Sourcing green energy

Green business energy is proving more popular than ever as businesses increasingly set out a procurement energy strategy aligned to sustainability as well as cost.

While not all businesses are able to generate their own energy – a sustainable way of putting less pressure on the national grid – green energy contracts are widely available.

But what exactly is a green energy contract?

Basically, the gas and electricity that powers your premises of work comes from a supplier who has sourced it through a renewable energy generator such as wind or solar farms, hydroelectric power stations or biomass plants.

The amount of energy from renewable sources differs from supplier to supplier; however, it is a legal requirement for them to publish details of their fuel mix.

The more businesses (and households) that adopt this policy, the more renewable energy is fed back into the grid, and the country’s dependence on fossil fuels reduces, helping to alleviate the onset of climate change as a result.

If you’d like some advice on the range of green energy contracts that are currently being offered on the market, please get in touch with one of our energy consultants on 01225-867722

Public appetite for renewables remains strong

A quarterly poll issued by the Department for Business Energy and Industrial Strategy (BEIS) shows that the public appetite for renewable energy remains very high.

The overwhelming majority of the people questioned (82%) in the Public Attitudes Tracker, commissioned by an independent research company, back the transition away from oil and gas to greener sources of energy. Only 2% opposed the shift.

Plenty, however, remain to be convinced by the validity of fracking as a potential energy source moving forward, with a new high of 45% against the extraction of shale gas.

Just over three-quarters of those polled said they were concerned about climate change.

Net-zero target

Quoted in an article on the Energy Voice website, Renewable UK’s deputy chief executive Melanie Onn said: “Even while we face the unprecedented challenges posed by Covid-19, the public supports continued action to avoid the worst the impacts of climate change and make our economy more sustainable.

“Investment in new renewables, which is supported by 82% of people, will stimulate growth and employment as the economy recovers from the impacts of the virus.

“Renewable energy capacity will grow rapidly this decade and beyond to meet our net-zero emissions target, and our industry will be investing tens of billions of pounds and creating much-needed jobs across the UK.”

For public sector bodies looking to reflect the mood of the pubic and reduce their carbon footprint, our Green Energy Framework could provide answers in terms of green energy procurement and a host of other areas.

The GEF includes a shortlist of green energy suppliers who have been chosen based on the following criteria: tariff competitiveness, billing accuracy, green certification and the most favourable terms and conditions.

SECR – don’t delay

In the wake of the coronavirus pandemic, the government has offered companies the option of a three-month extension before they need to file their financial accounts.

Ordinarily, the information is due on 1st April but for those companies that chose to apply, the deadline has been pushed back to the start of July.

This also applies to the new system for carbon and energy reporting, SECR, which is now included as part of the end-of-year accounts.

Clearly this will be welcomed by some in these challenging economic times, but as SECR is an unfamiliar paradigm with a lot of data to be collected, it would be prudent for companies that do decide to use the extension to still act sooner rather than later.

The new regulations will require an estimated 11,900 companies incorporated in the UK to disclose their energy and carbon emissions – a far greater number than were required to act under the old Carbon Reduction Commitment Energy Efficiency Scheme (CRC).

Data gathering

As an external consultancy with expertise in compliance and energy-related legislation, we can collate, analyse and present this sustainability data for you.

Whilst the energy and carbon reporting data is not audited in the same way as a company’s finances at present, this is not to say it won’t happen in the future.

And as climate change is one of the top global issues, it is increasingly likely that companies will be judged by potential customers on their carbon footprint and attitude towards sustainability.

With the information now in the public domain, companies have an interest in reporting their emission figures so that they make sense in the context of their organisation, not least because the data is now in the public domain.

If you would like any advice or help in making sure you are SECR compliant, please get in touch on 01225-867722 or visit our dedicated web page.

Coronavirus and Globalisation: What’s next for supply chain sustainability?

The coronavirus pandemic has left global economies at a standstill and knocked the confidence in global and connected trade.

The question has been asked: would businesses benefit from pivoting to more localised value chains, as France President Macron advocates, or do global supply chains enable a global shift towards a climate-resilient future?

While that is open to debate, the damage caused by the coronavirus is there for all to see, in hard figures. In what has been described as “an ugly” situation, the World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year.

The World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year

The virus is having a huge impact on transport and productivity with many supply chains being affected. Manufacturers are trying to shift the structure of their supply chains to make up for missed deliveries or inputting pivoting systems to make different products entirely.

PPE and hand sanitiser are two obvious examples where this is the case. Turning whiskey into wine was not an unfamiliar process before the outbreak, but how many distilleries would have imagined they’d end up making products that people would raise a glass to because they made them safe not happy?

The world has been turned upside down in so many respects.

Sustainability to suffer in the long run?

With this shift in supply chain structure comes concerns, that the short-term focus placed upon operational capacity and processes could unravel efforts to integrate suppliers into more sustainable practices.

