyst at Vertis Environmental Finance
The EU ETS, covering Europe’s carbon-intensive industries, establishes emission reduction targets for more than 11,000 installations. Such entities were responsible for more than 1.3 billion tons of CO2 emissions in 2021.
Besides these companies, in 2018, the European Commission opened the market to financial entities; hence, EUAs (in practice, a “permit” to emit 1 ton of CO2) shared some traits with financial derivatives. However, the allowances have always had more in common with energy commodities than traditional financial instruments. The move, nevertheless, improved the carbon market’s liquidity and sent a stronger price signal to those covered by the system.
Carbon prices in Europe on a roller coaster ride
EUAs experienced a steep price increase, initially driven by its market reform, that later turned into a surge following the covid market turmoil in 2020. On March 18th, 2020, as lockdowns phased out across continental Europe, the price of one ton of CO2 tumbled to as low as €15. Since then, the price curve has only been trending upward. Reaching almost €100 in February 2022, a more than significant 554% increase compared to March 2020.
All market participants anticipated a carbon price of €100 by the end of the compliance cycle in April 2022. It took a war for the price to descend from highs to as low as €55 beginning March 2022. The Inflationary pressure from rising energy prices in the repercussions of the war created a demand-destruction paradox that may or may not prove correct in the long term.
The War in Ukraine and subsequent concerns over shortages had a knock-on effect on industries in Europe. Businesses fretted about the higher cost of inputs, supply chain disruptions, and consumers’ Incomes diminishing purchase power due to the high inflation rate of 8.1% in May.
Impact on the industry and energy production
Volatility continued to grip energy commodities and, by extension, carbon futures as the EU approved several sanctions against Russia. Gas has been red-hot as traders feared supply cuts from Russia in retaliation of European sanctions. The benchmark Dutch TTF gas contract reached an all-time high above €200/MWh in March, and German baseload power neared €500/MWh.
Companies covered by the EU ETS have struggled with these rapidly rising gas and electricity prices, especially in the Mediterranean countries of the EU, Romania and the Netherlands, where the excessive financial burden has taken some companies to bankruptcy or activity suspension. For businesses, it is a real challenge to decarbonize their processes in this economic environment, but just as with Darwin theory, those companies that can adapt the better to the new energy landscape are the ones that will move forward, but at least in the short term they will do it at the expense funnel down their costs increase to end consumers, exacerbating- even further- the cost of living.
The energy transition is not on hold
In some cases, business leaders are well ahead of politicians in term of the environmental ambition of their companies. At the beginning of May, in an open letter signed by 140 CEOs of some of Europe’s largest companies, the Commission was urged to meet the Green Deal targets and increase renewable energy capacity in Europe. The war has not delayed the achievement of these objectives. Rather, it served as a wake-up call for those responsible. Last year’s ‘Fit for 55’ package proposals would have reduced gas demand by 100 bcm.
Now, the REPowerEU proposal aims to reduce consumption by 155 bcm, which is equivalent to imports from Russia in 2021. Financing these plans is, of course, a challenge. Still, the European Commission has developed a detailed strategy which includes, for example, raising EUR 20 billion from auctioning allowances from the market stability reserve, and this must be done without disrupting the proper functioning of the carbon market.
What is coming next?
For the Fit for 55 proposals to become binding law, the EU Council and the Parliament (EP) should adopt the legislative proposal either in its original form or amended.
The European Parliament has largely deemed the Commission’s proposal to lack ambition and came up with counter proposals that aim to tighten the system further. In a surprise vote during June 8th plenary, the Conservatives, Social Democrats, and Greens reverted the EU ETS reform report by Peter Liese to the ENVI Committee. MEPs bout over the cap reduction and the pace of phasing out free allowances to industries. The rejected amendments have no legislative standing but offer a glimpse into different parties’ leaning in the EP.
The ENVI Committee had a procedural vote on June 14th, which ensured that the line-by-line amendment votes carried out during the last session would be voted on again in the next plenary session scheduled for June 22nd and 23rd. Negotiations between MEPs on the reforms will be informal until the ballot date.
Unlike the Parliament, the Council seems to side with the Commission’s initial proposals for the carbon market. France, the current holder of the EU rotating presidency, asked national governments to endorse key parameters of the EU ETS overhaul that the EU Commission proposed. It also requested environment ministers to agree on a common position at their meeting on June 28th. Similar calls emerged from other ten member states, including Germany, Spain and the Netherlands. The countries called the bloc nations against watering down the climate and energy plan.
The final shape of the system overhaul will be decided on in trialogue talks involving the European Council, Commission, and Parliament, most probably after the summer recess. The clock to cut the dependence on Russian fuels is ticking, with energy prices hitting the industry and consumers’ pockets.
The energy transition is not only necessary but -even more- urgent.

