The importance of energy transition for business
As we are all aware, humanity is on a mission to cut back on the use of fossil fuels to save our planet. The UK Government has committed to reaching net zero by 2050, contributing towards keeping rises in average global temperatures below 2°C and as close to 1.5°C as possible. We have a shared responsibility to play our part, and whilst we can’t simply ban the world from using fossil fuels in time to meet our climate goals, the aim is to emit no more greenhouse gases than we are offsetting – an achievable target if we all commit.
Business grabbing the initiative
As individuals, everyone has a role to play in this movement, but commercial and industrial businesses alone are to blame for a huge amount of carbon emissions. In 2020, Commercial & Industrial (C&I) businesses accounted for 18% of all UK greenhouse gas emissions. However, renewable solutions for companies are more accessible and affordable than ever, so what’s preventing quicker uptake?
In 2021, just 38% of businesses reported that they are taking action to reduce their greenhouse gas emissions, while 24% reported that they intend to act in the next 12 months, but where’s the urgency? Why have some businesses been successfully transitioning to renewables, and some not?
This paper explores the barriers to C & I businesses adopting renewable solutions and how we can open our eyes to the simple and accessible ways to overcome these. From concerns with capital spend to the fear of the unknown when investing in renewables; the growth in switching to green energy within the commercial world just simply isn’t where it could be or needs to be.
Putting profit before the planet
Realistically, money has been and always will be a significant driver or barrier to any major decision for businesses, this is especially true in the volatile global market we are in. So, when deciding whether to invest capital into the core business or to deploy it into renewables, the sustainable transition stops here for many companies. This needn’t be the case. Now there are numerous solutions accessible to all businesses, and a forever increasing awareness of these, there is no excuse.
Navigating the economic environment with the renewable options available
With increases in interest rates, not only do the borrowing costs to fund these renewable developments become more costly but inflation also impacts the costs associated with equipment and construction. Having been through Covid, the Ukraine conflict and a general malaise across the global economy, businesses are craving financial security and, as a result, renewable solutions can too quickly drop down the list of priorities.
Often shareholders and investors do not link the sustainability of the planet with the sustainability of their business. The planet should be a priority, but the nature and mindset of our corporate world is geared towards profit, so the challenge is to swim with the tide, whilst still making change.
So, to accommodate the corporate dilemma of where to invest and provide opportunities to benefit from renewable energy, there are options available to C&I businesses giving access to running their processes sustainably. Like Zestec’s PPA proposition, there are options to generating your on-site clean energy at no upfront cost, resulting in paying around 30-50% less for business electricity than you would’ve been from the grid, certainly in today’s market.
Own your green electricity production, off-site
If you haven’t got the resources to deploy your own solutions on-site, then many organisations can guide you in investing in your own assets off-site, for example having an equity share in a new greenfield project in another location. Companies such as Octopus are forever developing new technologies to ensure that businesses can still benefit from green energy whether it’s from on-site or off-site solutions. Max Power is their latest tariff development that allows businesses with two or more sites to send any excess renewable energy one site has generated to their other locations in the UK. Octopus estimates it could also save businesses up to 25% off of their annual electricity bills, so multiple sites are benefitting from green energy at a cheaper cost.
In reality, with access to these innovative ways of deploying renewable solutions without any capital outlay available; businesses can accelerate their energy transition with little capital investment, it just takes some research and taking the time to seek expert advice.
Where expert partners can help
Navigating the logistics and complications of deploying such large-scale renewable investments can be daunting. There is a raft of experts in the market to help with anything from full funding and finance planning to installing and managing your asset along the way. Let’s make use of their knowledge.
There can be challenges around the agreements needed and worries about the potential Return on Investment. Dealing with planning applications (where required) and gaining DNO connection, requires patience and specialist knowledge. Here is where experienced developers can help smooth the way, such as Zestec’s team that has you covered from grid application to designing the right bespoke system for your business.
Whilst the accessibility of connecting to the grid has inhibited the growth of renewable energy, the UK is working on it. Processes and new innovations are being put into place. Alongside fellow renewable solution providers, we’re working together with the National Grid, DNOs, and Ofgem to come up with plans to accelerate the time it takes to connect. As part of our portfolio of businesses, we work with Eclipse and IDNO (Independent Distribution Network Operator) to review a renewable project’s specifications and advise on the most cost-effective and accessible options when connecting to the grid. This has helped us reduce connection times and optimise export potential to help save our clients even more money on their electricity bills. There are experts to make your whole transition journey smoother, just ask!
Fear of the Unknown
When the simple solutions to the excuses are presented to C&I businesses, the resultant reaction is often ‘What’s the catch?’ or ‘It’s too good to be true’. We have resolved the issue of capital costs and where best to invest, practical issues regarding time efficiency, and the complications regarding connecting to the grid.
Supporting businesses in their Energy Transition approach, leading them through the renewable options available whilst aiming to save money, and demonstrating how each of us can play a part in making a difference, is key.
There is always a route despite the pressures, and the more organisations can gain awareness of this, the faster the transition will go; with this the more chance there is of collectively reaching our goal of net zero.
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