As data from the Financial Times reveals, COVID-19 has unmasked an overt reliance on manufacturing suppliers located in China, with 300 of the world’s top 500 companies owning facilities in Wuhan, the city where the pandemic began.

It has become more and more apparent that, for many organisations, the globalisation of manufacturing has created a scenario where supply chains are unprepared for disruption.

This is due to either being very localised or spanning several different countries, it can even be to the point where end-user businesses won’t be aware of associated links to deforestation, human rights abuse and other environmental and ethical factors.

Are you SECR compliant?

As of today (April 1), the first Streamlined Energy and Carbon Reporting (SECR) reports are due.

SECR was brought in last year to encourage groups of businesses that fulfil the specified criteria to become more energy efficient and reduce their carbon footprint.

It replaced the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) with the aim of widening the net and bringing the benefits of carbon zero to more businesses.

The new regulations will require an estimated 11,900 companies incorporated in the UK to disclose their energy and carbon emissions – a far greater number than were required to act under the CRC.

Qualifying companies will need to include information on their UK energy use in line with the SECR framework in their Directors’ Report, or an equivalent Energy and Carbon Report for LLPs, for financial years beginning on or after 1 April 2019.

Where energy use and carbon emissions are considered to be of strategic importance to the organisation, the disclosure may be made in the Strategic Report instead, with a statement in the director’s report to indicate and explain this decision.

Who needs to comply?

Three groups of businesses are affected by the new regulations. Companies that fall within the following definitions must comply unless they meet certain exemption criteria:

  1. Quoted companies of any size that are already obliged to report under mandatory greenhouse gas reporting regulations.
  2. Unquoted companies incorporated in the UK that meet the definition of ‘large’ under the Companies Act 2006 will have new reporting obligations. This applies to registered and unregistered companies. Note that the criteria for ‘large’ differs from the ESOS Regulations.
  3. ‘Large’ Limited Liability Partnerships (LLPs) will be required to prepare and file a ‘Energy and Carbon Report’.

Unquoted companies or LLPs are defined as ‘large’ if they meet at least two of the following three criteria in a reporting year:

  • a turnover of £36 million or more
  • a balance sheet of £18 million or more or
  • 250 employees or more.

Certain companies that would otherwise be eligible may be exempt if their energy use is low – 40MWh or less over the reporting period.

Whilst not a requirement, external verification or assurance is recommended as best practice to ensure the accuracy, completeness and consistency of data for both internal and external stakeholders.

Energy Management has a proven track record in ensuring companies are compliant with all the latest relevant industry legislation so if you want to find out more about your SECR requirements, you can contact us on 01225-867722 or email sales@energymanagementltd.com.

The impact of COVID-19 on energy and the environment

covid-19

The Coronavirus is seeming to have a spiralling effect, causing major disruption to people’s lives in one way or another. It is also having multiple side-effects on the energy industry and the environment, including very turbulent market pricing.

So far, we have seen the following direct impacts on multiple suppliers/companies we work with on a regular basis, some of these include:

  • A number of suppliers are now only taking emergency phone calls, meaning regular tasks cannot be undertaken.
  • Suppliers are either not quoting which could result in out of contract rates (OCR) or taking up to 15 working days to quote or not taking on any new clients at all
  • Western Power Distribution (WPD) has stopped all contracting other than emergency work only, with many Distribution Network Operators (DNOs) set to follow suit.
  • If businesses are unable to pay bills, and this, in turn, creates a poor credit rating. Energy suppliers will charge a bond as a result which can disrupt cash flows with the knock-on effects potentially felt over the next few years.

Prior to the Covid-19 crisis, Carbon Zero was a major talking point, however, the conversation has gone quiet as short-term thinking has taken over. Personal income and wealth are the primary concerns for people at the moment.

Sustainability on hold?

Many companies had outlined their plans to Carbon Zero targets prior to the pandemic took a grip, which included green energy, renewable energy sources and Electric Vehicles (EV) and installation.

However, since the Coronavirus began it is now estimated that EV battery demand could be downgraded by 4% and solar installations are likely to be 16% lower than previously forecast. It is also expected that 7 in 10 businesses are planning on partially or fully pausing any sustainability announcements.

Many of us are currently working from home or not able to work at all, and that has affected how we communicate with one another. All key green policy meetings have also been postponed and it will be a minimum of six weeks before any UN climate meetings are held in person.

With 16.8 billion people working from home, domestic energy bills could look to increase by £5.2million – which could put a lot of strain on energy providers as well as individuals/family out of work and with no income.

So how does the rest of the world fare?

China has just announced for the first time since going into isolation that they will be relaxing their regulations slightly and allowing individuals involved in the manufacturing sector to go back to work. This could, therefore, cause problems for the rest of the world in terms of energy usage. As their energy output increases and our work decreases, how will this leave us? Will China have the energy they require? Prior to this, China had seen a 25% decrease in its emissions.

Italy has been one of the country’s worst affected by the Coronavirus outbreak, with energy demand on the 18th March recording at being down by 7.45% week-on-week.

Will this ever end?

