How to be a net-zero winner
As part of edie's Net-Zero Carbon Playbook, Centrica Business Solution's net-zero product manager Alex Lowe explains the steps that organisations can take to thrive during the net-zero transition.
As this report illustrates, radical action is required now and decarbonising your energy is the best place to start. The savviest organisations realise that energy can be their greatest sustainability asset – an opportunity to generate market revenues through asset flexibility, build resilience into their business performance and create positive brand stories through tangible sustainability impact.
Avoid the risk of higher carbon costs
They also recognise that failure to act now will expose their business to excessive carbon cost risks. This is illustrated by record-high carbon prices on the EU Emissions Trading Scheme (ETS) – up 100% over the last 12 months to around 50euro/tonne – and is reflected even more sharply in the new UK ETS – clearing for the first time recently at £50/tonne.
Tougher climate policies are predicted to drive continued increases as governments double down on emissions reduction; indeed, the UK Government recently announced its intention to align its ETS to the national net-zero target from 2024 onwards which is likely to mean higher carbon prices being applied much more widely across the economy. This announcement is already changing the cost vs carbon calculation significantly among carbon-intensive business energy users, many of whom are opting for high integrity carbon reduction to reduce exposure to potential carbon prices and taxes.
Plan for your net-zero pathway
There’s lots of different routes to decarbonisation and many proven, cost-effective technology solutions to start you on your journey. But you won’t get anywhere without a robust roadmap and Plan. You need to understand your energy consumption in depth, calculate a baseline for your carbon emissions and then build a science-based pathway to net-zero by 2050 at the latest. Understanding the likely capital and operational expenditure requirement for your pathway is crucial, so you can begin to allocate capital appropriately.
Cut your energy demand through efficiencies
The first implementation step is to cut energy consumption as much as possible using energy efficiency. This process of reducing demand is the most impactful thing any business can do as they start their net-zero journey and eliminating energy waste is critical for achieving net-zero cost-effectively. With many rapid payback technologies available, you can realise fast financial and environmental gains simultaneously, which will be a crucial contributor for funding the more expensive stages later in your transition.
Implementing a smart energy monitoring platform such as Energy Insights to drive continual operational efficiency improvements will be a key enabler of the efficiency phase.
Convert onsite infrastructure to support renewable energy
From this point, you can shift your net-zero strategy up a gear by exploiting distributed energy technologies at your sites, such as renewable on-site generation and energy storage. Lower Solar and Battery technology costs provide a win-win opportunity to improve both environmental and financial performance.
These technologies are a critical part of the Convert phase, but just as important is switching your on-site heating infrastructure away from natural gas and switching from ICE vehicles to EVs. Based on currently available technology, your best route to decarbonising both your heat and transport is likely to be electrification. You can realise the benefits of an ever-cleaner electricity grid by installing electric Heat Pumps and Electric Vehicle Chargers.
Moving away from natural gas, petrol and diesel will have the biggest impact on carbon reduction for most businesses, but you need to plan the optimal moment to make the switch and to prepare financially for the cost hurdles this phase will present.
Complete your journey using off-site renewable energy supply
The final stage of your net-zero journey will be the ‘complete’ phase, where you can use off-site renewable electricity options such as Renewable Power Purchase Agreements (PPAs) to procure your energy and take your carbon footprint the final stage to zero.
If your organisation is not mobilising to get ahead in the race to net-zero, you risk missing out on the benefits of decarbonisation. You’ll miss out on opportunities to gain new customers and differentiate from competitors. You’ll risk alienating your investors and employees. And you’re likely to fall foul of highly punitive carbon prices within this decade.
When selecting your preferred option for this stage, it’s important to prioritise additionality (building new renewable generation) and traceability (matching the energy you consume with a location and time of renewable generation within your jurisdiction). This will represent the highest integrity path and will therefore future proof the credibility of your net-zero journey.
Overcome cost constraints and financing your journey to net-zero
Although there’s a long-term cost of inaction on net-zero, short-term Capex barriers are slowing progress on decarbonisation for many businesses. In these instances, you can make use of enhanced capital allowances or Opex-based finance.
One example is our Energy as a Service solution, which accelerates complex low carbon infrastructure projects by removing risk resource and financial pressures. This enables you to pay off your investment over an agreed contract period while gaining immediate carbon-saving benefits.
The Net-Zero Carbon Playbook
We know the net-zero carbon future we want to achieve. But how are we going to achieve it? Inspired by edie’s award-winning Mission Possible campaign, this Net-Zero Carbon Playbook inspires and empowers businesses to ramp up efforts across all areas of sustainable development to achieve net-zero.
Produced in association with Centrica Business Solutions and featuring input from The Climate Group and our Countdown to COP26 Festival partner O2, the report provides this unique insight and inspiration through the lens of five interconnected pillars related to the future of sustainable business: Energy, Resources, Mobility, The Built Environment, and Business Leadership. The document will provide a net-zero carbon progress report across all of these areas; empowering businesses to take specific actions to accelerate that progress themselves.
The report features forewords and contributions from the Climate Group, O2 and Centrica Business Solutions, all of which articulate the opportunity that businesses have in delivering a net-zero carbon future. Businesses are also invited to upload new carbon-based pledges to edie’s Mission Possible Pledge Wall.
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