Energy Manager Magazine June 2023

Low-Carbon Network development at St James’s University Hospital to be connected to Leeds PIPES district heat network

The Leeds Teaching Hospitals NHS Trust (LTHT) is taking another step closer to its ambition to achieve net zero carbon emissions by 2040, with support from law firm Bevan Brittan.

A new heat supply agreement between the Trust and Leeds City Council will enable the supply of low carbon heat from the Leeds PIPES district heating network to the Trust’s internal low-carbon network providing low temperature hot water to 17 buildings at St James’s University Hospital.

National law firm Bevan Brittan, which has an office in Leeds, advised the Trust on the heat supply agreement.

Leeds PIPES district heating network provides affordable, reliable and sustainable heat using heat recovered from the city’s recycling and energy recovery facility (RERF). It provides a low carbon alternative to the traditional burning of fossil fuels for hot water heating. The Trust sends 100% of its general & offensive waste to RERF. In April 2022, the Beckett Wing at St James’s University Hospital became the first LTHT building to connect to Leeds PIPES.

Nathan Bradberry, Partner from

Bevan Brittan said: “It is great to see further decarbonisation of the Leeds Teaching Hospitals NHS Trust estate by increasing the supply capacity from the Leeds PIPES district heat network. This low carbon heating will play a significant part in the Trust’s drive towards achieving net zero carbon emissions’.

“The heat supply agreement for a bulk transfer connection into the Trust’s internal low-carbon network was complex given the requirement to balance Leeds City Council’s obligations around the availability of heat being provided to the Trust against the Trust’s own on-site alternative heat generating assets and the needs of other customers on the Leeds PIPES district heating network.”

Chris Kelly, Associate Director of Estates at LTHT commented: “The Trust has taken significant steps towards reducing gas consumption at the St James’s University Hospital site, by identifying buildings to be connected to the newly developed internal low-carbon heat network. Which will be supplied by Combined Heat and Power (CHP) waste heat, heat pumps, and a bulk connection to the Leeds PIPES district heat network,

following a Heat Sale Agreement with a fellow anchor institution Leeds City Council, supported by expert commercial legal advice from Bevan Brittan.”

A team of experts from Bevan Brittan have supported the Trust including energy and infrastructure experts Nathan Bradberry (Partner) and Thomas Graham (Associate) who advised on the heat supply agreement.

LTHT has been awarded £22m from the government’s Public Sector Decarbonisation Scheme (PSDS) fund to implement a heat decarbonisation strategy, switching to lower carbon heating, improving building fabric and energy efficiency measures across the Trust estate.

The Leeds PIPES network is being constructed by Leeds City Council and Vital Energi. Almost two thousand council homes, public sector buildings (education/ healthcare/ council) and commercial businesses around Leeds City Centre will be connected to the low carbon district heat network, which reuses heat which is already being produced at the city’s RERF. https://www.bevanbrittan.com/

NEW ENERGY TRADING SOLUTIONS TO HELP BUSINESSES SAVE TIME AND MONEY

Leading business energy supplier, npower Business Solutions (nBS), has launched a new suite of flexible energy trading solutions that have been specifically designed to help businesses maximise efficiency and reduce energy invoices.

Flex Portfolio Solutions is delivered by nBS’ market-leading Optimisation Desk, which is a specialist, dedicated expert team providing real-time guidance on movements in the wholesale energy market. Businesses can choose from

three options to help them trade energy on the wholesale market, as well as three levels of support from nBS’ hedging experts, all of which are tailored to cater for different levels of expertise and risk appetite. This market intelligence helps businesses to better manage their energy position, understand their risks and take advantage of any opportunities in the market.

During a time where the energy market has experienced major volatility, nBS believes that offering a range of solutions will help businesses build a successful hedging strategy, ultimately saving time and money, as Gemma Eagle-Bruce, Optimisation Desk Manager at npower Business Solutions, comments: “Different organisations have a variety of complex energy needs that require full

flexibility and bespoke support, and many simply do not have the time or expertise to effectively trade on the wholesale energy market to achieve the best outcome for their business.

“That is why we developed Flex Portfolio Solutions. It provides three levels of hedging options for businesses, from fully outsourcing their energy trading strategy to one of our expert portfolio managers, to maintaining control themselves and using our experts on a consultative basis.

“At nBS, we firmly believe that our role is to demystify energy for our customers. By offering a range of flexible solutions that can adapt to a business’ needs, we are helping them to stay in control of their hedging strategy, save time, and maximise their energy spend.”

To find out more about nBS’s new Flex Portfolio Solutions, visit https:// npowerbusinesssolutions.com/ corporate/flexible-portfolio-solutions

...RELY ON POWERSTAR

OVER HALF OF CFOS SAY SUSTAINABILITY IS NOW A KEY PART OF THEIR ROLE

New research commissioned by energy procurement specialist, Open Energy Market, reveals over half (53%) of CFOs believe sustainability to be very important to their role, with a third (33%) saying it’s one of the most important aspects to their remit.

However, the current practicalities of realising these goals can limit progress. CFOs identified an increase in overhead costs (27%), managing financial risk (24%) and complexity of renewable tech (21%) as the main barriers to signing off sustainability investments.

The survey, which captures the perspectives, opportunities and challenges facing 150 CFOs in driving sustainability initiatives across the UK, found that the majority of CFOs (85%) believe achieving net zero is important to business growth.

The news coincides with the launch of the company’s first-of-its-kind net zero platform, True. True unites an organisation’s real energy procurement costs and net zero strategies in one platform, enabling teams across sustainability, procurement, operations and finance to building stronger financial-grade businesses that accurately

demonstrate the viability, ROI and impact of renewable investment.

True comes at a time when businesses are increasingly recognising the importance of sustainability yet are challenged with accurately measuring financial impact in a volatile energy market.

The finance department is endorsed by 44% of CFOs as the most important business function in driving sustainability. This perspective is more pronounced amongst larger companies, with more CFOs (37%) at these businesses saying facilitating the transition to net zero is one of their key priorities over the next twelve months, compared to the country average (26%).

Almost half (48%) of CFOs say there is room to improve the alignment between procurement and sustainability teams, which suggests business cases for renewable investment require financial grade insights and a more

cohesive approach to better engage finance teams.

CFOs face multiple complex considerations when it comes to green energy initiatives. The main reasons for delay are the lack of cost-effective solutions to support implementation of renewables (40%); a lack of technologies that offer investment grade cost-benefit analytics of the business’s energy mix (37%); followed by limited access to expert partners and advisors to support the implementation of renewables (28%).

With its data-driven capabilities, True provides changemakers and environmentally conscientious businesses with real-time visibility into the effectiveness of their energy mix, in turn helping them to save money, have greater control over the execution of net zero strategies and make informed sustainability decisions.

For more information about True, visit www.truezero.tech

HEAT NETWORK OPERATORS URGED TO TAKE ADVANTAGE OF FUNDING AHEAD OF POTENTIAL REGULATORY EFFICIENCY CAP

Heat network technology provider, Evinox is sign-posting heat network operators to access the Heat Network Efficiency Scheme (HNES) – which is the part of Government’s Net Zero Commitment 2050 – while the funding is available, warning of potential regulatory implications in the coming years. The regulations are predicted to include a minimum standard of efficiency well in excess of current network performance.

The HNES is a £32 million grant package which runs until 2025 offering funds to applicants in the public, private, and third sector in England and Wales. The goal of the scheme is to fund improvements to district heating or communal heating systems that are currently inefficient or otherwise defective. It follows a successful pilot program which assisted 73 projects in finding cost-effective enhancement options in addition to delivering upgrades to 37 heat networks.

According to Evinox, most heat

networks currently function at an average of between 30% and 40% efficiency which clearly demonstrates the need for significant improvements. By increasing the efficiency up to 65%, which Evinox says is readily achievable through some straightforward measures, the savings for a typical resident can be around £550 per annum and provide a reduction of 1,000kg of carbon emissions for each apartment.

As a low-carbon method of heating multiple residences, heat networks are expected to go from providing 2% of the UK’s heat, to 18% by 2050. To progress towards this goal, heat network regulation is expected to come into effect in early 2024. Part of the regulation is intended to accelerate the decarbonisation of heat and improve the outcome for consumers.

Due to the recent merger between Evinox and Minibems, Evinox now has access to new technology which can significantly improve the efficiency of existing communal heating systems

irrespective of which type or brand of heat interface unit is installed.

Evinox is thus now positioned to become the industry leader in the decarbonisation of heat networks. Providing a full range of equipment and services including consultancy on HNES projects, Evinox is ideally placed to help network operators fulfil incoming regulations and take advantage of funding opportunities. Their offerings include plant room and network optimisation and retro-fit upgrades that maximise the performance of heat interface units.

Through a holistic approach including plant room improvements, smart heat interface units (HIUs), retrofit solutions for existing HIU installations, billing audits and insulation inspections, Evinox can help heat network operators simplify the process of raising heat network efficiency.

For more information and support with an application for HNES Funding contact info@evinox.co.uk

Yau, Product Manager, Ventilation

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COVENTRY IS SET TO HOST ONE OF THE MOST INNOVATIVE EVENTS OF THE YEAR ON 20TH JUNE – THE BIG ZERO SHOW

The event is all about sustainability and finding ways to create a zero-carbon future. It will take place at the Coventry Building Society Arena and will be attended by some of the most influential figures in the sustainability sector.

The Big Zero Show promises to be a ground-breaking event, with a range of speakers from various backgrounds coming together to share their insights and experiences.

Some of the most prominent speakers at the event include Juliet Davenport, the CEO of Good Energy, Andy Street, the Mayor of the West Midlands and Jon Butterworth, the CEO of National Gas.

Juliet Davenport is a well-known figure in the renewable energy industry. She founded Good Energy, a renewable energy company that supplies clean energy to homes and businesses across the UK. She will not just share the importance of reducing carbon emissions but explain how this can be done whilst still making a business a financial success.

Andy Street is the current Mayor of the West Midlands and a former Managing Director of John Lewis. He has been a strong advocate for the green agenda and has committed to making the West Midlands carbon-neutral by 2041. He has also championed the use of electric vehicles and has overseen the creation of several low carbon transport projects in the region.

Jon Butterworth, the CEO of National Gas, has more than 30 years of experience in the energy industry. He is an expert on the challenges and opportunities associated with the transition to zero-carbon energy. He is leading National Grid’s efforts to decarbonise the gas network through the development of green gas technologies such as biomethane and hydrogen.

The Big Zero Show will be a unique opportunity for attendees to hear from these inspiring speakers and gain valuable insights into the latest developments in sustainability. The event will feature a range of talks, discussions and interactive sessions, covering topics such as renewable energy, green

transport and sustainable living.

Alongside Big Zero Sessions, Pathway to Net Zero talks will also be held to showcase businesses of all sizes from varying sectors tackling their carbon emissions and taking green strides.

Aside from the speakers, the event will also feature a range of exhibitors showcasing the latest sustainable products and services. Attendees will have the chance to learn more about sustainable technology, electric vehicles and eco-friendly products – and to network with like-minded individuals and businesses.

The Big Zero Show is expected to be a sold-out event, with attendees from across the country and beyond. It is set to be one of the most important events of the year for anyone interested in sustainability and finding ways to create a zero-carbon future.

future Net Zero is the organisation behind the Big Zero Show and is a leading authority in the transition to a net zero economy.

On a mission to provide businesses with the knowledge, skills and connections needed to accelerate the transition to a net zero world, its platform provides insights and resources to help companies navigate the transition to a greener, cleaner future.

The platform covers everything from energy management and circular economy to sustainable transport and green finance. By connecting businesses with experts in the field, future Net Zero is helping to drive the transition to a sustainable future.

The Big Zero Show is just one of the

many initiatives that future Net Zero is spearheading. By bringing together some of the biggest names in the industry, the show is a unique opportunity to learn about the latest trends and technologies in the green space.

With a range of speakers from different backgrounds and a variety of interactive sessions, it will be an invaluable opportunity to learn more about sustainability and to network with likeminded individuals and businesses. The event is not to be missed and attendees can expect to come away with valuable insights and inspiration for creating a better, more sustainable future.

Sumit Bose founder of future Net Zero said: “We believe the midlands will be one of the leading hubs for net zero, so we’re really happy to support the region and work with Coventry City Council and the arena.

“The Big Zero Show is growing year on year, we want businesses big or small, to come and see how they can get started on their journey to using less.

“Business matters and it can provide the solutions to help society, by offering consumers choices that are better for the planet and make business sense.

“Our show and platform, is designed to help, so please come along and get involved. We’re really excited for the talks we have planned, the experience on the day and of course the practical help we will offer.

“If you care about what your organisation is doing, if you want to be more profitable and sustainable, this is the event for you!”

www.bigzeroshow.com

In accommodation where the room occupant is not directly responsible for paying the heating bills, it is difficult to control how much energy they are using. Our purpose is to enable Energy and Accommodation Managers to take control of energy use, while ensuring rooms remain comfortable.

CROWN COMMERCIAL SERVICE AWARDS A NEW DEMAND MANAGEMENT AND RENEWABLES AGREEMENT

Crown Commercial Service (CCS) has awarded a new Demand Management and Renewables Agreement (RM6314), which aims to accelerate the UK’s net zero goals by helping improve the public sector’s energy consumption and efficiency. This new framework is one of 2 replacements for the current Heat Network and Electricity Generation Assets (HELGA) DPS Agreement. The other replacement is Demand Management and Renewables DPS Agreement (RM6313).

The new Demand Management and Renewables Agreement (DMR) provides a route to market for all UK Public Sector organisations to support their decarbonisation strategies. It is the first traditional framework within CCS’s wider construction and decarbonisation offering.

The new agreement builds on the progress in helping hundreds of public sector customers, putting energy efficiency and renewable power at its centre. The agreement will support customers within the following 5 energy efficiency areas, including:

Lot 1 – Solar photovoltaic projects

Lot 2 – Battery energy storage

Lot 3 – Heat pump projects (air source and ground source)

• Lot 4 – Heat network (design and build)

• Lot 5 – Carbon Net Zero / Sustainability consultancy

It will also include consultancy services, allowing customers to gain access to sustainability expertise to help them maximise the potential of their decarbonisation strategies.