UK ranks among most successful countries for CO2 reductions

The United Kingdom is one of the few countries that managed to actually reduce its CO2 emissions in the last 60 years.
The report by Utility Bidder analyses various countries’ emissions from 1959 and 2019, to reveal who has made the most cuts to their emissions, and predict who will be the worst offenders for co2 emissions in 2032.
Top five countries that have cut emissions the most

Rank

Country

1959 emissions (MtCO2)

2019 emissions (MtCO2)

Annual change

Estimated 2032 emissions (MtCO2)

1

Curaçao

11.0

3.7

-1.78%

2.8

2

Moldova

11.0

7.3

-0.66%

6.7

3

the United Kingdom

545.9

370.1

-0.64%

339.5

4

Ukraine

256.5

223.5

-0.23%

217.0

5

Germany

754.8

703.5

-0.12%

692.9

Only five of the 93 nations saw their emissions decrease in the last 60 years, with the Caribbean island of Curaçao achieving the biggest decrease at -1.78% per year.
Moldova’s emissions have fallen by an average of 0.66% over the last 60 years. if they continue to do so at the same rate, they’ll have fallen to 6.7 MtCO2 by 2032.
Whilst still being one of the countries with the highest emissions, the UK has seen its emissions fall in the last 60 years, from 545.9 MtCO2 in 1959 to 370.1 MtCO2 in 2019.
The countries with the biggest emissions increase 

Rank

Country

1959 emissions (MtCO2)

2019 emissions (MtCO2)

Annual change

Estimated 2032 emissions (MtCO2)

1

Saudi Arabia

3.7

582.6

8.66%

1,238.8

2

Thailand

3.7

289.5

7.43%

568.9

3

Malaysia

3.7

249.2

7.16%

481.1
Saudi Arabia’s emissions grew by  578.9 MtCO2 over the last 60 years, and the annual change is estimated at 8.66%. This increase is expected given the country’s role as the leader in the world’s petroleum industry.
Thailand Increased its emissions by 285.8 MtCO2 since 1959, so it could hit 568.9 MtCO2 by 2032. It is largely due to the simultaneous economy and population growth that the country experienced over the last 60 years.
Malaysia Increased its emissions by 245.5 MtCO2, meaning it could hit 481.1 MtCO2 by 2032.
Further findings: 
The countries with the lowest estimated 2032 emissions:
  • As well as being the country that has cut its emissions the most since 1959, Curaçao is also the nation that has the lowest predicted emissions by 2032, at just 2.8 MtCO2.

  • Democratic Republic of the Congo is at the second-lowest estimated emissions, reaching 3.7 MtCO2 by 2032. The DRC is also home to the second-largest tropical rainforest in the world, which acts as a carbon sink.

  • Moldova has the third-lowest estimated emissions for 2032, with 6.7 MtCO2.

Clarity, consistency, and confidence needed to deliver Net Zero

2021 was an eventful year for anyone working in the sustainable energy sector, with the Government publishing a whole host of policies and strategies, including the long-awaited Heat and Buildings Strategy. There is no question about how much the Strategy was needed; 17% of carbon emissions from heating buildings in 2019 came from homes. That’s comparable to the total emissions from all petrol and diesel cars. Long-term vision is what we have all been waiting for in the hope that it will result in actions being taken to reverse the tide. But does the sector have what it needs to deliver net zero?

