The road to net-zero: Three top tips for decarbonising your business
COP26 is just a few months away. There is rightly more focus on understanding the practical role that businesses will play in the global fight against climate change as we head towards the UK's 2050 net-zero target.
At Centrica, we recognise COP26 is a significant milestone in the UK's journey to reach net zero, and we, along with the broader energy sector, have an important role to play. That is why we are committed to becoming a net-zero business by 2045 and supporting our customers with a range of services and solutions to help reduce their emissions to net-zero by 2050.
However, reaching net-zero is not something that businesses can achieve independently. In addition to working together with customers, non-governmental organisations and other important stakeholders, the right policy and regulatory frameworks are needed to support businesses on this journey.
In November 2020, the UK Government’s Ten Point Plan outlined its approach to building back better, supporting green jobs, and accelerating the path to net-zero. The upcoming Heat and Buildings Strategy, Transport Decarbonisation Plan and Hydrogen Strategy should also provide clarity in their respective areas, enabling businesses to make the right decisions about how best to invest money, time, resources and capabilities to reach net-zero.
At Centrica, we acknowledge there is no one-size-fits-all approach to reaching net-zero. There is no silver bullet. As a customer-facing business, we also recognise that the next phase of decarbonisation will involve the consumer more closely than ever. For example, we must help our customers transition to low-carbon heating in a way that best suits their lifestyle and is affordable, and causes the least disruption. Customers must buy into the solutions if we want to stand a chance of getting decarbonisation right.
For business-to-business operations, the transition must balance the need for carbon reduction with cost reduction and resilience. With this foundation in mind, here are my three top tops for decarbonising your business:
1) Reduce and optimise your energy use
Looking at ways to reduce energy use within your business may seem like a simple first step, but it is essential to act on it before you do anything else.
It starts by using data to understand how your business uses energy, where there are opportunities to use less of it, and how you can optimise the energy you are using. The more you know about and understand your energy consumption, the better you can manage it. It is worth getting advice and support from a specialist partner to help make sure this data is robust before it is turned into actionable analysis that can inform future energy plans.
Real-time monitoring is an effective way to make sure you have the robust data you need. You can use the collected data to help you create an asset inventory, diagnose emissions hotspots, analyse trends over time and pilot ways to cut the carbon you emit. Heat accounts for approximately 40% of energy consumption, with 65% of non-domestic buildings using natural gas for heating. For these reasons, heat should be an integral part of your plan to reduce energy use.
There is a wide range of options available for smartly optimising your energy use. A focus on Demand Side Management will enable your business to gain control over the timing and the amount of energy you use by shifting energy consumption from peak to non-peak hours or by maximising the consumption of clean energy. Even greater carbon and cost savings can be achieved when combined with battery storage or local solar generation.
If you are one of the UK businesses that are set to invest £15.8bn in the electrification of their vehicle fleets over the next year, you can optimise your energy use by making sure that you are charging your electric vehicles the most sustainably and economically way. This should include switching to a green time-of-use tariff that offers cheaper, off-peak electricity overnight so that you can charge your electric vehicle while you sleep.
2) Choose clean energy
Using cleaner sources of energy is another part of the journey to decarbonise your business. Furthermore, it is an area that is becoming increasingly more important to customers who want reassurance that businesses are committed to using sustainable forms of energy.
Your first step is to seek out high-quality green tariffs. British Gas offers a range of green business energy tariffs, including 100% renewable electricity, independently certified by the Carbon Trust. This provides confidence in the quality and origin of its renewable status as part of sustainability reporting requirements. We can also offer green gas tariffs, and it is vital that whatever supplier you use, such products are associated with credible offsetting schemes.
Power Purchase Agreements, which are long-term supply contracts for trading power from an independent renewable power generator to a business, offer a more direct way to meet your clean energy requirements.
3) Fuel switching
I have already mentioned that a range of technologies is needed to help with decarbonisation, which also applies to your business. Fuel switching technologies such as electric vehicle charging solutions, heat pumps, and hydrogen needs to be considered part of the solution. Every business is different, and the suitability of the technology and speed of adoption will depend on your energy strategy.
Moving to electrification is something that you should consider to help decarbonise your business. This could include transitioning from gas-powered heating systems to heat pumps or hybrid heating systems.
Although not currently available, switching from gas to hydrogen in commercial heating systems and industry operations has the potential to provide a viable way to reduce emissions in the long term, particularly for industrial processes that require high-intensity heat.
Although many of these solutions exist today, it is how they will develop and become commercially viable that is important for the role they will play in decarbonising your business. That is why developing and implementing a long-term integrated sustainable energy strategy tailored to your long-term business needs is critical to ensure a smooth transition towards net-zero.
Jim Rushen, Group Head of Environment, CentricaCentrica Business Solutions