News Archive - Monthly Archives: June 2021

Government brings forward plans to phase out coal

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The UK government have brought forward their target to end coal-fired electricity generation by a year as it continues to try and set the agenda on climate change.

While the percentage of power generated by the carbon-emitting fossil fuel has steadily declined in recent years as green energy procurement becomes more valued, the plan is for the power network to not be reliant on coal at all by October 2024.

Prime Minister Boris Johnson hopes the move will serve to encourage other nations to step up their efforts before the United Nations’ Climate Change Conference (COP26) in November.

“Today we’re sending a clear signal around the world that the UK is leading the way in consigning coal power to the history books and that we’re serious about decarbonising our power system so we can meet our ambitious, world-leading climate targets,” said energy and climate change minister Anne-Marie Trevelyan

“The UK’s net zero future will be powered by renewables, and it is this technology that will drive the green industrial revolution and create new jobs across the country.”

Britain, home to the world’s first coal-fuelled power plant in the 1880s, was largely reliant on the fossil fuel for electricity for the next century.

But in 2020, coal only made up 2% of the overall energy mix as renewables became more popular.

Scope 3 carbon emissions dominate the carbon conversation

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Driven by the Paris Agreement and the need to meet goals on climate change, environmentally-conscious companies across the world are stepping up their attempts to contribute towards a net zero carbon economy.

Understanding the emissions that they generate directly is only half the battle, though. On top of operational emissions, bracketed by the Greenhouse Gas Protocol as Scope 1 and 2, to fully understand their carbon footprint companies need to calculate, and then eliminate, emissions across the supply/value chain – Scope 3 emissions.

Emissions generated by a supplier’s activities may come about through the production of raw materials or components, or through smaller scale day-to-day activities such as business travel and the disposal of waste.

According to Deloitte, these Scope 3 emissions account for more than 70 per cent of their carbon footprint, which underlines how important it is for companies to obtain the necessary information from suppliers.

The detail is in the data

Suppliers that do not have to be compliant with the Streamlined Energy and Carbon Reporting (SECR) scheme may have taken a laissez-faire approach to evaluating their carbon footprint as a company, so the process of gathering this information is not always straightforward.

The willingness of suppliers to lend their support in this issue may depend on their own net zero culture, the relationship between the companies involved, and pressure from outside in terms of environmental transparency.

To sidestep this challenge and reach net zero, companies may decide to review their supply chain and set out to work only with like-minded ‘green’ companies, or even attempt to ‘de-scope’ emissions by outsourcing emissions-heavy activities like manufacturing.

At Energy Management, we understand that measuring your Scope 3 emissions can be complex, even down to simply deciding what should be included.

We can help your business to evaluate the impact of your Scope 3 emissions and your net-zero journey could start with a brief call with one of our energy consultants, who can be contacted on 01225 867722.

Energy procurement: When is the price right?

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The first half of June has highlighted just how challenging it can be to secure the best business energy procurement deal if you’re not armed with the right information.

Despite what the most bullish energy consultant might say, no-one can predict the future, especially not when it comes to business energy prices.

Too many factors outside the control of suppliers and brokers come into play for that to be the case, whether they are geopolitical or meterological.

However, beyond doubt, the first half of June has been a period when prices have continued to be on the up, both in terms of gas and electricity.

Despite the warm weather the UK has experienced for the majority of June, gas prices continued on an upwards trajectory. Contracts have largely been dictated by an overall strengthening across global energy markets, with oil, in particular, displaying an impressive recovery.

Storage issues

However, other fundamentals have contributed to the bullish sentiment. A strong demand for LNG supply in Asia, combined with the continent’s lucrative pricing, has reduced deliveries into the UK and Europe and impacted storage levels that are replenishing slower than previous years due to a lack of surplus supply.

Scheduled maintenance and unplanned outages have also played their part in regard to price increases this month, limiting imports into the UK. As a result, the system has seen very few periods of oversupply despite low demand for heating.

Carbon conundrum

Meanwhile, wind generation has underperformed once again this month, adding to some of the gains we have seen in recent weeks. A lack of consistent wind generation has meant that reliance on gas-fired power was unseasonably high.