Now that we have had the strategy for some time, Jade Lewis (pictured, right), Chief Executive at the Sustainable Energy Association (SEA), has taken the chance to explore what questions and policy gaps remain for our industry, and here is what we found…

CLARITY

Clarity is important. We need roadmaps, dates, and certainty from government to provide a clear direction of travel, set out over the long term. That’s how businesses justify investments, prioritise certain product lines and decommission others. To put this into perspective, the Heat and Building Strategy was originally due in August 2020, and yet the lack of clarity caused by its delay made it all too easy for our industry to lose focus and hold off on investing in much needed capacity building and innovation.

Due to lack of clarity, the questions around how we will engage the ‘able-to-pay’ sector, which makes up 60% of our consumer market, also remain unanswered. In essence, we need direction on how we can work together to transition those who are able-to-pay to willing-to-pay. But this is by no means a new question. It’s one which has challenged the industry for years, and one the SEA tackled again in our 2020 report, ‘Addressing the Able to Pay Sector’.  Yet, we are still waiting for intervention from the Government.

We have seen numerous policies published over the decade, some of which are now well established, like the Energy Company Obligation (ECO), whereas others have fallen prey to cutbacks. It’s so crucial that we get timings right. Without clarity and stability, the industry can become entrenched with rumours about what policies could be ‘cancelled’ or what may or may not be ‘delayed’. As an organisation, the SEA is in a good position to filter out rumours we know to be incorrect due to our policy insight. However, such uncertainty can stifle much-needed investments from more isolated organisations and SMEs.

CONSISTENCY 

Over past years we have seen many policies and schemes launched and then cut short before the industry has had an opportunity to mobilise to deliver. We have seen various funding schemes aimed at supporting different technologies such as PV, renewable heating, biomass, etc., and now heat pumps are very much on the Government agenda. Investigations, set out in our report ‘Designing an Effective Home Upgrade Grant Scheme’, found that short-term funding terminated at the last minute distorts the market, with ‘stop-start’ funding decimating the number of installers in the market. A long-term guarantee instead instils confidence in industry to enable upskilling, product development, service offering, and innovation in the market. To frame this in our current time, we can look at the Boiler Upgrade Scheme due to begin in April this year. But how do we move from 30,000 heat pump installations a year to 600,000 a year from 2028 when there is a general reluctance to fully commit? This hesitation is easy to understand. Previous policies such as the Green Deal, and more recently the Green Homes Grant, have been withdrawn after companies had spent valuable time and resources to prepare to play their part in the delivery.

CONFIDENCE

Finally, and most importantly, we need confidence. Because of the lack of clarity and consistency, the industry lacks the confidence it needs to justify investment in the necessary capacity, resources, and training. Research carried out by the University of Sussex into why heat pumps are so widely adopted in places like Finland found that it is the long-term policy environment that supports business investments and individuals to choose a career in the low carbon heating industry. We need existing installers to retrain and newcomers to commit to a path – this isn’t just about business investment, but time and personal investment. A show of faith and steadfast direction will go a long way to reassure installers, who are the backbone of our industry, that they have made the right decision and have an important role to play in our transition to net zero. We know that many installers have informed local authorities that they have no appetite for future government schemes, so providing reassurance will be a challenge. It has also been suggested that the rollout of short-term policies into an immature market has increased installation costs for eligible measures.

CONCLUSION

Whilst we welcome the Heat and Buildings Strategy, we can appreciate the magnitude of the challenge before us. We are seeing the beginnings of a momentum that will change the way we do things in the energy and the construction sectors for decades to come. Provided we as an industry seek to work collaboratively with the Government to address the questions surrounding clarity, consistency, and confidence, we believe that we will be on the right path towards a just and efficient transition to Net-Zero.

VINCI targets 40% carbon emissions reduction with electric fleet

VINCI Construction UK has accelerated its drive towards its target of 40% reduction in carbon emissions with the delivery of its first tranche of Polestar 2s.