We all know drastic measures are needed to combat the pandemic, one of which is the cancellation of flights. On the 24th March, we saw 15,650 flights cancelled – the highest number this year.

Another consideration is the number of people – 4.2 billion at the last count – who do not have access to proper sanitation and are unable to follow World Health Organisation guidelines as a result.

What do we expect to see going forward?

In terms of CO2, we could see a similar scenario to the 2008 recession when there was a 6% increase in year-on-year emissions due to businesses and policymakers making up for a loss of productivity. Much depends on the longevity of the lockdown.

Obviously this could have a detrimental impact on businesses attempts to hit their carbon zero targets and the government’s target of being Carbon neutral by 2050.

Carbon net-zero heroes

The only zeros most business leaders used to concern themselves with were the ones added to a long line of figures on a balance sheet.

However, mention the word zero nowadays and it’ll mostly be included in a conversation about sustainability.

This is not smoke and mirrors stuff, anything but, the mind-shift can be seen in all business sectors as the world economy strives for a greener future.

Emission reduction is no flight of fancy

The budget airline, Ryanair, doesn’t always get the best press but the recent appointment of its first director of sustainability has to be applauded. Blue sky thinking indeed.

Thomas Fowler is the man responsible for the company meeting its own target of reducing emissions per passenger per kilometre from 66g at the end of 2019 to 60g by 2030.

Crucially, they now publish monthly emissions data on their website. “Once you publish [pledges and data], you have to stand over them,” Fowler said. “Transparency and disclosure are going to become a bigger play for us in the next few years.”

Following in its slipstream are Etihad Airways who have started to make long-haul flights free from single-use plastic.

Fossil fuels are history

Another company changing the narrative, this time in the financial world, is Blackrock, the world’s largest asset manager. Blackrock has already made strides on its stance to remove fossil fuels from its portfolio and is committed to embedding climate action into its investment decisions.

Elsewhere, the drinks are on BrewDog, in celebration of the trendy craft beer firm’s pledge to give customers an equity stake in the company if they recycle beer cans.

And Heineken-owned cider brand, Old Mout, have unveiled a new partnership with the World Wildlife Fund (WWF), aimed at uniting young consumers in a drive to protect natural habitats and save endangered species from extinction.

The green machine

All these efforts are just the tip of the iceberg – admittedly not the best turn of phrase given the threat to Antarctica by global warming – as figures released by BloombergNEF (BNEF) show that there has been a large increase in new corporate sustainability commitments.

For example, BNEF’s 1H 2020 Corporate Energy Market Outlook found that corporates purchased 19.5GW of clean power through power purchase agreements (PPAs) last year, up from 13.6GW in 2018 and more than triple the levels recorded in 2017.

BNEF’s lead sustainability analyst Jonas Rooze said: “Corporations have purchased more than 50GW of clean energy since 2008. That is bigger than the power generation fleets of markets like Vietnam and Poland. These buyers are reshaping power markets and the business models of energy companies around the world.”

Small steps to sustainability

Of course, not all companies are big enough to warrant having a director of sustainability on their books or write open cheques to charitable causes, but there are plenty of small measures, such as those listed below, that can be easily implemented in an affordable way.

  • Green energy procurement
  • Power Purchase Agreements
  • Self-Generation Schemes
  • Electric Vehicle incentives
  • Waste to Energy Recycling
  • Staff training – behavioural changes

Energy Management has a new Net-Zero business model that helps clients reduce their carbon emissions.

If you’d like us to help you join some of the biggest global companies and be at the forefront of the climate change agenda, you can get in touch with us by email sales@energymanagementltd.com or call 01225-867722.

Sustainability obstacles holding back businesses from going green

Why are businesses struggling to change sustainability ambitions into actions?

A survey involving over 9,000 businesses of all sizes and sectors found 96% are wanting to improve their environmental and social practices; however, this is becoming increasingly challenging due to minimal resources and budget.

HSBC spoke to 9,131 of the largest businesses across 35 different markets and asked what actions they are currently taking, and what they plan to do going forward.

Key challenge

Of all the businesses whose opinions were canvassed, 96% wanted to make more resourceful and ambitious choices in the future but found they were being held back by at least one key challenge.

Over a quarter of the surveyed respondents are said to be confused about what to prioritise due to the large volume of Environmental, Social and Corporate Governance (ESG) measurement criteria available, and what best practice looks like for a business of their size.

According to a report from the World Business Council For Sustainable Development (WBCSD), the number of voluntary ESG requirements has increased from 10 to 182 in the last decade, with up to 80% being non-governmental organisations.

Need help?

Is this your business? Are you struggling to reduce your business’s carbon footprint with little budget and resources? Then get in touch with our highly-skilled engineering team who will be happy to help.

Whether it’s energy efficiency surveying, understanding legislation and requirements, utility management, SECR or EV, EPC, DEC and TM44, we have it covered.

Contact one of the sales team on the information below:

Email: sales@energymanagementltd.com

Tel: 01225-867722