Future of Energy

Steps to Net Zero

Posted on 10 March 2020
By Sam Hollister
Sam Hollister
Director of Economics and Corporate Services, Energy UK

Sam has policy responsibility for Energy UK’s Strategic Policy Committee and New Energy Services and Heat Committee. Sam previously worked in UK government, specialising in better regulation and economic growth, and spent time on secondment at the European Commission at DG Enterprise.

As a sector, energy has been at the very forefront of the UK’s world-leading progress in tackling climate change.

The country’s carbon emissions are at the lowest level since the 1890s, which is largely down to us reaching the point where low-carbon sources supply more than half of our energy generation.

However, there’s no time to stop and celebrate this achievement as we need to go much further and faster. Not just in power generation, but in addressing the carbon emissions resulting from heating, transport – and indeed, across the rest of our economy – if we are to meet Net Zero targets.

 

Putting policies to the test

We need a consistent and concerted effort across the whole of government, which is why Energy UK has called for a ‘net-zero test’ for all new policies to ensure they support the target.

We’ve also published and submitted to government a 14-step plan that highlights the actions needed in a number of different areas on the road to Net Zero – and which we hope to see addressed in tomorrow’s Budget and the long-awaited Energy White Paper.

Indeed, since we published these, the government has already made a start on our wishlist by proposing a 2035 phase out-date for internal combustion engines and announcing that onshore wind and solar will be able to take part in future Contracts for Difference auctions.

At the same time, barely a week goes by now without a major company announcing a Net Zero target.

 

Harnessing new benefits

While undoubtedly a nod towards reputational concerns, these pledges also recognise the benefits that can come from low-carbon energy, flexible power demand, good planning and appropriate investment. Also, from embracing technology and innovation and by taking a deep and continuing focus on their offerings, supply chain and end-to-end operations and processes.

Energy suppliers are tapping into this demand through offering innovative business solutions.

These can include providing an agreement to provide 100% low-carbon power, decarbonising heating and industrial processes, doing the same with the transport fleet through the electrification of vehicles, or ensuring low-cost security supply through battery technology (or perhaps even utilising the electricity stored within an electric vehicle).

Reducing energy costs

Energy costs can be a significant part of a business’s overheads. So reducing these costs, through offering flexibility to the energy system – for instance by reducing demand when the system is constrained or taking advantage of plentiful low-carbon wind – has a value, and the market is already offering these products.

A flexible energy system will be key to making the most efficient use of our resources.

Companies like npower Business Solutions have a vital role to play in our ambitions to achieve a Net Zero economy. Not only will they provide the innovation and the technology that will enable the changes required, they have a vital role in offering the tariffs and products that are demanded by industry.

While many companies may take a green tariff with a view to their social responsibility, many (if not all) will also be looking at the economics and business proposition – how can decarbonisation reduce costs and improve my processes?

With climate change becoming an ever-greater concern to the public, customers and clients will be wanting to know that the companies they choose to do business with are playing their part.

Opportunities for reward

Businesses know that every challenge can also be an opportunity. As with the country as a whole, there can be rewards for those who have the leadership and ambition to embrace the change that is inevitably coming sooner rather than later.

Indeed, many businesses have already taken action. For example, by reviewing their energy sources, installing onsite battery storage or generation, using electric vehicles with onsite charging points, exploring new heating solutions or implementing energy efficient measures.

These are all areas that feature prominently in our 14 Steps document. And in a future where we all need to play our part, it can all can add up to big differences in the long term.

These difference can benefit the bottom line of course. But there will also a reputational benefit from seizing the opportunity in good time.

Key questions for businesses

To get involved or build on existing progress, businesses need to ask themselves:

  • Where is our energy coming from?
  • Could it be cleaner or backed by low-carbon sources?
  • Could we generate energy on our site(s)?
  • Could we provide flexibility services, like battery storage, to help balance the energy system as it incorporates more intermittent renewable generation?
  • Could we install smart technology and meters to generate important data and help us be more efficient and help the energy system manage supply and demand better?
  • How can we show our customers we are serious about contributing to Net Zero ambitions and helping to tackle climate change?

 

Energy suppliers also need to be ready to provide these solutions – along with answers to the questions we don’t even know yet but which will emerge as we continue this transition to Net Zero.

 

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