Six cars were delivered to the VINCI plc headquarters in Watford and another seven are on order. This batch of Polestars is for the senior team, who it says are leading by example. The company says the electric vehicles are just a small part of its wider environmental strategy that is advocating a switch to EVs where it is suitable.

VINCI is inviting all employees to make the transition to zero carbon transport and provides an EV option at every grade of company car allowance across the business. Anyone can make the switch provided they can park their new car off road at their home address for ease of charging and undertake less than 40,000 km (or 25,000 miles) on the road each year. Vehicles are available to VINCI drivers with a range from the Polestar through to a Vauxhall Corsa.

Last week saw colleagues from VINCI’s building, facilities management and civil engineering teams take deliveries – the company believes there might be as many as 100 EVs delivered to the business by the first quarter of 2021. The Polestar 2, chosen by senior teams, has a WLTP (Worldwide Harmonised Light-vehicle Test Procedure) range of 292 miles with a 78-kwh dual motor and is four-wheel drive.

VINCI Construction UK is working with Actemium, part of VINCI Energies, to install fast chargers to its offices and Pod Point have been installing home charging points for our employees at home. The next step is to target the commercial vehicle fleet, something that VINCI Facilities and the VINCI Fleet department is already researching and investing in.

Building Management

Carbon Trust: Heat pumps key to London’s net zero ambition

A new report from the Carbon Trust says heat pumps will have a critical role in tackling emissions from London’s buildings and delivering the Mayor’s 2030 net zero ambitions.

The report, commissioned by the Mayor of London, includes detailed analysis of the potential to retrofit heat pumps across a range of existing buildings in London and recommends an action plan for scaling up energy efficiency and heat pump retrofit across the capital.

The report will help guide local authorities, social housing providers and others considering a heat pump retrofit, highlighting the principles of good practice system design.

The Carbon Trust says decarbonising heat is London’s biggest challenge to achieving net zero emissions. Natural gas, used mainly for heating buildings and water, accounts for 37% of all greenhouse gas emissions in London. To achieve the Mayor’s net zero target by 2030, London will need to make a rapid transition from gas to low carbon heat solutions, the majority of which will be retrofitted into existing buildings, as at least 80% of buildings are expected to still be standing in 2050.

Heat pump systems have the potential to deliver immediate carbon emission savings of 60-70% compared to conventional electric heating and 55-65% when compared to an efficient gas boiler. As the grid decarbonises further in coming decades these carbon savings are expected to increase to 90-100% of carbon emissions by 2050.

However, heat pumps are not a like-for-like replacement for gas boilers and good practice system design will be essential to their effective deployment. The report contains guidance for building owners on the technical options for installation and the principles of good practice system design in heat pump retrofit.

Additionally, a prerequisite for the roll out of heat pumps in many buildings will be improved thermal energy efficiency, which is likely to require significant investment from central government, alongside investment and co-ordination with local authorities and the private sector. Retrofitting energy efficiency measures, combined with heat pumps, provides multiple benefits including reducing energy bills, and enabling the heat pump to operate more efficiently.

Heat pumps also allow building occupants to flex their heat demand in response to tariff price signals and other payments for demand side response. The report finds that engaging in demand side response and flexibility markets is hugely beneficial to the financial case for heat pump retrofit, as well as enabling overall grid resilience.

The report concludes that most building types will require further financial support to transition from gas boilers. However, some building types, such as electrically heated blocks of flats and buildings that are due for major upgrades to the building fabric or heating systems, already have strong financial cases for heat pumps, and should be prioritised for retrofit and energy efficiency investment.

Building Management

Net Zero Carbon Buildings Commitment gains 100 signatories

Five more companies have joined the Net Zero Carbon Buildings Commitment, bringing the total number of signatories to 100 and doubling participation in the programme in just over a year.

Since inception, the businesses and organisations signed up to the Commitment, created by the World Green Building Council (WorldGBC), now cover nearly 6,000 assets, over 32 million m2 total floor area and $100 billion in annual turnover.