The new DMR agreement, like the Construction agreements, uses FAC-

1 Framework Alliance Contract terms and conditions that allow public sector organisations to establish alliance contracts for certain projects.

The built environment is a major contributor to greenhouse gas emissions and environmental impact. The public sector will continue to play a significant role in the country’s journey toward net zero by providing buildings for millions of citizens accessing public services.

The new DMR agreement supports heat decarbonisation strategies by allowing customers to install heat pumps to reduce an estate’s gas consumption and heat network design and infrastructure for more extensive heat decarbonisation strategies.

Solar PV panels offer an economical alternative to generating electricity, from

public and residential buildings to park and ride buses. The cost of solar PV has significantly reduced over the past 15 years, with the payback period on the initial investment decreasing too.

To help overcome the challenges of funding public sector decarbonisation projects, customers can take advantage of the new DMR agreement through direct awards and Government and grant funding.

Learn more about the new Demand Management and Renewables Agreement (RM6314) by visiting the agreement webpage. https://www.crowncommercial. gov.uk/agreements/RM6314

You can find a full list of all the commercial agreements on offer, here: https://www.crowncommercial.gov. uk/digital_brochure/request/111/ commercial-agreements-digital-brochure

HEAT NETWORK INVESTMENT PLATFORM EXTENDED BY 2 YEARS TO MARCH 2025

Triple Point Heat Networks Investment Management has announced that the heat investment platform BHIVE has been extended by two years to 31st March 2025. BHIVE is a PCRcompliant Dynamic Purchasing System (“DPS”) which allows public sector heat network owners/developers to access funding and commercialisation services for their district heating schemes.

Almost 20 experienced investors and lessors have been onboarded onto the DPS, with more expected to join following this extension. Lot 1: Equity Finance covers both financial investment and commercialisation services, and is aimed at public sector users who want to access active capital (i.e. investors with the right skillsets to commercialise and deliver a district heating scheme). Lot 2: provides access to Asset Finance products.

The unprecedented scale and momentum of the UK’s district heating

market – supported by significant levels of public funding and helpful policy tailwinds – has meant the sector has never been more investable. With the UK’s ambitious and pioneering net zero targets, heat networks will play a huge role in decarbonising domestic energy consumption. The industry represents one of the biggest growth potentials for energy networks in Europe, and today’s announcement will help to further the expansion of heat networks across the country, enabling investment potential of up to £50 billion by 2050.

Announcement of this extension to the platform is further recognition by the UK Government of the importance of heat networks to decarbonise buildings. Alongside recent announcements of continued capital support for low carbon heat networks to 2028, including £220 million for the Heat Network Transformation Programme, the extension

of BHIVE helps cement heat networks as a core focus for achieving net zero in the UK.

The BHIVE DPS is open to Contracting Authorities wanting to access funding and, where relevant, commercialisation services for their heat network projects to:

• finance a new heat network,

• finance the expansion of an existing heat network, or

• facilitate the sale of part, or all, of an investment in a mature heat network – for example, where a Contracting Authority wishes to sell its stake in an operational heat network. This could also be part of a wider refinancing of the project.

The BHIVE DPS is also open to Contracting Authorities who do not expect to receive any funding from these government schemes.

https://tp-heatnetworks.org/bhive/

PEL 103 Power & Energy Logger

Bridge the energy gap between today and tomorrow. Increase energy e iciency and reduce your costs.

Measure and monitor power usage. Identify ine iciencies and out of hours use. Discover power factor, phase balance and harmonic issues.

ACTING ON YOUR ESOS ELECTRICAL ENERGY ASSESSMENT

With the 5th December 2023 deadline for phase 3 compliance to the ESOS Regulations approaching many qualifying organisations will have had the latest assessment of their energy consumption completed. But what now?

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment and reporting scheme aimed at promoting energy efficiency and reducing greenhouse gas emissions. It was established in July 2014 under the Energy Efficiency Directive of the European Union. By identifying cost-effective energy-saving measures and promoting a reduction in energy consumption, ESOS aims to contribute to overall energy efficiency and environmental sustainability.

To fall under the purview of ESOS a UK business must either employ 250 or more people, or have an annual turnover exceeding £44 million and an annual balance sheet total exceeding £38 million. Under the regulations, qualifying organisations must conduct comprehensive assessments of their energy use and identify energy efficiency opportunities at least once every four years.

The assessments provide valuable insights into a company’s energy performance and serve as a foundation for developing effective energy saving strategies. They include recommendations for energy efficiency improvements and details of actions taken or plans to implement those recommendations.

As part of their assessment, organisations will almost certainly receive a variety of electricity consumption profiles based on their half-hour billing data. These should be assessed to ensure they accurately reflect the working hours and processes that take place in the business, and can be particularly useful for identifying out of hours electricity use during evenings or weekends, for example.

Armed with the necessary electrical power consumption data, the next step is to identify areas or items of issue and put in place corrective measures. After all, while the need to perform an ESOS assessment may be due to

a mandatory requirement, the whole point of it is to then use the knowledge gained to make energy efficiency improvements. And with the recent rises in energy costs what business doesn’t want to reduce energy consumption and save money, while supporting the environment at the same time. Studies by the Carbon Trust show savings of up to 20% can be achieved through energy efficiency measures. Out of hours usage accounts for 46% of energy consumption in UK SME’s according to a recent British gas smart meter survey. Office equipment plays a significant role in the energy consumption of a small business, and turning off nonessential equipment at the end of the day can achieve savings of 12%. Office equipment left on standby during Bank Holidays and weekends will cost the average SME up to £6,000 per year. Up to 40% of a building’s electricity use is accounted for by lighting, and installation of occupancy sensors, daylight sensors or photocells, and replacing existing lighting

Julian Grant of Chauvin Arnoux UK explores the requirements for UK companies to adhere to ESOS, and discusses opportunities to identify and proactively address electrical energy efficiency issues and take advantage of the potential financial savings and wider business benefits.

with LED modules, can reduce electricity costs by between 30% and 80%.

Once a business decides to take the plunge to look at their electrical usage, they will need to use a portable energy logger (PEL) like the Chauvin Arnoux PEL103. With it they will be able to accurately monitor power consumption and much more, including the level of harmonics in the systems, load balance and power factor. Furthermore, they will be able to record the results over time giving comprehensive and reliable data about what is contributing to the energy consumption of the business.

Having obtained a PEL the next step is to decide where to install it. This will usually be in a distribution cabinet with the logger set up to monitor the circuits that are of most interest. Typically, these might be lighting, HVAC and possibly computer systems, or to start with, perhaps the energy drawn by the installation as a whole. Some three-phase PELs, including the PEL103, can also be used to monitor three single-phase circuits simultaneously which saves a lot of time.

The PEL should be set to make recordings over a period; a day is good, but a full week is better, as interesting things often happen at weekends. It may also be useful to record information over even longer periods to see seasonal trends.

Once the logged data has been downloaded from the PEL, the first thing to look for is out-of-hours usage. How much energy is the business continuing to use after the workers have gone home in the evening and over the weekend? Some of this usage will be necessary, of course, but a lot isn’t, and armed with reliable information from a portable energy logger the issues can easily be identified and addressed. The solution often being no more costly or complicated than installing a few time switches.

It’s a good idea to measure and log the energy consumed by lighting. Typically, this accounts for around 40% of the energy used in a building so it will repay careful examination. If it looks as if too much is being spent on lighting and all the unnecessary outof-hours usage has been eliminated, it may be time to look at the luminaires. Hopefully they are already low energy, but even so, substantial extra savings can possibly be made by switching to the latest LED types. Depending on the type of luminaire, this may involve no more than changing the bulbs, an exercise that will quickly pay for itself.

A PEL will also give vital information about the power factor of an installation. Poor power factor, and the associated high reactive currents, can cause a variety of issues within an electrical installation. Many network operators apply penalties in the form of a reactive power charge when power factor falls below a certain level, and this may be recorded as a parameter on a half hourly meter.

The good news is that it is possible to ‘correct’ poor power factor and so reduce the amount of reactive power. This correction usually takes the form of capacitors fitted near the main distribution board, but over time these capacitors can decay. It is also often the case that loads change over time without the power factor correction being appropriately resized. As a result, the power factor may be much worse than expected and reactive power may be adding a significant costing to the business.

Computers, LED lighting, variable speed drives and many other types of load found in modern installations generate harmonics, which are currents at multiples of the supply frequency. A PEL will record the size and order (frequency) of these harmonics to determine whether they are likely to be a problem, with the logged

information helping define what action to take to mitigate them.

Harmonics are unlikely to add much directly to the energy bill, but they can cause many other types of costly problems, like overheated neutral conductors, malfunctioning and premature failure of IT equipment, and excessive vibration of motors, so they are well worth investigating.

Assuming the business has a three-phase supply, another step in the preliminary analysis of the PEL data would be to check the load balance. In other words, whether the current drawn is the same for all three phases, and whether it stays that way throughout the whole day and whole week.

Current imbalances can often be caused by large single-phase loads, such as induction furnaces, traction systems, and other inductive machines. The uneven distribution of smaller singlephase loads across a 3-phase system can also cause a current imbalance, often occurring over time as an installation, originally balanced during its construction, has additional circuits and equipment added to it. If the loads are out of balance this could result in peak demand billing by the supplier and reduced performance and efficiency of other items in the installation.

Without doubt the Chauvin Arnoux PEL103 can relatively easily assist businesses in identifying energy inefficiencies, optimising equipment usage, and making informed decisions to improve energy efficiency following an ESOS assessment. And while it’s only been possible to give a few suggestions in this article, the Chauvin Arnoux technical team is at your disposal, and will be happy to help with all your energy monitoring and energy efficiency enquiries.

www.chauvin-arnoux.co.uk

STEAM SYSTEMS

SUSTAINABLE STEAM GENERATION: POWERING A GREENER FUTURE

In the pursuit of a sustainable and eco-friendly future, the importance of transitioning to clean and renewable energy sources cannot be overstated. Among the various methods of energy production, steam generation plays a significant role in many key industries, electricity generation, and district heating systems. By adopting sustainable practices in steam generation, we can reduce greenhouse gas emissions, improve energy efficiency and pave the way for a greener and more sustainable world. In this blog, we will explore the concept of sustainable steam generation, its benefits, and key strategies that can be employed to achieve it.

THE SIGNIFICANCE OF SUSTAINABLE STEAM GENERATION

Steam generation is an integral part of many industries, including food and beverage, healthcare, pharmaceuticals and chemicals. Traditionally, steam generation has relied heavily on fossil fuels, leading to significant carbon emissions and environmental concerns. However, by embracing sustainable practices, we can transform steam generation into a clean and environmentally friendly process.

TRANSITIONING TO RENEWABLE ENERGY SOURCES

One of the primary strategies for achieving sustainable steam generation is shifting from fossil fuels to renewable energy sources. Some viable options include:

a. Biomass: Biomass steam generation utilises organic materials such as wood chips, agricultural and food residues, or dedicated energy crops to produce steam. By burning biomass, carbon emissions are reduced as the process releases only the carbon that the plants absorbed during their growth.

b. Concentrated Solar Power (CSP): CSP harnesses the power of sunlight to generate steam through the use of mirrors or lenses that concentrate solar energy. This method provides a sustainable and emission-free source of heat for steam generation.

c. Geothermal Energy: Geothermal steam generation utilises the natural heat from the Earth’s core to produce steam. This renewable energy source is abundant and can power steam turbines without relying on fossil fuels.

d. Electric: Decarbonising the power that generates steam is, of course, a critical step. The usual method here is to switch from gas-fired to electricity, whether with a new boiler once the existing equipment reaches end-of-life or by retrofitting the burner. Electricity generation itself is rapidly changing to relying more on renewable sources, but in the near term, using electricity will incur more operational costs than gas. That isn’t stopping organisations from acting now, with the UK’s National Health Service recently negotiating a new energy supply deal to ensure 100% renewable electricity across its building portfolio. By procuring renewable electricity, they can also remove the scope 2 emissions associated with electricity use.

ENERGY EFFICIENCY AND WASTE HEAT RECOVERY

Improving energy efficiency in steam generation systems is essential for sustainability. By implementing energysaving practices and technologies, we can reduce energy waste and enhance overall system performance. Key strategies include:

a. High-efficiency boilers: Modern, wellmaintained boilers with advanced combustion and heat transfer technologies can significantly improve energy efficiency and reduce fuel consumption.

b. Waste Heat Recovery: Capturing and utilising waste heat from steam generation processes can be employed to preheat feedwater, generate additional steam, or provide heat for other industrial processes, thereby maximising energy utilisation and minimising waste.

COMBINED HEAT AND POWER (CHP) SYSTEMS

CHP systems, also known as

cogeneration, are an effective way to achieve more sustainable steam generation. By simultaneously producing electricity and useful heat from a single fuel source, CHP systems can achieve higher overall energy efficiency and reduce greenhouse gas emissions. Steam turbines integrated with CHP systems can generate electricity while harnessing the waste heat, providing a sustainable solution for various industries.

CARBON CAPTURE AND STORAGE (CCS)

In cases where fossil fuels are still used for steam generation, implementing Carbon Capture and Storage (CCS) technology can help reduce or remove carbon emissions. CCS involves capturing CO2 emissions from steam generation processes and storing them underground, preventing them from entering the atmosphere and contributing to climate change.

CONTINUOUS MONITORING AND OPTIMISATION

Regular monitoring, analysis, and optimisation of steam generation processes are crucial for maintaining efficiency and identifying areas for improvement. Advanced monitoring systems and predictive analytics can help identify inefficiencies, optimize operations, and minimize downtime, leading to more sustainable steam generation practices. Sustainable steam generation is a vital component in our journey towards a greener and more sustainable future. By embracing renewable energy sources, improving energy efficiency, utilising waste heat, generating steam from carbon zero sources and exploring technologies like CCS, we can significantly reduce greenhouse gas emissions and mitigate environmental impact. Emphasising continuous monitoring and optimisation ensures that steam generation processes operate at their peak efficiency. Through these concerted efforts, we can harness the power of sustainable steam generation to propel us towards a cleaner, more sustainable world for generations to come. To find out more on making the most of steam in your sustainable future go to: spiraxsarco.com/advance

FOCUS ON DELIVERING VALUE TODAY

FOR A SUCCESSFUL AND SUSTAINABLE TOMORROW

To engineer a more efficient, safer and sustainable world you need the right steam and thermal energy partner. Whatever your key drivers, Spirax Sarco have you covered.