The hot weather we have enjoyed this month has also increased demand for cooling across the country, creating an additional challenge for a stretched energy mix.

Rising carbon prices have played a role behind increases on the power curve too, as this makes fossil fuels such as gas, oil and coal more expensive. An unwanted variable at a time when low carbon generation sources are in limited supply.

Oiling the wheels

OPEC+ members agreed to a gradual increase in production at the start of the month which helped oil prices (both Brent Crude and WTI) to reach a two-year high.

The International Energy Agency also called for a further increase in production to help meet expected demand over the next 12 months. Some projections even expect oil demand in 2022 to be greater than 2019.

As such, the agency has called on OPEC+ to increase output by 1.4 million BPD by next year, with a number of leading analysts predicting oil to trade at $100 a barrel in 2022.

Climate Change Agreement – TP5: A call to action

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If you don’t know where you are, how can you know how to get to where you want to be?

That is the question we put to many of our clients when discussing the Climate Change Agreement’s (CCA) Target Period 5 (TP5).

Progress analysis and monitoring of energy consumption data is crucial if companies, especially those within energy-intensive industries, want to meet TP5.

The final target period of the CCA has been extended by the UK government for two years to incentivise industry to reduce its energy consumption against production in the overall drive towards achieving net-zero.

But by doing that, they have also moved the previous base line, from which data is measured against, from 2008 to 2018, to reflect any energy efficiency measures or improved productivity that may have taken place across the intervening 10-year period.

The Department for Business, Energy and Industry Strategy (BEIS) has recommended a 6.67 per cent decrease against the 2018 figures.

Raising the bar

Effectively the bar has been raised and companies need to do more if they are to meet the target, whether that is reducing the amount of energy used for the number of units they produce or produce more units but without using any more energy.

Energy Management’s National Account Manager Ian Scattergood has urged companies to address the situation before it is too late.

“The majority of the businesses whose energy data we have analysed will miss TP5 if they don’t act now,” he said.

“It’s a blunt message but they wouldn’t have got to this point had they carefully monitored their energy performance against production output.”

Identifying issues

A thorough monitoring process is easy to implement and will pay off further down the line, he adds.

“The greater the granularity of the data, the easier it is to see if there are any anomalies. If you are only looking at a month’s worth of energy consumption, it is more difficult to pinpoint days when there are spikes in energy use. Daily monitoring allows businesses to identify problems more readily.

“How can you fix a problem if you don’t know it exists?”

Once anomalies in energy consumption have been flagged through the monitoring process, companies can then look at what energy efficiency measures need to be taken.

“This could simply be changing work practices or staff behaviour – measures that don’t necessarily need much investment from a financial point of view, just a cultural buy-in from everybody involved,” added Ian.

“Beyond that, companies might consider site surveys which delve deeper into all operational aspects relating to energy use. Recommendations for ways things can be improved will then be put forward.”

Report reveals record levels of carbon dioxide

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Power station with cooling tower

The amount of carbon dioxide in the air is at its highest ever recorded level, according to US-based scientists.

The National Oceanic and Atmospheric Administration’s (NOAA) weather station in Hawaii recorded carbon dioxide at about 419 parts per million last month, more than at any time since measurements began in 1958.

Pieter Tans, a scientist with NOAA’s Global Monitoring Laboratory warned there would be catastrophic results if more action was not taken to combat carbon dioxide emissions – a key driver in climate change.

One way businesses can play their part is through green energy procurement and behavioural change in the workplace. A reduction in the use of energy sourced from fossil fuel is one of the key ways in tackling the problem.

“We are adding roughly 40 billion metric tons of CO2 pollution to the atmosphere per year,” Tans wrote in the report. “That is a mountain of carbon that we dig up out of the Earth, burn, and release into the atmosphere as CO2 – year after year.”

The amount of carbon in the air now is as much as it was about 4 million years ago, a time when sea level was 78 feet (24 metres) higher than it is today and the average temperature was 7 degrees Fahrenheit higher than it was before the Industrial Revolution, the report said.

Despite the pandemic lockdown resulting in a significant reduction in road use and energy consumption, scientists could not see a drop in the overall amount of carbon in the atmosphere. This was partly attributed to the prevalence of wildfires, which release carbon into the atmosphere.