This means that the operational portfolio emissions of these signatories will be at net zero by 2030, affecting approximately 3.4 million tonnes of CO2 (tCO2e).

WorldGBC is now calling for governments to #ActOnClimate as part of the 11th annual World Green Building Week event, happening 21 to 25 September 2020.

The signatories range from small and medium enterprises to large, multi-national corporations, and span engineering, design and consultancy services to real estate owners and manufacturing.

The latest signatories are Mott MacDonald, QIC Global Real Estate (QIC), United Metal Coating LLC, Bioconstrucción y Energía Alternativa and Tritax Big Box.

For these five signatories, the Commitment is one of three pathways to become a member of EP100 fromThe Climate Group, a global initiative for energy-smart companies doing more with less energy.

“Achieving this milestone, in less than two years since the launch, demonstrates the growing importance of net zero carbon buildings to governments, businesses and mayors”, said Cristina Gamboa, CEO, World Green Building Council. “As countries look to recover from the economic impacts of COVID-19, there is an opportunity for net zero buildings to provide benefits for people, the planet and economies. By positioning net zero carbon buildings at the core of these recovery efforts, governments and policymakers can harness the incredible potential of net zero buildings to build back better and enable a green recovery.

“I congratulate our new signatories on their commitment and for demonstrating the level of ambition and leadership required by both public and private sector actors going forward.”

The new companies and organisations are committed to ensuring that all assets they own, occupy and/or develop under their direct control will operate at net zero carbon by 2030, or earlier.

The Commitment is unique in positioning energy efficiency as a central component to achieving decarbonisation across global portfolios, in addition to generating and procuring renewable energy to meet reduced energy demand. This represents the most cost-effective, best-practice approach to ensuring buildings are fit for purpose, future-proofed against climate impacts, and able to provide healthy and comfortable environments.

The Climate Group’s Corporate Partnerships Director, Mike Peirce said: “Congratulations to World Green Building Council on passing this exciting milestone. Faster business and government action to clean up the built environment is critical to achieving net zero emissions by 2050. We applaud all of the signatories leading by example and welcome the latest EP100 members. Smarter energy use will help them achieve net zero carbon buildings and generate substantial financial savings annually — it’s no wonder more and more companies are seizing this huge business opportunity.”

The full list of the Commitment signatories comprises 68 businesses and organisations including developers, real estate investment and property funds, manufacturers and global design firms, 28 cities including London, New York and Tokyo, and six states and regions including California and Scotland.

Businesses, governments, organisations and individuals are encouraged to sign the World Green Building Week’s Call to Action Statement which is intended to galvanise governments to take urgent action for the decarbonisation of buildings. More information on the week, can be found at www.worldgbc.org/worldgreenbuildingweek.

Open Innovation Levels Framework published by UKGBC

The UK Green Building Council (UKGBC) and Sustainable Ventures (SV) have published the Open Innovation Levels Framework, a resource aimed at enabling open innovation with the goal of reducing the climate impacts of the built environment.

The organisations say 40% of UK carbon emissions are attributable to the built environment, which requires significant innovation to reduce its impact. Recent research shows that, in London, innovation is the most frequently identified soft skill required to respond to recent trends in the built environment, with the same research identifying the most significant trend being the climate crisis.

As part of a project to accelerate open innovation, funded by EIT Climate-KIC, UKGBC and SV carried out interviews, desktop research and workshops with innovators and large corporations operating in the built environment sector to identify the needs and barriers currently preventing significant innovation. This research identified that in many cases the power to overcome barriers to innovation lies with large corporate organisations.

45% of all barriers identified related to corporate culture, including attitude to risk, lack of systems thinking and lack of incentives.

The Framework provides a step-by-step guide on how corporates can engage in open innovation and reach effective solutions. It is divided into 4 key phases – challenge definition, scoping, engagement, and collaboration – each of which are broken down further into 8 levels with associated actions. This shared process creates a common understanding of open innovation between corporates and innovators, increases transparency, and enables more efficient and timely engagements.