MICROGRIDS ARE THE FUTURE OF GREEN ENERGY SELF-SUFFICIENT GRIDS REDUCE STRAIN ON TRADITIONAL ENERGY NETWORKS

As of 2022, the International Energy Agency (IEA) estimates that by 2027 the world will have added as much renewable power as it did in the past 20 years — a staggering 85 per cent acceleration from the five previous years. This boost, primarily from reforms by the United States, the European Union, China, and India, means that by 2027, renewables could account for up to 90 per cent of global electricity capacity expansion.

To support this growth, the challenges that come with renewables must be addressed. By nature, renewable energy is climate dependent and greener sources tend to be more unpredictable and intermittent — generation fluctuates with the natural shift in availability of sun, wind, and waves. This makes energy storage essential in ensuring consistency and reliability. Microgrids are also gaining interest as a solution to support the future of energy and to alleviate strain on existing power infrastructure. Moving away from centralised power plants to localised, distributed networks with microgeneration offer a host of benefits, both on an individual or community scale, and in the wider context of the global energy transition. Having an independent, self-sufficient grid in proximity to the area it serves mitigates the loss of the around eight to fifteen per cent of electricity that dissipates when it is transported from a central power station via a distribution network in a traditional grid. This inefficiency is addressed by having the power source and generator geographically close together, meaning that more

of the power is accessible to the user. Microgrids are inherently more flexible, with greater resilience to instability or problems with the central grid. They can also allow for faster and more effective recovery when issues do arise. Not only are they more resilient in the first place, microgrids are reliable in keeping the power on in the event of an outage. Through ‘islanding’, microgrids detect when the supply from the main network is disrupted and switch seamlessly to the local power source. A crucial example of where this is beneficial is in times of disaster or conflict, when power supplies may be affected, or central stations compromised.

Microgrid users are also protected against unexpected peaks in the energy market, and the enhanced control over a microgrid allows effective budgeting and regulation of energy supply against demand. Using battery energy storage systems (BESS) can reduce costs even further by countering the variability in energy price fluctuation, with users able to configure their energy use and BESS charging around capacity requirements.

In terms of the green transition, microgrids will encourage more people to utilise distributed sources of power, increasing the generation capacity of renewables overall. Thanks to the smarter capabilities of microgrids and the integration of BESS, users are able to blend a range of power sources

Uncertainty in the energy market and a push for renewables is driving an expansion in microgrid deployment, with Navigant Research estimating that there is around 27 gigawatts (GW) of self-contained system capacity either planned or installed worldwide. With growing interest in energy independence, the microgrid market is set to increase to $63.2 billion by 2027, and new innovations will be crucial in supporting their implementation.

Here, Karthik

Velayathum, Chief Technology Officer (CTO) of greentech innovator, Katrick Technologies, explains the importance of microgeneration technology in the energy landscape of the future.

seamlessly, opening the possibility of small-scale energy generation to individuals, businesses and communities that may not have been able to access it before. With renewable capacity already set to accelerate drastically, this technology is an attractive option that allows users to take control over their own energy supply.

As highlighted by Deloitte in 2021, 21st century climate problems cannot be solved by 20th century solutions. So while traditional technologies such as turbines are still a mainstay of renewable energy, innovation is essential to drive the next generation of green power and harness natural resources to their full potential for microgeneration. Solar is already a popular choice for microgeneration applications, with around 1.2 million homes in the UK alone already using them. However, due to factors such as geographical location, planning permission, architecture and the fluctuations in sunlight availability, solar isn’t always suitable for every small site. Using other complementary renewable sources to power a microgrid is highly beneficial in maximising the potential of these systems.

Wind power can be used independently or blended with solar and other sources for microgeneration, but at present the technology to do this on a small scale is limited. Wind turbines are typically very large and require a significant geographical footprint, making them inaccessible to anyone in a populous or industrial area wishing to harness wind power to implement a microgrid. They are also limited to a specific range of

wind speeds and frequencies due to their height and configuration.

Katrick Technologies has developed a novel form of wind power generation that can be integrated into microgrids of varying scales. The hexagonal panels use patented aerofoil technology to convert wind into mechanical vibrations which is then used to generate green energy. The panels, which will be available in various sizes to meet user requirements, are smaller and less obtrusive than turbines, making them easy to integrate and more scalable, as an installation can contain as many panels as necessary depending on the energy needs of the microgrid.

The technology is modular and flexible, able to be located in a wide range of environments and able to capture a larger range of winds than traditional turbines. Compatible with BESS and easy to install, the wind panels will be an alternative option for microgrid users wishing to harness wind power but limited by the challenges of traditional

turbines, such as size, cost, and location. The panels are generating interest for their potential in energy generation, with Katrick Technologies recently meeting with Ofgem, National Grid and the Energy Networks Association to discuss funding opportunities to bring behind-the-meter and off grid solutions to the energy market via the implementation of the panels.

This innovation offers affordable, low maintenance solutions to renewable energy generation for greater flexibility and independence. The journey towards carbon neutrality and more sustainable power generation is certainly picking up pace. As innovation makes microgeneration more accessible, microgrids offer a way to reduce reliance and stress on the grid, and help to pave the way to a greener, brighter future.

To find out about Katrick Technologies modular wind power generation technology, visit the website https://www.katricktechnologies.com/

BUILDING A MICROGRID IN BRISTOL

Is there a more fitting metaphor for the energy transition than a former coal shed and headquarters of a gas company becoming a shining example of smart sustainability?

While Bristol is proud of its heritage, the redevelopment of The Sheds is testament to our changing times. Once a coal shed, then the HQ of the Bristol and Clifton Oil Gas Company, the building is now set to deploy a smart microgrid as part of a pioneering redevelopment for the Bristol Digital Futures Institute.

MAJOR REGENERATION

The project is part of a collaboration between the University of Bristol and its partners to breathe new life into the city’s Temple Quarter. The university is creating the Temple Quarter Enterprise Campus, which will be home to 4,600 students and 650 university staff who will come together with business and community partners to tackle some of the world’s greatest challenges. The first occupant of the campus is Bristol Digital Futures Institute (BDFI) who are pioneering a different approach to digital technology innovation, bringing together technological and social expertise from across the University of Bristol and partners in academia, industry, government and local communities.

Nestling behind Temple Meads Station, the 200-year-old Coal Shed and Retort House are being reimagined to include unique specialist digital research facilities, workspaces, collaboration areas and a

substantial data centre. As part of the development, BDFI received a £2.5 million Net Zero grant from Research England’s UK Research Partnership Investment Fund to reduce carbon emissions from the site. The grant will also provide a research testbed and enable BDFI and researchers from across the university and sustainability teams to explore how research facilities can incorporate and optimise such measures to deliver their ambitious net zero targets.

Matthew Lumsden, CEO of Connected Energy, said: “Our brief was to support BDFI in their vision to power the building using the greenest energy available. As the site is home to a large data centre, which is operating 24/7, the ability to store energy was critical in helping to meet this vision.”

INTELLIGENT MICROGRID

The solution was two E-STOR systems from Connected Energy, a leading provider of battery energy storage systems (BESS). Each E-STOR has a 360kWh capacity and an intelligent management system that is designed to provide the fulcrum between the grid, on-site renewables, and the premises. This enables BDFI to power the building using the greenest energy available. Connected Energy’s management system controls the storage and discharge of energy at the most optimum times of the day.

“The addition of battery energy storage enables BDFI to reduce the carbon intensity of its energy consumption to its lowest possible point,” added Matthew. “E-STOR stores greener power throughout the day – either from the solar array or the grid – to be used at times when renewable generation is low and the energy available from the grid is not at its cleanest.”

Dr Jenny Knapp, Director Programmes & Operations at Bristol Digital Futures Institute,

said: “The University hopes that the microgrid and its battery energy storage will help us to maximise our use of clean power. The project is not only driven by these net zero ambitions but also the opportunity to use our site and the microgrid system as a research facility and share our learning with other data centres and research facilities more widely.”

SECOND LIFE BENEFITS

Connected Energy was chosen for the project because of its unique approach to energy storage systems. Rather than use new batteries in its E-STOR units, the company repurposes batteries from endof-life electric vehicles (EVs). These batteries can still have up to 80% of their original energy storage capacity, making E-STOR an ideal way to give them a second life. In this way, E-STOR is much less carbon intensive than systems that use new batteries.

As part of the project, Connected Energy is working closely with the university to ensure that its systems support ongoing research and software modelling of microgrids. The company’s data team is working with PhD students to evaluate the systems. Furthermore, Connected Energy has also provided a second life battery to the University’s Energy Futures Lab which will be involved in simulations of different scenarios relating to optimising battery performance.

“The use of second life batteries in the Connected Energy systems was integral to our overall goals by immediately demonstrating carbon savings when compared to a system which uses new batteries,” added Dr Knapp. “Connected Energy also understood the importance of the research element of this project and have been open with their contributions and support towards this.” www.connnected-energy.co.uk

A battery energy storage system can go beyond storing and supplying electricity to act as the “brains” of a smart microgrid. Connected Energy’s work with Bristol Digital Futures Institute is a great example of how this added intelligence can optimise energy sustainability.

HOW TO BEAT THE SUMMER HEAT

Summer arrives, the weather warms, flowers bloom, all is good with the world! But, for students in our universities, it’s exam season mid-May to mid-June. Four weeks of cramming. Then, Relax! Nothing more can be done. Pack the car, and head off for a well-deserved break, away from it all. A long summer to recover, before for some, it will all begin again in September.

While there are no students around, accommodation providers take the opportunity to deep clean, maintain and refurbish their properties.

I work very closely with suppliers of student accommodation. There are close to 1.7million rooms nationwide, a formidable community. Spread across the country, they number a population twice that of Birmingham.

It takes a lot of energy to maintain comfortable environments for this many rooms, and the pressure on providers to meet net-zero and decarbonisation targets is immense.

The burning issue is that generally, the people consuming the energy are not directly responsible for paying the bill. In my experience this is apparent in the way the temperature of rooms is regulated. With little or no control on many heaters, the thermostat is set to maximum, where

it will remain all year. Should it become too hot, the window is opened for airflow while ‘the heater rotates the meter’!

For Energy Managers this is frustrating, to say the least. The budget for energy use is their responsibility but they have no control over consumption.

I was particularly excited a few weeks ago, when a customer shared with me data showing energy use from 2017 to present day. It was interesting because UWE had installed a Building Energy Management System during the pandemic. The reason for my excitement is that it showed ‘before and after data’ which is very difficult to come by as a third party.

The BeMS replaced a reasonable control system that had been installed when the campus was built in 2006, but fresh pressure, on reduction of energy use, led to a search for even greater control, hence the Irus installation.

With a cursory glance, the figures told a predictable story of month-on-month energy savings.

Digging deeper into the heating season of October to March, I took a 3-year average consumption, 2017-2019, to mitigate for unusual weather peaks and troughs. I then compared this with 2022, (ignoring 2021 as it was disrupted by lockdowns and unusual occupancy patterns). The total reduction

is 22%. Project this forward to the coming year, with a tariff of 16.5 pence per kWh, and this amounts to a significant £147,819.

Savings can be attributed to PIR detection of occupier absence from rooms and the reduction of input when windows are opened. If the control that was replaced hadn’t had the pre-set 45-minute boost button time feature, I estimate the saving would have been closer to 30%.

But the surprising element that emerged from this complete dataset was what happened in the non-heating season, specifically May through August. During this 4-month period, the weather is warmer, and less heating is required. The occupation of rooms is greatly reduced due to the summer holidays and a lot of rooms being empty for most of June-September.

Compare summer consumption (201719) with 2022 and worst case 45,476kWh, and best case, 72,346 kWh of completely unnecessary energy use was avoided.

Most attention is rightly focussed on the autumn and winter seasons, but it pays dividends to be aware of energy being used during warmer months. With a centrally controlled system that is easy to universally adjust, summer profiles can be tweaked, resulting in even greater savings. www.prefectcontrols.com

Adrian Barber from Prefect Controls, looks at the surprising energy savings that can be made in student accommodation during the ‘non-heating’ months of May to September.

THE UK’S ELECTRIC GRID – CAN IT REALLY COPE WITH NET ZERO?

As part of the recent “Powering Up Britain” Govt document, wider electrification was specified as a key strategic aim in decarbonising the UK. Future domestic & commercial & industrial energy will be provided through several ways, one method of decarbonisation will focus on producing sustainably sourced and cheap electricity for UK customers.

There is a series of logical steps if NetZero is to be achieved by 2050. If the UK is going to proceed with decarbonisation through electrification, then providing the electricity for the mass use of electric vehicles will be key. To power an Electric Vehicle (EV) requires the widespread availability of charging points across the UK. There are over 33 million vehicles on the UK’s roads, the majority of which will require electricity.

Can current National Grid capacity cope with increase of electric vehicles AND the demand surge for domestic, commercial and industrial usage facilitated through wider UK electrification?

A BBC article published just recently has revealed that clean energy projects are being put on hold due to a lack of electrical grid capacity. Some renewable energy companies believe this lack of electrical grid capacity could potentially negate the progress of UK NetZero targets.

It has been estimated that the UK requires five times more solar power and four times as much wind generation than what is being presently manufactured. All of which will need to be connected to the national grid. The BBC report estimated that £200 billion of clean energy projects are waiting to be connected with 40% of these projects facing at least a year of further procrastinating.

UK decarbonisation aims are centred on the dispersal of clean and cheap electricity. However, relying on renewables in the short term to completely satisfy national energy supplies is not risk adverse. Renewable power yield relies on weather conditions that seasonally fluctuate.

