Embracing the lasting value of decarbonised business

Equans’ Energy Solutions Director, Gregory Allouis, reflects on technologies, financing and timescales to outline a path to lower carbon emissions, and more sustainable and resilient organisations.

Embracing the lasting value of decarbonised business

It is broadly accepted that the first half of this decade has been challenging for UK organisations. From Covid-19 and geopolitical tensions to the associated inflationary and cost of living pressures, there has been a sense of permacrisis which creates a natural tendency for organisations to look at the numbers and deprioritise activities not considered core to business objectives – such as net-zero solutions.

From my experience working with private and public sector organisations alike, it’s clear that it is not only possible to implement and progress a broad range of net-zero measures through economic headwinds – it is a vital feature to long-term success.

In the public sector, local authorities have remained steadfast on their path to net zero despite other significant pressures in providing core services. For example in Cambridgeshire, we are supporting the County Council’s commitment to reaching net zero carbon by 2050 by working in partnership with them to deliver the UK’s first rural renewable heat network at Swaffham Prior. The network is accessible to 300 homes in the village and is delivering 100% renewable heat to numerous residents, replacing the existing carbon-intensive stored fuel infrastructure to significantly reduce the village’s carbon footprint.

The public sector can largely balance these requirements successfully because of its ability to develop strategic partnerships with specialists and other key stakeholders, which is a vital step to achieving net zero. Strategic partnerships allow organisations to access decarbonisation expertise and embrace green technologies more readily, but also enable the progression of these types of projects while the business concentrates on its core objectives.

When embarking on decarbonisation, many businesses have achieved positive carbon savings through energy efficiency measures, which can save significant costs. Adopting technologies such as on-site renewables and EV charging infrastructure can also save costs while delivering better operational resilience. Driving deep emissions cuts however requires significant upfront investment and this is where thorough planning, through a zero carbon roadmap, alongside long-term and innovative financing options, is necessary.

Net zero roadmaps must be bespoke according to the organisation’s challenges, priorities and needs; further outlining the requirement for specialist support to ensure businesses can take the most effective steps to achieve their goals. Taking into account where a business is on its net zero journey, the roadmap must translate emissions analysis into targeted services, solutions and approaches for decarbonisation investment.

The plan should remain flexible as economical net-zero investment changes over time – opportunities that are not feasible now will become worth exploring as the cost of green technologies are expected to fall while fossil fuel costs will continue to fluctuate globally.

When considering funding options for decarbonisation projects, traditional borrowing has now become less justifiable as the era of low-cost finance available throughout the 2010s has now come to an end. In these circumstances, making large capital investments is largely off the table, and projects must find ways to turn the expenditure into more long-term, easily manageable operating costs.

In the example of the Swaffham Prior heat network – an innovative funding model was deployed with grant funding and project support from the Department of Business, Energy and Industrial Strategy. The renewable heat bills are no more costly to residents than the incumbent fuel oil system. Not only that, but emissions reductions should rise to 96% by 2030 and 99% by 2050 and will generate long term revenue for the Council; such a model demonstrates clearly how cost and environmental objectives can be married together to deliver an outcome that is advantageous to all.

Regardless of tough economic headwinds, there is no shortage of investors interested in enabling climate solutions – money is available to finance these projects. This might be through grant funding such as the Government’s Industrial Energy Transformation Fund (IETF) for manufacturing organisations or the Department for Energy Security and Net Zero’s Public Sector Decarbonisation Scheme (PSDS) in the public sector. In the north east, we have partnered with Newcastle City Council to decarbonise a range of public buildings across the city, enabled by a £27m PSDS award. The funding has unlocked the delivery of low carbon heating such as heat pumps and other energy efficiency measures including solar panels, LED lighting and improved insulation – saving over 4,000 tonnes of CO2 per year.

Financing may also be accessible through stakeholder or investor capital to name a few – there are many investors and members of the public who want their money to be invested in something that is meaningful, and beneficial for society. It is however easier for large businesses or public sector organisations to get access to external funds than it is for small businesses, and there is work to do across the economy to ensure these funds can be delivered to those public and private sector organisations that want to accelerate their decarbonisation efforts.

But if those barriers to accessing such finance can be addressed, then existing or emerging clean technologies can be leveraged to deliver both deep emissions reductions, significant long term cost savings and the advancement of sustainable energy systems to attract further investment

Despite the challenging economic climate and the closing gap to reaching net zero by 2050, the business case continues to stack-up for organisational carbon reduction measures – aligning with future investment opportunities and customer preferences whilst increasing operational resilience, to name a few reasons. By partnering, planning an effective roadmap and securing innovative and long-term solutions to deliver deeper emissions cuts, businesses can create more sustainable operations fit for 2050 and beyond.

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