Alastair Mant, Head of Business Transformation at UKGBC said: “If the built environment is to play its part in tackling the climate crisis we must radically increase the use of innovative solutions. Many companies throughout the property and construction value chain are setting ambitious carbon reduction commitments and to meet these they must now find new ways to construct and operate buildings and infrastructure. Innovators and start-ups continue to create many of the required concepts, prototypes and even final products, but due to largely cultural issues, take-up of these solutions is too slow. The Open Innovation Levels Framework provides corporates with a step-by-step process for collaborating with start-ups in a way that will lead to greater levels of innovation within their projects and across the industry.

“It is our hope that UKGBC members and other organisation in the built environment find this Framework useful in pursuing innovative solutions to environmental and social impact challenges.”

Charlie Beharrell, Senior Commercial Associate at Sustainable Ventures, added: “Sustainable Venture’s community is thriving with innovators tackling the Built Environment’s climate and sustainability issues, but the sector lags behind in its efforts to nurture these and bring them to market. The framework we have developed with UKGBC will enable corporate entities to better engage with early stage innovation, helping to build new, tailored solutions to facilitate the transition to net zero.”

Sustainable office buildings ‘offer tangible investment benefits’

Sustainable office buildings can deliver tangible investment benefits to investors through a combination of higher rents and stronger leasing velocity.

The Impact of Sustainability on Value report from JLL also reveals growing occupier demand for sustainable offices in central London that will need to be met in the next decade.

JLL has calculated that the next wave of office development and major refurbishment will need to accommodate at least 8.0 m sq ft of highly sustainable demand from occupiers across central London by 2030.

This demand assessment for central London office stock is based on the space currently occupied by companies which have signed up to science-based- targets (12m sq ft) who have lease events before 2030, demonstrating the increasing demand and need for highly sustainable buildings within central London.

The research also identified demand from companies signing up to net zero carbon commitments, who currently occupy over 1.5m sq ft of space across central London.

JLL’s research found that, based on historical leasing activity, the future development and redevelopment pipeline of offices incorporating sustainability would deliver tangible financial benefits for developers in addition to strong levels of demand.

JLL analysed leasing activity for New Grade A office buildings in central London and found that those with a BREEAM rating of very good or higher achieved higher rents than those without a rating and that the average rental premium over non-rated buildings over the last three years was around 8%. The analysis also showed that New Grade A buildings with an A or B EPC rating achieved a rental premium of 10% over comparable offices with lower ratings over the same period.

The research further demonstrated that payback for investors who target higher BREEAM ratings is rewarded with higher occupancy rates throughout the cycle. JLL analysed the leasing velocity of 120 central London development schemes completed between 2013 and 2017 and found that those that have an outstanding/ excellent rating tended to show a higher pace of leasing and have lower vacancy rates – of 7% compared to 20% for those rated very good – 24 months after completion.

Neil Prime, head of central London offices markets and UK office agency at JLL, said: “Our analysis of existing environmental ratings shows that overall sustainable buildings deliver better returns for investors against the benchmarks of void rate, leasing velocity and the rents achieved. This provides the industry with a clear and defined base case to begin to formulate an understanding of how the next generation of sustainable offices – for which there is demonstrable demand – will perform.”

Sophie Walker, UK head of sustainability at JLL, added: “Clearly the urgency to build and redevelop these offices in central London to support corporate environmental and people goals is only speeding up.  The first developers to undertake the task will reap the rewards of high levels of demand and the intrinsic higher performance of their product. This opportunity to provide sustainability as a point of differentiation and to appeal to forward-thinking occupiers will really play out over the next decade.

“Beyond 2030, tougher building regulations will drive a reduction in energy consumption and carbon emissions and mandated sustainability performance will become more defined – this may mean that the premium associated with it will disappear and buildings that don’t comply will underperform, leading to the displacement of tenants and lost rents due to costly retrofits.”

Is NET ZERO possible for heavy gas users?