Although possible, there are still theoretic and technical challenges that require addressing before the UK electric grid can be considered capable of handling both wider national electrification and the inclusion of EV’s on UK roads.

Electricity is generated through various renewable and non-renewable practises such as wind, solar, tidal, nuclear and natural gas. Although UK energy policy makers are keen on reducing and eventually phasing out fossil fuel usage altogether, natural gas has been recognized as a key

decarbonising transitional fuel source, as it is used in times of low wind yield to produce electricity (wind being the second highest contributor to UK electrical generation at 25%).

UK policy makers have identified cheap and sustainable electricity as a main contributor to national decarbonisation efforts. As a result, the UK’s electrical capacity grid will have to be expanded. ‘Powering up Britain’ also states that energy independence can be achieved through potentially doubling Britain’s electrical capacity by 2030 whilst ensuring cost effective electrified power.

To provide continuity to UK home market energy supplies, a baseload of power is dispersed to communities throughout the UK. A baseload of power ensures that the minimum requirement of national demand is constantly met. Baseload energy demands are satisfied via energy sources that are cost effective and readily available, such as natural gas.

Dispatchable power are separate sources of energy that are utilized in times of peak demand. Throughout the calendar year the UK power grid will experience times of pressure where it is a necessity to incorporate additional energy to cope with demand and output.

Current capacity of the UK electrical grid stands at 334.2 TWh (terawatt-hour: a unit of energy equal to one trillion watts for one hour). It is estimated that with the inclusion of electric vehicles will create an additional 100TWh demand increase. That, in rounded terms, means an increase of about one third of current levels.

The UK electrical grid is designed

Rinnai’s Chris Goggin explores how wider electrification of the UK domestic & commercial energy mix could influence decarbonisation efforts and customer choices of heating and hot water appliances. Will Britain’s national electrical grid hold the capability of handling extra demand?

to coincide with seasonal and daily peak times of demand. For example, in a seasonal context the demand for electricity is far higher in January then it is in July. Daily electrical demand rhythms are similar – evening demand is far higher than in mid to early afternoon.

Developments in technology, energy efficiency and inclusion of renewables mean that the UK electric

grid needs to be positioned to deal with further output demand created by the anticipated but not guaranteed widespread EV adoption across the UK. Work will also continue to develop V2G (vehicle-to-grid) technology that allows electric car owners to send excess un-used electricity back to the grid when demand is high further creating grid flexibility.

Inter-continental grid connections to countries such as France, the Netherlands, Ireland, Belgium and Norway are connected to the UK through sub-sea cables. This means the UK grid can access power from other nations in times of high demand and system stress, as well as import and export at financially beneficial rates.

The recent “Powering Up Britain” paper stated the UK government’s aim to accelerate delivery of strategic transmission upgrades by at least three years with the specific aim of reducing delivery time in half to UK customers. The Electricity Networks Commissioner will be advising the UK government on how to accelerate grid delivery and will present recommendations to ministers in June.

Rinnai understands the complexity of UK decarbonisation efforts and we are committed to informing UK customers on the detail and impact of current and future energy policy as well as shifts in the energy landscape that could affect customer cost.

Rinnai’s H3 range of decarbonising products include hydrogen / BioLPG ready technology, hybrid systems, and a wide range of LOW GWP heat pumps and solar thermal. Also, within Rinnai’s H3 range is Infinity hydrogen blend ready and BioLPG ready continuous flow water heaters which are stacked with a multitude of features that ensure long life, robust & durable use, customer satisfaction and product efficiency.

Rinnai’s range of decarbonising products – H1/H2/H3 – consists of heat pump, solar, hydrogen in any configuration, hybrid formats for either residential or commercial applications. Rinnai’s H3 range of products offer contractors, consultants and end users a range of efficient, robust and affordable decarbonising appliances which create practical, economic and technically feasible solutions. The range covers all forms of fuels and appliances currently available – electric, gas, hydrogen, BioLPG, rDME solar thermal, low GWP heat pumps and electric water heaters.

Rinnai H1 continuous water heaters and boilers offer practical and economic decarbonization delivered through technological innovation in hydrogen and renewable liquid gas ready technology.

Rinnai’s H1 option is centred on hydrogen, as it is anticipated that clean hydrogen fuels will become internationally energy market-relevant in the future; Rinnai water heaters are hydrogen 20% blends ready and include the world’s first 100% hydrogenready hot water heating technology.

Rinnai H2 – Decarbonization simplified with renewable gas-ready units, Solar Thermal and Heat Pump Hybrids. Rinnai H2 is designed to introduce a practical and low-cost option which may suit specific sites and enable multiple decarbonisation pathways with the addition of high performance.

Rinnai H3 – Low-GWP heat pump technology made easy – Rinnai heat pumps are available for domestic and commercial usage with an extensive range of 4 – 115kW appliances.

Rinnai’s H3 heat pumps utilise R32 refrigerant and have favourable COP and SCOP.

Rinnai is a world leading manufacturer of hot water heaters and produces over two million units a year, operating on each of the five continents. The brand has gained an established reputation for producing products

that offer high performance, cost efficiency and extended working lives.

Rinnai’s commercial and domestic continuous flow water heaters offer a limitless supply of instantaneous temperature controlled hot water and all units are designed to align with present and future energy sources. Rinnai condensing water heaters accept either existing fuel or hydrogen gas blends. Rinnai units are also suited for off-grid customers who require LPG and BioLPG or rDME.

Rinnai products are UKCA certified, A-rated water efficiency, accessed through multiple fuel options and are available for purchase 24/7, 365 days a year. Any unit can be delivered to any UK site within 24 hours. Rinnai offer carbon and cost comparison services that will calculate financial and carbon savings made when investing in a Rinnai system. Rinnai also provide a system design service that will suggest an appropriate system for the property in question. Rinnai offer comprehensive training courses and technical support in all aspects of the water heating industry including detailed CPD’s. More information can be found on Rinnai’s website and its “Help Me Choose” webpage. Visit www.rinnai-uk.co.uk

Rinnai’s H3 decarbonisation offers pathways & customer cost reductions for commercial, domestic and off-grid heating and hot water delivery

NET ZERO ACTION PLANS –HOW TO MAKE THEM HAPPEN

David Lloyd, General Manager of Connected Energy Performance at Johnson Controls

Scaling up for sustainability as deadlines loom is a challenge of huge proportions, but there is much cause for optimism as we work to unlock the benefits of a decarbonised world. Awareness of the value of ESG metrics is on the rise, with 93% of investors now considering the net zero agenda fundamental to their real asset investment decisions. Climate action is now not only vital for our future on the planet, but is fast becoming a ‘must have’ rather than ‘nice to have’ for strategic success. Sure enough, we are now seeing businesses take note as they set ambitious public targets for decarbonisation. But where pledges are made, they must be supported by clear strategies for action.

With 2030 on the horizon, time is ticking to cut carbon emissions by 45%. To reach ambitious targets we need equally ambitious strategies for action. It’s about reimagining what is possible. And in a

world where 40% of global emissions originate from the built environment, we need a buildings revolution that capitalises on the best people, processes and tech available. So, one question remains: how do businesses know which strategies they should implement to reach net zero, and how?

BUILDING CONFIDENCE TO DRIVE INVESTMENT

Investment into net zero initiatives is relatively new territory for many businesses. So, proving ROI to board members can be complex. Many organisations will not have implemented large-scale projects before, with no track record to prove payback. It poses the question: how can sustainability leaders increase confidence in green investment decisions without evidence of prior success?

The truth is that energy reduction and optimisation will aggregate positive effects quickly. Improvements to technology can start from local solutions – for example, switching from gas boilers to air source heat pumps, installing solar panels, and implementing LED transformation. These simple switches can translate to a 50% reduction in cost, with on-site energy production and the use of LEDs able to offset the increase in electricity use. Investors and businesses leaders alike can take comfort in seeing these short-term gains. New technologies – such as heat pumps – can deliver CO2 savings of up to 70% in comparison to traditional electric heating. And where legacy infrastructure is updated, smart buildings can aggregate data to build a picture of likely cost savings in the long-term. Ascertaining the right path to netzero can seem overwhelming when faced with such a wealth of technology - especially when every building has different needs. Here, leaders should seek out insights from expert partners who will be able to determine what is realistic for their organisation specifically

and map out exactly what the route to decarbonisation will look like.

DATA DRIVES UNDERSTANDING

Digital technologies play a pivotal role in forming a detailed picture of an estate’s carbon footprint, enabling the energy needs of factories, warehouses, and offices to be tracked and monitored. Knowledge is power – a wealth of data ensures the unique needs of every building are clearly understood. Thus, feasible net-zero plans become far easier to create and implement. AI platforms transform the way in which we view buildings, making it easy to scan across entire estates to pinpoint inefficiencies and advocate the corrective action needed to fix them.

One way the route to decarbonisation can be accelerated is by utilising ‘single pane of glass’ digital platforms. These enable businesses to keep a close eye on expenditure whilst meeting green goals; optimising building performance whilst ensuring cost savings. In addition to this, with the regulatory demand to report on Scope 1, 2 and 3 emissions becoming increasingly pressing, technologies for visualisation are essential. Reporting on, and perceiving the complexity of, such emissions can be a challenge without the help of digitisation.

THE SHORT-TERM AND THE LONG-TERM VIEW

Many businesses have started to move towards science-based targets such as B Corp certification and CDP scoring, but still need to make more significant steps towards strategies that are fully integrated. For example, the immediate ROI to reduce bills amid the energy crisis by turning down heating appears beneficial on a base level but has minimal impact on wider net zero initiatives. So, clarity in direction, as well as education on what truly progresses the net zero agenda, will ensure effective implementation of long-term strategies.

There are immediate changes businesses can make, too. Innovations such as Central Utility Plant (CUP) technology use predictive algorithms to anticipate future scenarios and identify opportunities for cost reduction. Lack of education means that many businesses simply aren’t aware of the ‘quick wins’ that are available to them.

Successfully implementing green initiatives is complex. Truly laying the foundations for change involves the creation of detailed action plans that match pledges made. For example,

available specialists in the industry will encourage board-level investment, but such creation of talent takes time. The World Economic Forum’s Future of Jobs report found that in demand skills across jobs are changing, with 40% of workers requiring up to six months to reskill. One thing is clear: change needs to happen now rather than later.

THE INDUSTRY NEEDS NEW SPECIALISTS

Companies have started to drive forward upskilling and reskilling initiatives amid an abundance of skills gaps and shortfalls in headcount. Increasingly, organisations are looking to recruit staff with demonstrable expertise in sustainable engineering and ESG compliance. The burgeoning need for skills in specialised areas such as heat pump and solar technologies is ever-increasing.

For wide-reaching organisational change, enterprises need industry expertise that is embedded in their workforce. Businesses face pressure as growing demand for experienced consultants and auditors exceeds supply. And, designing achievable goals for the environment as well as the business is no small feat when they are in the dark. Then, once new technologies are installed there exists a lack of experienced engineers to build, monitor and maintain necessary systems.

So how can companies instigate these changes in meaningful ways? They need to adopt ways of working that are companywide, reviewing processes in full to facilitate practical delivery. Further to this, they must ensure workforce buy-in. With buy-in, as well as the right tools and information at their disposal, employees will be equipped with the tools to drive forward success

in any transitional programme.

The demand for green talent is only likely to grow given that the UK’s net zero economy is expanding exponentially. It is currently valued at £70bn; and will likely exceed this value in future, a recent report has found. The report also observes the need for talent across the UK; particularly if the levelling up scheme is to be achieved across key UK regions and cities. The recruitment of top green talent, as well as investment in learning and development for the future, demands a pre-emptive approach. Leaders don’t have to make this transition alone. They can consider partnering with organisations that are already ahead of the talent curve.

THE ROAD AHEAD

So, what is truly needed to successfully drive the net zero agenda forwards? First and foremost, it is vital that businesses start to implement emerging technologies now to reap both short-term and long-term benefits. Rich data allows a building’s energy usage from a macro level to be fully understood and allow leaders to make strategic decisions that are driven by a wider net-zero agenda.

Secondly, closing the green skills gap will allow businesses to draw out achievable routes to net zero, implementing and maintaining new technologies for years to come. Finally, as leaders navigate this ever-evolving landscape, collaboration will be key. By working together with industry partners, businesses can find the most costeffective and climate-friendly solutions to suit their needs. With the right people, processes, and technology in place, leaders can deliver net-zero strategies with longevity for generations to come.

https://www.johnsoncontrols.com/

SCIENCE BASED TARGETS: THE THORNY ISSUE OF SCOPE 3 EMISSIONS AND THE SUPPLY CHAIN

The UK government is legally committed to achieving Net Zero by 2050, yet there is a lack of clarity on government support for the businesses who must implement this commitment and drive the necessary changes – with the High Court deciding last year that the UK’s Net Zero Strategy was unlawful. As late as this March, on “energy security day”, the government admitted that there was “a judgement to be made whether the policies identified at this stage are sufficient”1, much to the concern of Net Zero experts and energy specialists. UK companies, along with corporations worldwide, are leading the uptake of committing to emission reduction through the adoption of Science Based Targets – those which are in line with the latest climate science’s determinations on what is needed to meet the goals of the Paris Agreement.

Notably, Science Based Targets –defined and validated by the Science

1 https://www.ft.com/content/c70d8e9e-e815400b-a059-bbb78795f711

Based Target Initiative (SBTi)

– have shifted the focus from potential reduction in greenhouse Gas (GHG) emissions to the actual level required: from what is possible to what is necessary. This change of emphasis echoes the responsibility that businesses are taking on themselves in setting targets and managing their own Net Zero strategies.

Although the process for setting Science Based Targets involves resource commitment, there are clear business drivers for companies to engage with SBTi. As Net Zero transforms the way business is done, spearheading innovation, companies signal their own position and can make the most of opportunities while also keeping ahead of regulatory requirements. A focus on emission reduction makes for greater competitiveness in being a part of the Net Zero innovation conversation and in reducing energy costs. Stakeholders – whether investors, board members, customers, or employees – increasingly demand a commitment to Net Zero, signalling the reputational benefits of a structured, Science Based, approach.

