Reduce, generate and store: SMEs urged to capitalise on energy transition

UK SMEs can thrive in a low-carbon economy if they follow the mantra of 'reduce, generate and store' as a way to revamp energy costs during an era of "unprecedented disruption", a new whitepaper from financial solutions partner DLL has claimed.

Launched on Wednesday (14 December) the Cost of Energy whitepaper explains how SMEs can embark on a three-step journey that sees them reduce energy costs before making sensible financial decisions aimed at harnessing the technological advancements of on-site generation and energy storage systems.

“When it comes to energy, too often we see misperceptions around affordability and a lack of big-picture planning stopping businesses making hugely beneficial investments,” DLL’s country sales manager of clean technology Jonathan Evans said. “We always advocate starting by looking at energy efficiency, but this paper is about helping CEOs to think strategically about their broader energy future to inform investment decisions now.”

The paper notes that SMEs currently represent more than 99% of all UK businesses, employ more than 15 million people and account for 45% of the UK’s energy use. But. With 55% of SMEs lasting less than five years, the whitepaper calls on business owners to manage current energy costs through established efficiency measures such as LEDs, HVACs and Combined heat and power systems.

According to DLL, external measures such as ESOS have spurred larger companies into promoting energy efficiency and BEIS now estimates that businesses can achieve savings of 18-25% by implementing recommended measures, with an average payback of less than 1.5 years.

A recent edie survey on behalf of E.ON reveals that more than 70% of the survey’s respondents placed themselves as ‘Self-sufficient’ in regards to energy efficiency, while 44% claimed that their organisation – which ranged from SMEs to businesses with more than 5,000 employees – is now generating revenue from energy efficiency.

With many companies now able to get to grips with energy efficiency, the DLL whitepaper calls on SMEs to react to changes outlined in the National Grid’s Future Energy Scenarios, which highlights how renewables and flexibility will become core business aspects across future scenarios.

With this in mind, the whitepaper calls on SMEs to embrace on-site renewables and energy storage technologies – which the World Energy Council claims will fall by as much as 70% by 2030. While these technologies usually come with a longer payback period, the whitepaper notes that tax breaks and PPAs can both be used to aid with the financial transactions.

SME struggles

Yet some SMEs are still struggling on tackling energy efficiency. According to Zero Waste Scotland, Scottish SMEs are wasting £19,000 every year by neglecting simple energy efficiency improvements.

In fact, a large proportion of Britain’s SMEs believe that the Government should provide grants towards the installation costs of energy efficiency measures.

Energy storage, in particular, offers a viable route to commercialise some of the energy that an SME is able to generate or reduce. The Herald and Times Group has discovered a new revenue stream worth up to £250,000 after becoming the first newspaper group to sign up to Edinburgh-based aggregator Flexitricity’s demand response initiative, and with the National Grid announcing 201MW of winning battery storage bids for enhanced frequency response, SMEs have been urged to follow the trend.

Matt Mace

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