Achieving NET ZERO emissions is a significant task, made all the more difficult if you use lots of gas for your process (for steam, drying, frying, furnaces etc). Gas is around 5-6x cheaper than grid electricity, so the cost of switching from gas is prohibitive.

This is a challenge I see a lot in all sorts of heat intensive sectors (food manufacturing, glass manufacturing, healthcare, care home etc).  Gas is typically used either for direct combustion or indirectly to produce steam.

In 2008, the electricity grid emitted over 570 g/kWh, and gas is around 180 g/kWh, so gas was “clean”.  In 2019 the grid has reduced to 255 g/kWh, and is tracking down to 130 g/kWh by 2030, with a target of zero by 2050, so gas is becoming seen as “dirty”, as it really hasn’t changed much.

Firstly there are developments happening that may start to decarbonise the grid such as biogas injection and hydrogen injection. You may wish to check how your equipment will run on a mix of gases.  For some it may mean planning to replace or refit equipment.

There are technology alternatives that can be looked at but a lot will depend on the temperature of the heat that you generate using gas just now e.g. furnaces, ovens, steam or hot water.  Also consideration should be given to recovering waste heat and using it to reduce gas consumption.

A relevant consideration is that over 50% of most electricity bills relates to “non-energy” costs.  This is the cost of the grid transformation that is happening including renewables obligations, cost of FITs, use of system charges etc.   If you generate power at your location but can often save a lot of these, which helps bring down the price gap to gas, and reduces the cost of switching.  Also this can enable a different mix of power generation to be considered at the site to re-balance electricity and gas use.

Many of the measures may have a longer payback time though.  How can you do them when the criteria for payback is only, say 2 years ?  This is the reason Onsite Energy Projects exists.  We recognised the challenge of capex availability and can provide a no-capex, off-balance sheet solution to implement both energy efficiency and on-site generation measures.

We may also be able to identify additional improvement measures, and deliver them all without any capex. If you would like to know more email us at info@on-site.energy or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.

Do you have a Net Zero strategy?

The UK has become the first major economy to pass laws requiring all greenhouse gas emissions to be net zero by 2050.  The electricity grid is decarbonising (its carbon intensity has dropped by over 50% since 2011 to where it is today – 254 g CO2 per kWh) and is forecast to drop another 50% by 2030.  Grid costs are rising to pay for this transition.

A key lies in the word “NET” because whilst some businesses will struggle to reduce carbon, others could actually become POSITIVE – e.g. generating excess renewable power.  New business models and revenue streams could emerge though

So what does this mean for YOUR business ?  How do you develop a net zero strategy ?

  1. Significant changes will be needed to the way you do business and use energy.The changes could impact how your employees come to work, how you distribute your products, sell your products, procure your raw materials and use your facilities.  Processes may require to be redesigned and reengineered.  This will mean the ability to embrace change, challenge existing assumptions, innovate and understanding of alternative methods and costs

Businesses should be looking NOW at their own operations and looking for ways to BOTH reduce consumption AND generate their own low carbon power locally in a sustainable way.  Simply buying a green energy tariff is not sufficient. There are many very good long term business benefits by embracing this genuinely, which can become a source of competitive advantage.

For businesses that use a lot of gas, this is going to be particularly challenging. Gas is cheap (5-6 x cheaper than electricity), so changing away from gas will be expensive.

  1. Those changes will have financial costs that may not be affordable within conventional capex constraints.New business models such as energy as a service are increasingly available to help bridge the gap, and enable changes to happen.

NET ZERO WILL REQUIRE NOTHING SHORT OF AN INDUSTRIAL REVOLUTION, with new business models and technology, and all within the next 30 years. 

These are the reasons Onsite Energy Projects exists – we help businesses innovate, reengineer their energy supply chain and implement the full potential of both energy efficiency and on-site generation measures.  We recognised the challenge of capex availability and can provide a no-capex, off-balance sheet, solution to make it all happen.

If you would like to know more email us at info@on-site.energy or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.

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