Considering the different emission sources – Scope 1, 2, and 3 – SBTi admit that Scope 3, indirect value chain, emissions are both the hardest

to quantify and the greatest source of emissions for most companies2 Where companies set science-based targets, emissions must include Scope 1 and 2, and where Scope 3 represent more than 40% of a company’s overall emissions, the target must include these, also. Given the prevalence of Scope 3 emissions, currently around 96% of companies with approved targets include Scope 3. Indeed, a recent SBTi survey into Scope 3 emissions3 found that Scope 3 emissions represent more than 70% of GHG inventories.

Prevailing thought on tackling Scope 3 emissions, from sources including PwC, Deloitte, and McKinsey, highlights the importance of collaborating with suppliers, incentivising them to decarbonise

2 https://sciencebasedtargets.org/blog/scope3-stepping-up-science-based-action

3 https://sciencebasedtargets.org/resources/ files/SBTi-The-Scope-3-challenge-surveyresults.pdf

Science Based Targets have become the gold standard for global businesses looking to address their role in climate change.

Solon Mardapittas, CEO at Powerstar, looks at Scope 3 emissions, the impact on the supply chain, and some practical steps British companies can take to demonstrate their own commitment to Net Zero.

their own organisations, and making supply chain decarbonisation a key factor in procurement. As one example, PwC list four strategies to engage suppliers: leveraging procurement; building capability; rewarding progress and enforcing performance.4

For companies supplying to businesses already working to SBTi targets, the incentives to tackle their own emissions are clear. Looking to energy management as a quantifiable opportunity to decarbonise, there are a range of options, including some quick wins. Readily available data on energy consumption can also be used to demonstrate both progress and commitment.

As a supplier, investing in renewables is an obvious way to tackle your own emissions, as is switching to an Electric Vehicle (EV) fleet. Although these won’t reduce your own Scope 3 emissions, they will clearly impact on your customers. However, implementing these changes may well affect your own business. On-site renewables are by their nature inflexible, reliant on weather conditions. Sometimes, those weather conditions won’t be optimal, and your on-site generation may not meet site demand. Alternatively, generation could be much higher than the site requires. While this can be solved by buying and selling energy from the grid to make up the differences, this runs the risk of undermining carbon reductions efforts.

To ensure that reliable power is there when business process and production demands, a Battery Energy Storage System (BESS) is a vital addition to energy infrastructure, storing renewable energy as generated for use when needed. Unlike traditional Uninterruptible Power Supply (UPS) systems that companies have generally relied on to protect specific essential equipment in the event of power disruption, a BESS offers site-wide protection with 95% lower losses. The flexibility of a BESS in managing renewable / grid supply, together with its capability to buffer large loads – particularly relevant for EV charging – raises it above the level of a sunk cost (as is a traditional UPS) transforming it into a valuable asset.

Switching to an EV fleet presents significant challenges for any organisation, given the potential to overburden the network, and constraints on capacity are a real issue when negotiating with a Distribution Network Operator (DNO). Rapid EV charging is reliant on a power supply that can

4 https://www.pwc.com/us/en/services/esg/ library/scope-3-emissions.html

support a sudden load – between 50 and 300kW. Analysis from Deloitte5 indicates that the installation of Rapid chargers will overtake Fast charging by 2030, leading to significant infrastructure and grid constraint issues and they cite the Climate Change Committee’s predictions on the investment level needed, while also pointing to the role that battery storage will play in the UK’s journey to Net Zero,

“The CCC estimates that new investment needed in the distribution network for both EVs and electrified heat would require up to £50 billion by 2035, or about £1.8 billion per year. This is about four percent of the total cost of the electricity system… The deployment of key technologies – for demand management and battery storage – can create flexibility within the system, which could reduce the investment required for these reinforcements by around 10 percent to 2035.”

Where a company has its own BESS, this can charge slowly from the grid or from on-site renewables to then discharge that energy for EV charging. This can play a major role in making the switch to an EV fleet feasible, most notably where an application to the DNO for a larger grid

5 https://www2.deloitte.com/uk/en/pages/ energy-and-resources/articles/uk-ev-charginginfrastructure-update-show-me-the-money. html

connection may be rejected outright if it is deemed to impact on overall grid supply, or where it may be prohibitively expensive. Even where companies’ applications to the DNO are not refused, the current waiting times may well impact on implementation timescale.

Where a BESS is part of a smart microgrid, it can provide both greater efficiencies as well as vital data for customers focused on Scope 3 emissions. Energy management and monitoring software makes real-time decisions to predict trends and manage energy on-site while providing detailed site, grid, and asset information. Improving energy security – being able to operate in isolation from the grid – a microgrid’s control system optimises the use of available energy resources to ensure the best use of renewable assets, leading to both cost savings and carbon emission reduction.

Ultimately, the calculation and elimination of Scope 3 emissions is, undoubtedly, challenging. However, for suppliers looking to enhance their reputation with customers, there are technologies that signal their own commitment to Net Zero while offering significant benefits for energy security, affordability, and sustainability.

W: www.powerstar.com

E: info@powerstar.com T: 0333 230 1327

DID COP27 LIVE UP TO ITS ‘IMPLEMENTATION’ PLEDGE?

WHAT HAPPENED AT COP27?

Some of the key discussions and decisions made over the two-week climate conference, included a new funding arrangement for the loss and damage for some of the most affected and often vulnerable nations. The UK government announced that it would invest £65 million to speed up the development of new green technologies and the US President, Joe Biden, made a speech in which he stated that the US would be taking action in cutting planetheating emissions. Brazil’s Presidentelect, Lula Da Silva, also made a speech at the event, pledging to make Brazil the host of COP30, with the venue of the event to be the Amazon rainforest.

However, the conference did not spark conversation for many outside of the climate change industry, with the media coverage limited and some of the most significant issues not even making the front page. One of the biggest controversies of the event were that many of the delegates were from the fossil fuels industry, with over 600 of them showing up to protect the interests of oil and gas.

As the fortnight drew to a close, negotiations went on for much longer than anticipated as not all nations agreed to the phasing out of fossil fuels. The final text was found to be disappointing to many, although a small positive takeaway

was that nations did not lose any of the commitments made from previous COPs.

So, despite COP27 billed as the implementation COP, the event was overall very quiet with no groundbreaking announcements from nations. In fact, for much of the general public, the conference went by without them knowing it was taking place.

ARE NATIONS COMMITTED TO CHANGE?

Following on from the event, there has been several reports from prominent climate change bodies, which have highlighted the continued impact of the climate crisis, and what nations must do to reduce and prevent damage caused by climate change.

In March 2023, the Intergovernmental Panel on Climate Change (IPCC) released The Synthesis Report exploring the impact of global warming and the resulting extreme weather events. The report states that we cannot achieve the goal of keeping global temperatures below 1.5C if we continue with the current policies that are in place. This makes it clear that it is more important now than ever for nations to enhance their response to climate action.

So, what are nations doing to change our current trajectory? In

March the UK government published a series of reports, policies and consultations as part of Green Day. These announcements included: Committing to a review of Scope 3 Greenhouse Gas emissions reporting to better understand costs and benefits of producing this data which is currently seen as an ‘information gap’. As part of measures to address carbon leakage, there will be a consultation into whether there should be a Carbon Border Adjustment Mechanism (CBAM), effectively an import tax, on products in sectors subject to the UK ETS.

• To position the UK as a global hub for voluntary carbon trading, the Government will work to improve the integrity of voluntary carbon markets (VCMs), to support their growth and protect against greenwashing.

• A new forum will be established to coordinate regulators; including Ofgem, the Environment Agency, and the Competition and Markets Authority, on the signals they are sending to businesses and investors about the net zero transition.

When COP27 was announced it was billed as the COP that would be dedicated to executing the decisions made by nations. Ensuring that leaders and policy makers move from setting goals to implementing them, as the impact of climate change increases. TEAM Energy’s Energy Consultant, Tom McLeish explores what COP27 has achieved since the event 6-months ago.

Although some announcements made were welcomed by climate change experts, many commented that it simply is not enough to meet the UK’s target of net zero by 2050.

In addition to Green Day, the Department for Energy Security & Net Zero (DESNZ) announced the launch of the Energy Effiency Task Force, co-chaired by Lord Callanan and Natwest CEO, Alison Rose, which will support the country in reducing energy demand by 15% by 2030.

The US has also made their own commitments with congress passing the Inflation Reduction Act last summer which will invest $368bn to support clean electricity. As well as supporting developing nations in taking stronger action against climate change by committing to providing $1 billion to the Green Climate Fund and requesting $500 million for the Amazon Fund and related activities.

Last month, President Biden held the Major Economies Forum on Energy and Climate (MEF) where the US and other nations discussed decarbonising energy, ending deforestation, tackling potent non-CO2 climate pollutants,

and advancing carbon management by partnering with other countries to accelerate carbon capture, removal, use, and storage technologies.

During the MEF, Canada, the EU, France, Germany, Indonesia, the UK, the US and Norway announced a collective zero-emissions vehicles goals. Meaning by 2030, 50% of light duty vehicles sold globally and 30% of medium to heavy duty vehicles would be battery electric or plug in hybrid. Nations also launched the Methane Finance Sprint which aims to scale up methane finance, including $200 million in new public support for methane activities by COP28 in December 2023.

COULD COP28 MARK A STEP CHANGE FOR NATIONS?

This year’s UN Climate Change Conference will be in Dubai, a choice that has sparked controversy, as the UAE continues to be a major oil distributer. However, the country has set a goal to be carbon neutral by 2030, in addition to commitments under the Paris Agreement.

As time continues to run out for nations to make major changes to the way we impact our planet; COP28 will be one of the most important to take place if we want to avoid the increase in the extreme weather disasters that have cost nations billions and people their lives.

This event requires something different than previous COPs, and with the UAE’s COP28 President Sultan Al Jaber promising to approach with a business mindset, this could be one of our last opportunities to set out how nations and the private sector can be the step change needed in climate action.

With COP27 advocating for adaptation and mitigation, COP28 needs to play a key role in the acceleration of policies and strategies to reduce global carbon emissions. It is clear is that more needs to be done. With such high expectations for COP28, can the UAE provide the pivotal change and key commitments that are needed from world leaders?

www.teamenergy.com

wide group of people working across all areas of the Public Sector – to educate, train, support and connect as we work towards

THE CRUCIAL ROLE OF GAS IN THE ENERGY TRANSITION

Green energy has made great strides over the past twelve months. Last year, In the EU, wind turbines and solar panels delivered more power than natural gas for the first time. Earlier this month, the UK generated one trillion kWh of electricity from renewable sources, enough to power homes for 12 years. With renewable energy making huge progress, what role does gas have to play in supporting low-carbon energy?

Despite these fantastic achievements, the harsh reality is Britain remains heavily reliant on natural gas for electricity generation, heating and energy-intensive industries. In 2022, over 40% of electricity was generated by burning fossil fuels such as gas or coal.

The government’s Net Zero Strategy and recent “Powering Up Britain” announcement focus strongly on electrification to decarbonise energy, including financial support for heat pumps and electric vehicles. The Net Zero Strategy also predicts that the power demand that electrification will bring will rise by up to 60% as energy production moves away from fossil fuels and towards renewables. The challenges arising from this increase have to be considered, including how quickly capacity can be brought online to meet the new demands.

Although the end destination – a lowcarbon energy system – is agreed, the timeframe and route for achieving this is still up for debate. In the short term, it’s not about gas versus electrification, but a discussion on how to best combine a range of technologies to meet our upcoming energy demands.

HYDROGEN AS A SOURCE OF LOW-CARBON, ON-DEMAND ENERGY

Hydrogen represents a promising solution for decarbonising gas. The existing gas network could be adapted to facilitate the production and transportation of cost-effective, on-demand hydrogen. National Gas Transmission’s Project Union promises to facilitate a low-cost route to net zero by repurposing existing pipelines to create a hydrogen ‘backbone’ for the UK by the early 2030s. If successful, this re-purposing approach will be five times more cost-effective than building a completely new system.

Hydrogen also poses a potential solution to work alongside electrification to bridge the gap for hard-to-abate sectors such as glass, steel and ceramics manufacture, ensuring these sectors’ viability in the global market. The Climate Change Committee predicts low-carbon blue hydrogen, produced from natural gas with carbon capture usage and storage, will play a key role in meeting energy demands until

Victoria Mustard, Decarbonisation Strategy

infrastructure, supply chains and energy codes can fully support renewable sources to produce green hydrogen. Gas networks are already exploring hydrogen as an alternative energy source. The HyDeploy trials have proved that hydrogen blends of up to 20% can be safely blended into the existing gas network without replacing pipes or appliances.

Xoserve is proud to support the Hydrogen for Heating trials, with the first domestic heating trial at H100 Fife in 2024 and then the planned Hydrogen Village in 2025. The information gathered will provide essential data and evidence to support the Government’s decision on whether hydrogen could support domestic heating, which is expected to be made in 2026.

LIMITATIONS OF 100% RENEWABLE ENERGY

Renewable energy from solar and wind is inescapably intermittent and would need tremendous battery storage to maintain demand on overcast and still days or weeks. With battery technology some distance from meeting the scale needed, for now, the UK can’t sustain itself on 100% renewable sources. However, a low-carbon gas network taking advantage of hydrogen and biogas, for example, could provide supportive energy services, such as seasonal storage, domestic heating, or high-temperature heat for industry.

Factoring in the current renewable energy constraints, it’s unwise to say with certainty that a single fuel could provide a net zero system that ensures energy security, guarantees affordability and meets consumer demand by 2050. Instead, the UK’s energy transition

will likely need to include a blend of technologies and fuel sources.

THE FUTURE OF GAS IN A LOW-CARBON ENERGY MARKET

Should hydrogen form part of the energy transition, then developing a new hydrogen market will be crucial to the energy transition – the question is, what would that model look like? Perhaps most importantly, how can the risk of volatility be reduced to minimise the threat of reliving another energy crisis?

Low carbon gas, such as hydrogen, will likely have a crucial role in achieving Net Zero and a smart combination of gas and electricity developed from existing infrastructure will minimise consumer disruption, reduce unnecessary expenditure at the expense of the customer.

The energy industry and policymakers need to start asking difficult questions about the practicalities of decommissioning gas networks or upgrading electricity infrastructure to support any proposed changes. Whichever route is taken to decarbonising current gas demand, it will need to replace the 738TW of energy that natural gas produces on an annual basis, and one thing is certain: there isn’t a one-fuel solution for reaching net zero. www.xoserve.com/

Lead at Xoserve, examines the need for multiple energy sources, which includes natural gas in some form, to support a successful energy transition in the UK.

WHY SMALL CHANGES COULD HAVE A BIGGER IMPACT IN THE ENERGY TRANSITION

Grant Ingram. Programme Director of the MSc in Energy Engineering Management at Durham University.

Much of the focus of tackling the environment has been the geopolitics surrounding it. Whether it’s COP climate change conferences, global sustainable development goals that require all worldwide companies to tackle climate change, or multi-nation signatories dedicated to improving environmental standards, all examples of huge commitments to tackling climate change. But, often the bigger the impact of a policy, the more challenges there are in succeeding.

As human beings we often to underestimate the impact of a large number of small changes. A good example of this is from the aviation world. If you were to describe a passenger aircraft today you might say it is a flying machine with a cockpit at the front, a cylindrical fuselage for the passengers, a wing on each side with an engine slung underneath and a tail assembly for steering. This description would apply equally to airliners from sixty years ago but the machine of today has an astonishingly different performance from the machine from the 1960s.

In terms of pollution: the aviation efficiency (the number of kgs of CO2 emitted per revenue passenger kilometre) has decreased by around a factor of ten since 1960 - but the overall architecture has stayed the same. Improvements in safety have had a similar dramatic trend – in the 1970s there were around 4 fatalities per million passengers today the figure is less than 0.2 fatalities per million passengers – a twenty-fold reduction.

If the external appearance of the airliner is the same what has changed to deliver such an impressive change in performance over the last fifty or so years? The answer is a series of individual changes that alone don’t seem to amount to much but the relentless application of these technologies and techniques has year-on-year improved performance.

To give some examples of those changes imagine that you have a passenger jet from 1973 and one that has rolled off the production line in

2023 side-by-side to compare – there are a few detailed changes you could spot. Bar some tiny changes, such as the shape of the blades at the front of the engine or the shape of the wing tips, there are few noticeable differences.

If you step onto the aeroplane the changes are even less obvious: – internet booking has led to fewer empty seats, the seats you sit in are designed with sophisticated engineering analysis software to ensure the weight is kept to a minimum, they are lighter and (sadly!) closer together than their 1970s counterparts, LED lighting is used throughout the plane which uses slightly less electricity and saves a little weight.

There are some changes you cannot see: many countries change air traffic routes to ensure better fuel burn and hold aircraft on the ground rather than have them circling congested airports before landing. There has been a gradual increase in the use of composite materials in the aircraft –usually starting with a single part of the aeroplane to build confidence in the new material before being adopted in other parts of the aeroplane with modern aircraft having over half the structure made of this material.

Each of these changes on their own would perhaps sound unimpressive but the year-on-year application delivers impressive results in the long term. Not only do they improve the efficiency of aeroplane travel, thereby making flights more affordable as the years go but they also make air travel less harmful to the environment.

The same could be said for many instances in the public sector. There are plenty of examples where numerous small changes in policy, or in products and services too, could have a drastic impact – especially in terms of the environment. These numerous small changes are much more likely to face less pushback, and applied together, could make the public sector more efficient and more environmentally-friendly.

Why should this matter? Human beings are bad at estimating the long-term effect of small changes and often seek solutions that deliver large

BIO

Grant Ingram is the Programme Director of the MSc in Energy Engineering Management at Durham University. He is an expert in sustainable business engineering development, having spent his academic career working with industry in aerospace, power generation and renewable energy. Technology developed in conjunction with his work is now used in aeroplanes around the world and his current research focuses on improving renewable devices.

results quickly – neglecting the hard work of continuous improvement. One example on the small scale is when we “hit the gym” – we look for quick results rather than making small steps to improve our lifestyle. Or at the larger scale when research funding agencies are looking for transformative and not “incremental research”.

Making these small changes to heavily polluting industries is an effective way in which we can tackle the transition to a net-zero world. Often, large-scale changes are seen as too costly or unattainable. It’s difficult to convince businesses, and governments alike, to commit to these huge changes in industry if a market is highly reliant on the current process, and business see a danger to their livelihoods by drastically changing. Instead, a relentless and continuous focus on improvement can reap rich rewards.

This process of continuous improvement is not alien to the public sector – there are many examples that can be found from the NHS to the MoD, and I am not arguing that transformative effects don’t occur, after all there was a time when there were no aeroplanes and the introduction of jet passenger flights has transformed the world. I am simply suggesting that we should recognise and celebrate the small changes that deliver such dramatic improvements in our lives and remember that the longest journey begins with a single step. https://www.durham.ac.uk/

EVEN DURING AN ENERGY CRISIS, THE SECRET TO ENERGY TRANSITION IS STARING US IN THE FACE

Steve Brown, Chief Executive Officer (CEO) at IMServ

Energy Transition has been high on the agenda as the country moves forward with its 2050 Net Zero ambitions and building a low-carbon future.

The horrifying war in Ukraine has however brought a global energy crisis and unprecedented challenges for our energy security during the past 12 months.

With rising energy costs and inflation having a huge impact on households and industry, it would be easy for Government energy policy-makers to focus on short-term goals and lose sight of the bigger Net Zero ambitions.

Despite the pressing need to respond to the volatile market conditions and create better conditions for both consumers and business, it’s also hugely important that we don’t lose momentum and maintain progress on our 2050 target in a responsible, sustainable, and importantly, economically viable way.

What is generally agreed is that if we have any chance of reaching our carbon-neutral goals then we need to take big steps in the next decade.

Unfortunately, there isn’t a technological silver bullet coming to the rescue. Some of the most promising tech, like Green Hydrogen or Carbon Capture, for example, is still some time away from being economically viable. So, in the short term, we need to look at what can be done immediately to reduce emissions while maintaining our energy security and standards of living.

I’m incredibly positive for the future because there is something we can do now to help achieve the Energy Transition we all need and it’s quite a simple word to understand. In fact, the answer has been staring us in the face – efficiency.

So, what is efficiency and how does it relate to energy? If you improve a process and save energy at the same time, that’s efficiency – it’s that simple.

I know efficiency can make an enormous difference in the energy transition and can immediately play a major part in getting us to Net Zero. Throughout my extensive

experience in energy businesses across the world, I have seen how small daily efficiency changes can make huge differences in how energy is both produced and consumed.

Currently, there’s a lot of investment in new tech to help make processes more efficient to support the transition to a lower carbon economy – but that will take time to bear fruit.

In terms of more immediate results, we can improve straight away with simple efficiency improvements, like data collection and analysis, and more regular services, which will not only reduce emissions but also improve business performance and bring instant wins for every stakeholder in the energy supply chain.

Helping both buyers and suppliers understand their consumption and forecast more accurately, could reduce their costs as well as diminish the perils of volatile markets and market prices. If users are having access to more accurate and frequent data, that will help the whole energy industry to fulfil its potential and reach its target goals. I believe that accuracy and completeness are key factors in unlocking that powerful instrument, as even small deviations can have big impacts on energy consumption and their overall impact on the network.

One example of efficiency in action which is happening right now is the rollout of smart and advanced meters. At the forefront of equipping businesses with the data they need for efficient energy management, they are a fundamental technology to help customers monitor and become smarter with their energy usage. Governmentmandated demand for smart metering sets out binding annual installation targets for energy suppliers to roll out smart and advanced meters to their nonsmart customers by 2025, yet current industry levels of smart meter expansion are still relatively low and insufficient in order to reach the ambitious targets.

Electricity metering and data services are useful in all key economic areas such as the industrial, commercial,

and domestic electricity sectors. Analytics can not only help business and individual users to be more energy efficient and cost-effective with their energy usage but also ensures that the National Grid is running sustainably, as it continues to meet demand when there’s a greater introduction of solar and electric vehicles into the grid.

Furthermore, it’s a well-known truth that over time, traditional sources of energy will have to increasingly make way for renewable alternatives. However, that doesn’t mean we can’t improve the traditional energy efficiency today, though, so we must be considering how those assets can be better used in the short term and repurpose those applications to be more energy efficient.

For example, investment into renewable energy developers which convert conventional supply chain businesses into new energy-efficient applications has a crucial role to play in our transition. We need that experience and technical brainpower to make the transition succeed and find new ways of using energy sources that are already produced.

Energy transition needs definitive actions on both individual and corporate level. Whether it is to install smart meters, utilise data to understand energy usage better or improve overall efficiency and reduce costs. It is vital to continue providing consumers with the needed support to turn those actions into measurable and viable results. In order to succeed in our Net Zero mission, there must be a joint effort led by the right people with knowledge, and the commitment to achieve efficiency.

By investing in efficiency, Britons will access more energy at a lower price through cleaner technologies and processes, and importantly guarantee their energy security by depending less on volatile energy markets. www.imserv.com

Fast Track Your Career with our 5-day Intensive Training

The Renewable Energy Institute is running a 5-day intensive training week in the Live Virtual Classroom to help you fast-track your career in the renewable energy sector. Join us this September from Monday 4th – Friday 8th to network and interact with one of the REI’s industry experts and other professionals from around the world. Previous attendees include employees from the Ministry of Defence, DNV, BBC, The World Bank, NATO, UK GOV and many more.

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Monday 4th & Tuesday 5th September

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Wednesday 6th & Thursday 7th September

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Friday 8th September

On completion of this training, you will receive the internationally recognised Galileo Master Certificate, 80 Continuous Professional Development (CPD) hours you can log and 1-year complimentary REI professional membership.

All the REI’s courses are also available to study Online, On-demand, wherever and whenever suits you best!

To secure your place: Call us on +44 131 446 9479 (Monday to Friday, 9am - 5pm UK time) Email us at training@ renewableinstitute.org

Visit: www.renewableinstitute.org/ training/hydrogen-energyconsultant-expert-certificate/

FROM INNOVATION TO DELIVERY – DECARBONISING THE PUBLIC SECTOR COMMENT

The government’s latest annual State of the Estate Report showed that direct emissions from public sector buildings have fallen by 10% and reduced energy use has meant that the government has spent £122 million less in 2021-22 compared with 2017-18.

It’s welcome news and demonstrates in real terms what can be done with a huge effort from government teams. That’s a whopping £122m that can be redirected into public services – more school computers, hospital equipment or further investment in decarbonisation.

The numbers indicate that the government is on course to deliver its ambition to create a smaller, better, and greener estate and meet its target of halving public sector carbon emissions by 2032, with a 75% reduction by 2037.

A huge research and innovation effort across government and industry has led to this point – no surprises that decarbonisation across the public estate is a knotty issue, with a truly collaborative effort needed to untangle the challenges.

One such effort has been the awardwinning Modern Energy Partners (MEP) programme, a ground-breaking partnership across government, the NHS and Energy Systems Catapult. The team worked on the ground with 42 public sector sites and industry collaborators to discover the best ways to decarbonise these complex estates.

The learning from MEP has been instrumental in the development of the new Public Sector Decarbonisation Guidance (PSDG), launched by Energy Systems Catapult in March 2023. PSDG captures the real-world learnings from MEP in an ultimate public sector decarbonisation toolkit to make energy savings simpler and enable decarbonisation at scale and pace.

The premise is simple: equip more public sector organisations with practical tools, templates, guides and a framework to reduce emissions across their buildings, helping save energy, money and scale progress, saving more taxpayer millions.

The MEP programme has recently been given its own ‘State of’ style evaluation.

SPOILER: IT WAS A VERY GOOD THING!

We’ve outlined five of the key takeaways from the evaluation that will help ensure your success, as well

by Stephanie Parker, Senior Advisor

Decarbonisation – Complex Sites at Energy Systems

Catapult.

as signposting the practical tools and guides from the PSDG that can help.

1. Independent expertise – With so many factors to consider, and potential choices to be made when decarbonising buildings and estates, it’s important to have a team that can provide a range of perspectives and ensure the best outcome for your site and the people that work there. The value of the MEP ‘concept designs’ that set out how to decarbonise the particular site, came from their independent nature and the high levels of expertise from the MEP team and the consultants involved. The PSDG can help you replicate this by giving you the 101 on independent expertise, feasibility and design studies, and cross-consultancy collaboration.Get better decarb plans – With the PSDG’s Theme 2 Guide – Feasibility and Design.

2. Engagement – Getting the team on the site deeply involved in decarbonisation projects is critical. The MEP programme found there were delays in information sharing with sites, and concept designs sometimes weren’t quite right because the people who knew the site best, and understood how it was used every day, weren’t properly engaged. To avoid these issues, make sure you engage all the relevant people and provide them with the necessary information.

Avoid stakeholder pitfalls –Download the PSDG’s Stakeholder Engagement Guide.

3. Funding – Funding was identified as a key barrier to implementing measures. The more informed you are about funding options, the better prepared you’ll be with a winning business case, and the better your chances of securing the resources you need to make your decarbonisation programme a success. Secure your funding – Get the PSDG’s Funding Guide. If you are a local

authority, Net Zero

Go can also help you with appropriate business cases.

4. In-house skills and capabilities –Skills gaps were identified, particularly around collecting data at a site level and expertise on how to procure and maintain low carbon heating systems. The PSDG’s skills and capabilities guide can help you identify the expertise you need across your whole decarbonisation programme. And don’t forget about the importance of procurement! Ensuring you have a viable procurement route in place for the solution you wish to deliver is critical to achieving your decarbonisation goals. Need support and friction-free procurement? – See the Skills and Capabilities Guide and the Theme 5 Guide – Procurement.

5. Sub-metering – Few sites had sufficient sub metering, so they didn’t understand enough about their estates and how they use energy day to day and during the different seasons. It’s critical you understand your energy data, and if you are a larger site have a strategy to manage your data and its analysis; it’s the foundation of your decarbonisation programme. Demystify your data – Check out the PSDG’s guide to Understanding Energy Data.

By making energy savings simpler across public buildings, and turbocharging decarbonisation, we’re supporting the public sector to make its vital contribution to delivering Net Zero by 2050, and improving lives now and for future generations.

You can check out the full suite of tools, guides and decarbonisation framework at the Public Sector Decarbonisation Guidance homepage. https://es.catapult. org.uk/tools-and-labs/public-sectordecarbonisation-guidance/

For more information, get in touch: psdecarbguidance@es.catapult.org.uk

CLIMATE TARGETS FOR CLEAN ENERGY & EV INFRASTRUCTURE: THE INVESTMENT CHALLENGE

THE ESSENTIAL ROLE OF HYDROGEN

The government has laid out its plans to power the whole country entirely by clean electricity by 2035. But while electricity will be the primary source of energy, there remain many sectors where electrification is not suitable, making the supply of low carbon alternatives essential to achieving net zero targets1

Working with industry, the government is aiming for 5GW of low carbon hydrogen production capacity by 2030 for use across the economy.2 With virtually no low carbon hydrogen produced or used currently, particularly to supply energy, this will require rapid and significant scale up from where we are today.

Some applications for decarbonisation, such as industrial heating, may be virtually impossible without a supply of hydrogen, and many experts have argued that these are the cases where it should be prioritised, at least in the short term.

Yet there is also a significantly less talked about usage for hydrogen, that being as fuel cells in vehicles. In a hydrogen fuel cell, the clean burning compressed gas is converted first to electricity and then powers the bus, train or even aircraft or ship engine.3 So the likely mainstream solution may be hybrid vehicles that can either take electric power from a direct source, or generate it from hydrogen combustion.

ELECTRIC VEHICLES AND HOW TO CHARGE THEM

Transport is one of the highest emitting industries in the country, and while the exact mix is yet to be determined it is clear that grid-powered and hydrogenpowered EVs will rapidly replace fossil fuel engines. The sale of new petrol and diesel vehicles will be banned from 2030, and by 2035 all vehicles will have to run with zero

1 https://www.gov.uk/government/publications/netzero-strategy

2 As set out in the Government’s Ten Point Plan for a Green Industrial Revolution: https://www.gov.uk/ government/publications/the-ten-point-plan-for-agreen-industrial-revolution/title

3 Hydrogen trains are being rolled out throughout Europe, are part of EC and UK government policy – mainly in partnership with electric. Alstom launched the first hydrogen train in 2018. ZeroAvia is developing hydrogen fuelled aircraft to address this high-polluting of mode of transport

emissions. This means that developing charging infrastructure is critical to the success of the EV transition.

However, recent figures from the Department of Transport have revealed that on average only 800 new chargers are being added to the public network per month – a that rate needs to increase to 3,130 a month (roughly 100 per day), if the government is to meet its target of 300,000 devices nationwide by 2030.4

Autumn 2022 saw a watershed moment in the UK EV market, with Britain’s millionth plug-in electric car registered. The EV infrastructure investment challenge to meet this rapid growth in demand is considerable. One key analyst reports that with more EVs coming to market, revenues from EV charging of passenger cars alone will surge to about £7 billion in the UK and £43 billion across Europe in 20305. Hardware and related fulfilment services will account for some 45% of this market through 2030 – around £3.15 billion. Financing techniques for decarbonisation

But how will this be paid for? The diversification of technology e.g. hydrogen fuel cells, can help make this challenge more surmountable, but it is clear publics funds alone will not be sufficient to create the clean and green infrastructure required to transition to net zero.6 It will require a combination of public and private sector finance. Smart specialist finance solutions, offered by private sector financiers, can

4 https://www.thisismoney.co.uk/money/electriccars/ article-11675107/UK-needs-increase-monthly-EVcharger-installation-288.html

5 https://www.adlittle.com/en/insights/ viewpoints/electric-vehicle-charging-uk-andeurope#:~:text=After%20many%20years%2C%20 the%20patience,a%20CAGR%20of%20 approximately%2025%25.

6 https://www.mckinsey.com/business-functions/ operations/our-insights/global-infrastructureinitiative/voices/leveraging-infrastructureinvestment-to-meet-net-zero-goals; https:// cleanenergynews.ihsmarkit.com/research-analysis/ cop26securing-financing-for-a-global-netzerotransition-by-2050.html

make investment financially sustainable.

Smart financing is offered by specialist financiers who have a deep understanding and knowledge of the industry and relevant technology, and can enable the acquisition of technology and equipment for competitive advantage in a financially sustainable way, tailored to an organisation’s specific business and cash-flow needs. Specifically, smart finance makes investments possible and affordable by aligning costs with revenues.

Additionally, it offers three major advantages over generalist finance: technology expertise which understands real business outcomes; a breadth of financing solutions which can meet the organisation’s exact needs; and smooth, sophisticated processes which make the use of smart finance seamless and easy.

CONCLUSION

The drive for sustainable, decarbonising technologies remains strong despite economic and geopolitical pressures. While investment in electrification is growing in popularity in many industries, it is likely that a hybrid approach, combining electric with hydrogen, will be the most cost effective green strategy. This investment will be difficult for the public purse to bear alone, as a result, the role of specialist financiers is becoming more important for reaching sustainable goals, as they can help make the acquisition of the necessary technology more affordable, efficient and cash-flow friendly. https://new.siemens. com/uk/en/products/financing.html

In this article Toby Horne and Ollie Finkill, Siemens Financial Services UK, look at how investment in hydrogen and EV infrastructure will be crucial to the realisation of the UK’s net zero goals.

NET ZERO –EFFECTING ORGANISATIONAL CHANGE FROM THE TOP

Jes Rutter, Managing Director, JRP Solutions

To achieve Net Zero greenhouse gas (GHG) emissions, the culture, structure and processes within an organisation must change. This means changing the way people behave to embed sustained best practice from within. Ultimately it means Net-Zeroproofing your organisation’s mission statement and business strategy. Culture is not what you say but what you do Changing organisational behaviour cannot happen without the full support, engagement and commitment from key influencers and decision-makers within the organisation, but how do you secure this commitment if it’s currently lacking? We know that this is particularly relevant for managers tasked with environmental or wider sustainability goals that haven’t been fully embraced across the organisation. For example, where there is no formal

sustainability strategy, Environmental Management System (EMS) or Energy Management System (EnMS) in place. Surprisingly, we also find that even where formal ISO 50001 and even ISO 14001 objectives have been signed off by the board, it is still not always regarded as being the responsibility of the senior team to ensure that the objectives are strategic, that they reflect GHG reduction targets and that the organisation’s need to be climate resilient is considered. If this situation is all too familiar, then read on.

WHO ARE THE ‘INFLUENCERS’?

Nothing can be achieved without the commitment from the people at the very top who make the decisions. There are, however, influencers at all levels within an organisation; people who are listened to, believed and who inspire ‘disciples’. Whilst the Managing Director or Chief Executive

may be the ultimate authority, he or she may not have the qualities required and it may be considered that someone else on the board or management team would be a better figure head for the Net Zero behaviour change movement. Obviously, you’ll need to identify these people; they should not only have the authority to sanction any Net Zero initiatives, but also have the personal commitment and leadership qualities that inspire others to want to follow their lead.

There are others within the organisational structure who may have the authority and responsibility for doing what is required to change the culture, structure and processes to embed Net Zero behaviour, but they may not be inclined to do so unless they receive clear direction from the very top.

Having identified the top-level influencer, it is worth identifying other influencers in the organisation, at all levels, who share your ambitions and who would be prepared to support you in engaging the top-level influencer in your cause. The support of these influencers will also be critical in delivering any Net Zero behaviour change programmes. They will be able to contribute by informing the strategy from their own and their peer colleagues’ perspectives.

HOW DO YOU ACCESS THE TOP-LEVEL INFLUENCERS?

This can be challenging, but if you have no regular contact with the person/ people, you could simply ask to see them for 15 minutes to explain the initiative and seek their support. Some people do not get in front of top management because they don’t ask to see them!

In your approach it is worth stating how much time you will need – keep it short for an initial discussion - what you want to discuss in broad terms, what benefit it could potentially have for the organisation (including indirect co-benefits), and why you are approaching them.

If this doesn’t work, can you identify an influencer who, whilst not at the very top of the organisation, may have access to the top and who could make the approach on your behalf?

Don’t be discouraged. There could be many reasons, unrelated to you or your initiative, why your approach has been declined.

It’s worth remembering that there can be considerable benefit from employing a specialist consultant in this engagement operation. They can take approaches and risks that internal staff cannot. As an outsider and specialist, their views are likely to be taken more

seriously than those of an insider, even though the insider might be making exactly the same points.

WHAT ARE THEIR GOALS AND PRIORITIES?

If you can understand the priorities and interests of the person/people you want to engage with, you can make your approach on terms that are relevant to them. If, for example, you know that your CEO is all about the bottom line, you can approach them on the basis of the competitive advantage and financial benefits that Net Zero offers. If you know the person’s priority is customer service and reputation then use this as a way to get their attention.

They should also be made aware that regulations will be introduced that will require reporting about adaptation and mitigation measures. In addition, stringent requirements around commercial procurement, already introduced in the public sector, are likely to be introduced in the private sector. These will require an organisation to have a clear Net Zero statement and strategy.

Other priorities may be compliance, health and safety, zero emissions strategy and possibly sustainability more generally. So, any Net Zero behaviour initiative should be framed within their priorities so that it then it becomes their priority.

The purpose of this is to put a Net Zero behaviour initiative in the context of the entire organisation. In other words, it should be integrated into the culture, systems and structure of the organisation rather than be a stand-alone, isolated function, solely the responsibility of the initiative driver. Ultimately it is about Net-Zero-proofing business’s day-to-day operations and how it plans for the future.

YOUR TIME TO SHINE.

Once you have gained your time with the leader(s) be prepared! Make sure that you set out your case clearly, succinctly with facts, figures and clear examples to support your case in terms that are relevant to their priorities.

It is important to define what top level commitment means and specifically what you want people to do.

Because senior management are busy people, your requests of them should be framed by:

1. Actions with a high visibility and impact

2. Actions that take little time or start with cost-neutral measures

3. Actions that directly align with current business goals/priorities

It is also important to set a framework right upfront (although this may subsequently change) for how results will be measured, by whom and how progress will be reported so that your top-level ambassadors feel comfortable that they will quickly understand the impact of your initiative. Any successes should obviously be communicated but equally failures should be acknowledged, with plans to learn from the failures. It’s all about cost-effective continuous performance improvement.

And finally, don’t leave the meeting without agreeing a clear path to progress your initiative!

As specialist consultants, we are helping organisations to engage top level influencers with limited understanding of Net Zero and GHG accounting protocols by holding 1-2 hour ‘capacity-building’ workshops. To date topics have included: Defining Net Zero, issues and opportunities for your business/organisation

• Greenhouse gas accounting, science-based targets and trajectories

• The energy hierarchy and good practice carbon offsetting

• Scopes 1-3 – understanding the implications

• Establishing priorities for action

This approach may be one that you wish to consider as it is successfully engaging senior decision-makers in getting to grips with Net Zero. It has given them an understanding of the basic principles, the issues, the governance requirements and the implications – the risks and opportunities – for their organisation. The outcomes are agreed responsibilities and priorities for action.

If you are interested in holding a workshop for your organisation or would like to discuss any other aspect of a Behaviour Change Programme, please call 0800 6127 567 or email george.richards@jrpsolutions.com

UNDERSTANDING THE EVOLUTION OF THE PPA MARKET

Power purchase agreements (PPAs) are a fundamental building block for most renewable energy projects. Understanding how they’ve evolved can help buyers and sellers navigate their idiosyncrasies and challenges.

PPAs have been in existence almost as long as commercial power generation: contracts by which a generator sold power to a utility or an industrial user date back to the early 20th century. Since the power markets liberalised in the 1990s independent generators that weren’t signed up the BSC would enter in a route-to-market PPA to be able to sell their power to a third party.

FIRST, WHY USE A PPA?

In my previous blog, we discussed contracts for difference (CfDs), which have emerged as the favoured government-backed support mechanism for renewables in a growing number of countries. However, CfDs don’t work in isolation. A generator must enter into a route-to-market PPA to ‘enable’ a CfD.

In the UK, only registered entities can connect generation to the grid. Most generators will therefore need to enter into a route-to-market PPA with a utility such as EDF or Engie, or aggregators like Statkraft or Axpo.

Under the old Renewables Obligation Certificate (ROC) regime, route to market PPAs were used to monetise the value of ROCs – the PPA providers would offer to pay a percentage (typically in the high 90s) of the ROC value. The discount on ROCs is driven mainly by the cost of money as the PPA provider would pay for ROCs monthly but sell them annually. As the price of ROCs was fixed each year and then inflated annually in line with the Retail Price Index (now the Consumer Prices Index) these ROC revenues typically underpinned most of the investment in a new project.

The power was also sold, typically under the same arrangement, at a similar percentage of the market index (e.g. N2EX or ICIS hourly day ahead prices). The discount on the power price is driven mainly by the balancing risk between the system price and the chosen market index. Sometimes,

these route-to-market PPAs have floors which provide further downside protection for a project’s cash flows, or they have fixing provisions that allow generators to fix power prices several months or seasons ahead.

The inherent risks of these route to market PPAs are the exposure to wholesale power prices, exposure to the capture risk, and a contract pricing risk when fixing – meaning that when the developer comes to fix its power with the PPA provider it has no option but to sell the power at the price offered by the utility, which can often be at a significant discount to the forward market. In addition, these route to market PPAs quite often have limits to how far out a generator can fix the power (typically four or six seasons ahead).

In response many generators sought alternative options for selling their power which drove the development of the corporate PPA.

A BRIEF HISTORY OF CORPORATE PPAS

The first CPPA in Europe was arranged by Utilyx in 2008 for the supermarket Sainsbury’s. Under the terms of the transaction Sainsbury’s agreed to purchase all of the electricity generated by a 6MW wind farm in Scotland for a period of 10 years. The wind farm was built by A7 Energy, and Sainsbury’s purchase of the electricity helped to make the project financially viable. Since then, a growing number of companies have followed Sainsbury’s lead and signed CPPAs with renewable energy generators.

The initial uptake of CPPAs was slow, as many companies were hesitant to sign long-term contracts for electricity. However, as the cost of renewable energy has fallen in recent years, more and more companies have seen the benefits of CPPAs. By 2016, the number of CPPAs signed by corporations had reached 100, and the total capacity of the renewable energy projects covered by the agreements had exceeded 10 GW.

By 2020, over 300 corporations had signed CPPAs, covering over 28 GW of renewable energy capacity. The largest CPPA signed to date was by Amazon, which agreed to purchase 1.5 GW of wind and

solar power from several different projects. The deal was part of Amazon’s commitment to reach 100% renewable energy by 2025. CPPAs offer a number of benefits to both corporations and the environment.

For corporations, signing a CPPA can provide a stable source of renewable energy at a fixed price for a long period of time. This can help to reduce the corporation’s exposure to volatile energy markets and provide a hedge against future price increases. In addition, CPPAs can help corporations to meet their sustainability goals and reduce their carbon footprint, which can be an important factor for customers and investors.

For the environment, CPPAs can help to drive the development of renewable energy projects by providing a stable source of revenue for generators. This can help to increase the amount of renewable energy on the grid and reduce the amount of electricity generated by fossil fuels. In addition, CPPAs can help to reduce greenhouse gas emissions, which can have a positive impact on the environment and public health.

THERE ARE BROADLY TWO TYPES OF CPPA SLEEVED/PHYSICAL PPAS

Although corporate PPAs nominally involve selling power to a corporate or utilities, other power traders are still involved as only market participants can register meters and transfer power through the system. Furthermore, because wind and solar projects generate power intermittently, this creates ‘shape risk’, whereby the power generated does not match the buyer’s demand profile. In a sleeved PPA, the generator supplies the physical power as generated to a utility that, for a fee, supplies the corporate buyer with power at its site(s) in line with its demand. Sleeved PPAs typically involve the utility providing a number of services in addition

Chris Bowden, managing director and founder of Squeaky

to managing issues around intermittency, such as managing the generator’s balancing costs and transferring the REGOs. The contractual framework also maintains the relationship between the corporate and its utility provider. Conversely, it can make it more difficult for the corporate buyer to change supplier over the lifetime of the PPA if the supplier is locked into the arrangement, or it can cause problems if the supplier decides they do not want to provide the sleeving services or will only provide them at a very high cost to the corporate.

VIRTUAL PPAS

An alternative approach is known as the ‘virtual’ PPA. These purely financial contracts are essentially CfDs, by which the generator and the buyer exchange cash flows based on a strike price referenced to a particular power market index. The generator will sell power under a route to market PPA at a discount to its chosen index and the buyer will enter into a VPPA based on this index at an agreed strike price.

If the price is higher than the strike, then the generator will pay the buyer. But if it’s lower, the generator is paid by the corporate buyer. This provides both buyer and seller with a level of price certainty.

The key advantage of a VPPA is that the generator and corporate buyer do not need to be in the same power market. The structure was developed in the United States, which has a number of regional power markets with limited transmission of power between them. They have been used in the UK by companies with US parents, often simply because they are the structure with which they are most familiar. However, they are also used in Europe, allowing PPAs to be struck by counterparties in different power markets.

VPPAs are particularly attractive to buyers with electricity loads distributed over numerous sites.

VPPAs can, however, introduce their counterparties to several risks. If the VPPA isn’t indexed to the same price as the generator’s route to market PPA,

then there’s a ‘basis risk’, which results from differences in power prices across different markets. If prices are lower in the generator’s wholesale market than in the reference market, it may not be fully compensated for the payment it makes to the buyer. Conversely, a buyer may find that it is paying a greater spread above the VPPA strike price for its physical power than it is receiving from its VPPA counterparty.

The other risk for the generator is the balancing risk which also needs to be factored into the overall revenue stack.

If the VPPA strike is £70/MWh plus CPI over 10 years this has to be adjusted down for the index discount for the next 10 years on the route to market PPA. If this isn’t fixed, which can be very expensive, then the project has a residual risk to floating power prices.

On the buyer side they are exposed to the capture risk; the VPPA payment is typically settled against the weighted value of the power generated under the generator’s route to market PPA. The buyer however is typically exposed under their supply contract to baseload power prices so there is a mismatch “capture price basis risk” between the buyer’s cost of power and the value of the VPPA.

Because VPPAs are financially settled contracts this risk can be very hard to manage, particularly in markets which are largely physical like the UK. They can also be considered derivatives for accounting purposes, requiring that they are regularly marked-to-market.

WHERE WE GO FROM HERE

Hundreds of corporate PPAs have been struck around the world in the last two decades. Despite this, they remain bespoke contracts, which are often expensive and timeconsuming to negotiate. Within them, buyers and sellers alike face numerous, often complex risks, which are not always understood nor easily managed by the counterparties involved. This article was first published on www.squeaky.energy

TAMLITE EXPLAINS: EVERYTHING YOU NEED TO KNOW ABOUT NABERS UK

NABERS UK is the latest energy efficiency rating system to take the built environment by storm. Its particular focus on building performance sets it apart from other rating systems. It’s one to keep an eye on, which is why we’re breaking down what you need to know.

WHAT IS NABERS UK?

NABERS UK was launched in November 2020, making it one of the newest rating systems in the sector. Similar to the efficiency stars that label household items like refrigerators and washing machines, NABERS UK utilises a 6-star system to measure and rate the actual energy use of offices.

Once certified, NABERS ratings are valid for 12 months. This time frame ensures that ratings are accurate to the building’s current operational performance and helps to identify areas for savings and improvements.

Providing annual ratings measurements also means building owners can benchmark the progress of their building’s year-on-year change of operational energy consumption, as well as identify progress compared to other buildings participating in the ratings scheme.

WHO OVERSEES NABERS UK GOVERNANCE?

BRE is in charge of running NABERS UK on a daily basis and administers the programme. A steering committee made up of BRE, the Better Buildings Partnership, and NABERS—the scheme owner on behalf of Australia’s New South Wales Government—oversees the strategic activities of NABERS UK.

WHAT IS THE DIFFERENCE BETWEEN NABERS AND BREEAM?

The main difference between the two building rating systems is that BREAAM is a design-based energy rating, whereas NABERS UK measures and rates the actual energy use of offices.

While NABERS separates base building ratings from the tenancy and whole building ratings, BREEAM assigns a single rating to the entire building. BREEAM focuses more specifically on sustainability of the built environment through the perspectives of energy, health and wellbeing, land use, materials, innovation, management and pollution.

Meanwhile, NABERS UK offers two different products with varying purposes:

• NABERS Energy measures the efficiency of an office building

and rates its performance

• NABERS Design for Performance is the process whereby a developer or owner commits to design, build and commission a new office development or major refurbishment to achieve a specific NABERS Energy rating.

WHAT ARE THE BENEFITS OF A NABERS UK RATING?

The NABERS rating system is an important tool for promoting sustainability in the built environment. It helps building owners and occupants to understand their environmental impact and identify areas for improvement.

By providing a transparent and standardised rating system, it also encourages competition among buildings to become more sustainable.

From a financial perspective, both investors and building occupiers are increasingly seeking properties with strong performance credentials. Recent research from Bain & Company and EcoVadis has shown that businesses that are more sustainable are also more profitable. The study revealed that most companies working to improve their ESG saw revenue growth of up to 6% over the span of the 3-year study.

More efficient energy consumption also translates to lower energy costs, allowing building and business owners to invest the saved money where it’s needed most.

Research in 2021 from real-estate firm Knight Frank found that offices with NABERS Energy ratings of up to 4.5 stars were worth an average of 8% more than unrated buildings on a per square metre basis. This premium jumped up to 18% among offices with five- and six-star ratings.

EXPERT INSIGHT: WHAT’S NEXT FOR NABERS

The NABERS rating system, which has been in place in Australia since 1999, was rolled out by BRE in 2020 – making it one of the newest rating systems available to energy owners – and is bringing praise from industry leaders.

Some industry commentators see the potential for NABERS UK to consolidate various rating systems. Meanwhile, other influential bodies such as the British Council for Offices (BCO) have incorporated NABERS UK guidelines into its updated 2023 Guide to Specification, citing that new recommendations include a minimum sustainability target of 5 stars.

Neil Pennell, Chair of the BCO’s Technical

Affairs Committee and Head of Design Innovation and Property Solutions at Landsec, said, “There is a clear imperative to adopt a whole-building approach to decarbonise the sector which needs to start with the design and specification of new and refurbished office space.”

IS THE NABERS RATING SYSTEM MANDATORY?

In some Australian states, the NABERS rating system is mandatory for certain types of buildings, such as office buildings, shopping centres, and hotels. Here in the UK, NABERS is not yet mandatory, though it has widely been considered a world leading environmental performance rating tool for commercial buildings.

The scheme has recently expanded to include Whole Building and Tenancy ratings, broadening its scope within the country. These two ratings joined the NABERS UK Base Buildings rating to complete the NABERS UK Energy for Offices suite.

HOW CAN MODERN, EFFICIENT LED LIGHTING IMPROVE NABERS RATINGS?

The Indoor Environment (IE) rating of NABERS measures the lighting quality, indoor air quality, acoustics, temperature, and thermal comfort of a building. NABERS UK ratings are based on metered energy consumption. Therefore, enhancing energy efficiency of lighting within buildings can greatly impact energy demand, operational costs, and improve NABERS ratings.

For more detailed insight, BRE offers useful downloads and a products page.

HOW CAN I GET STARTED?

With NABERS UK, it’s often a good idea to think about deploying quick-wins on energy efficiency – particularly in light of the phase-out of older technologies, including halogen and fluorescent lamps. NABERS echoes much of our own guidance on straight forward steps that can be taken to improve indoor lighting efficiency and quality. LED lighting offers businesses an easy solution to quick install and a relatively small investment. It is well known that replacing outdated lighting with modern LED systems, coupled with intelligent control systems, buildings can be made more efficient, generating savings of between 60% to 80%.

At Tamlite Lighting, we’re here to help with energy efficiency and decarbonisation challenges. Drop us a line to get in touch. https://tamlite.co.uk/contact

CARBON REPORTING LEGISLATION PUSHES UK DATA CENTRES TO GO GREEN

Fortified environmental legislations in the UK mandate that Data Centres must publicly report on their energy consumption and greenhouse gas emissions, heightening the soar in demand for wind and solar farm grid connections.

Data Centres across the UK have found themselves caught in the eye of a reputational storm over the last year, due to the constant ratcheting of climate-related financial directives that are currently being enforced and fortified on a governmental level.

Most notable is the Financial Conduct Authority (FCA) listing rules, which mandate that a range of entities including asset owners and managers (investment portfolio managers, fund managers) must report on their climate-related risks. As of April 2022, it has been extended to also include other listed companies and the largest private businesses, such as Data Centres. The Streamlined Energy and Carbon Reporting (SECR) framework is adding further anxieties, enshrining in law that large businesses must publicly report and lay bare their energy consumption, and output of greenhouse gas emissions.

The mandates are a coordinated action by the government and financial sector regulators to crack down on business’s carbon usage, and accelerate the overall sustainable transformation in time to achieve the UKs 2050 net zero target. Suzanna Lashford (Manager, Business Development) at infrastructure and renewable energy specialist company Vattenfall, comments:

“Publicly displaying business’ carbon footprint to the market is going to create a league of who is leading the way in reducing their footprint – and who is dragging their heels. This is particularly key to financial reports in the Data Centre world, where financial houses will be held accountable for the companies they are investing in and their sustainability goals.”

SURGING DEMAND

The Data Centre industry is particularly energy intensive, accounting for 4% of global electricity consumption and 1% of global greenhouse gas emissions. There is therefore a huge pressure for Data Centres to not only reduce the energy that they are using, but also that they are bringing into their facilities. To complicate matters further, our society’s systemic shift towards a cleaner, greener future also intercepts our digital revolution; the Data Centre market is expected to rise by 5.5% between 2023 and 2028, with Amazon Web Service claiming to invest EUR 1.8 billion in the UK to construct and run Data Centres. With capacity demand on a continuous upward trajectory, there is an increasing focus on carbon reduction as a major driver for these businesses.

Those looking to boost their green credentials better act fast, however, as there is a limited and rapidly diminishing capacity available on the UK power grid. Heightened demand for the adoption of renewable and clean energy has led to an unprecedented soar in applications for wind and solar grid connections, which have only been further intensified by the UKs fortified sustainability regulations. This is putting significant pressure on the already stretched Dependent Network Operators, leading to bottlenecks and critical delays.

The National Grid has warned that those looking to secure their connection in England and Wales must wait in line behind 600 other projects compromising of 176GW, in a backlog extending more than a decade into the future – all

fighting for 64GW of connected capacity. Data Centres wanting to connect to the grid and tie in onsite generation will be particularly impacted, given their extensive capacity demands.

GETTING AHEAD OF THE CURVE

While the UK government is researching wider plans to improve capacity and lessen delays, this will take time – and given the growing scrutiny and publicity of larger company’s sustainable efforts, time is not a luxury that most can afford. Developers looking to get connected now can do so by partnering with an Independent Network Operators (IDNO) – an Ofgem regulated energy professional that offers an alternative route to connect to the grid. IDNOs can reserve grid capacity for free on behalf of their clients; as well as offering an upfront ‘Asset Value’ payment that is entirely unique to their services to significantly reduce the cost of a new or upgraded grid connection.

Lashford explains: “IDNOs have an in-depth understanding of distribution utilities and the energy landscape, making them ideally suited to support Data Centres who naturally require the most efficient, reliable and sustainable energy sources to power their facilities. Vattenfall IDNO is currently supplying 100 percent renewable energy Microsoft’s Data Centre in Sweden, and is experiencing an increased demand for our services here in the UK too. The IDNO market is set to become an increasingly important player in the UKs transition to net zero.” https://group.vattenfall.com/uk/ who-we-are/contact-us