Thinking of going circular? Start with your energy
Businesses are increasingly looking to move away from linear to circular models in their operations and supply chain as we strive to reach our Paris 2050 goals, but where does energy fit in this picture and how can it help businesses be sustainably profitable and profit sustainably?
Why go circular?
According to the World Economic Forum, humans extract over 84 billion tonnes of materials per year to meet the functional needs of society, yet only 9% is cycled back into our economies. These resources are finite and costs will rise as they grow more scarce, which has huge ramifications for global business.
The circular economy offers an important answer to these urgent environmental, economic and social challenges through keeping resources in use for as long as possible and extracting the maximum value from them whilst in use and creating new lives for products and materials, whilst remaining economically viable. The WEF estimates that the circular economy provides a $4.5trn opportunity for businesses through avoiding waste, making businesses more efficient and creating new employment opportunities.
We see energy as the glue that binds business and consumption together- every business needs power to operate and produce. It’s our view that energy can make a vital contribution to the circular thinking model. But how?
We discussed this topic at our recent TalkPower event where we invited colleagues and customers from our business community to debate this topic.
Three key questions emerged from the vantage points of very different roles in the industry.
1. What does the circular economy mean to businesses in practical terms?
Circular Economy can seem academic or ‘nice in theory’ to many people- we get the concept but aren’t sure how to apply it to day to day operations. Put simply though it’s about systems change and about taking actions in business that are real and practical to eliminate waste and pollution. The circular economy may seem complex, confusing and can easily overwhelm. But unlocking its value can be made simple: change your mindset.
One of our speakers, Oliver Hurrey from Manufacture30, illustrated this point with a story about his experience on a six-hour bus journey to Davos in 2016 where he was to participate in the Circular Awards. He explained that talking to his fellow passengers, he came upon two circular businesses that reflect two very different approaches to going circular. The first was an entrepreneur who had invented ‘air carbon’, a way of extracting the carbon from air to manufacture sustainable plastic. The second was a social entrepreneur who had created an enterprise employing refugees to turn old shirts into pants.
The key point of this anecdote? There are many different kinds of businesses going circular. Some are big, others small. Some are based on technology-driven innovation, others handcrafted ingenuity. Some may deliver billions of pounds in value, others may raise people out of poverty. But all of them have one thing in common: circular thinking.
“If we change the way we think about our businesses, we’ll change the way we do business,” he said – and even small changes, like in the way we use, save and manage our energy, can change the value we generate.
2. Why is energy a great place to start making your business circular?
Another speaker, Adriaan Kamp from Energy for One World, answered by saying that it’s energy – not money – that makes the world go around. After all, it’s energy that turns materials into money. But he explained that it’s time for all businesses to make sure our products are not only affordable and available, but also good.
He cited the three pressures that all sectors, including energy, face. Globalisation, climate change and dwindling resources. It’s time now, he declared, for us to make such a transition in business in general and energy in particular, where we must change the state of power.
He said only 20% of the world’s total energy consumption is from electricity, the rest is from fossil fuels. Our goal must be to raise this to 50% – and fast if we are to avoid climate disaster. For Kamp, the circular economy represents an opportunity for all business to change so that we can make, use and consume without guilt.
Applying this to our industry, he explained, going circular will enable us to make the bridge between energy free of concern and an economy free of concern.
3. How can you change the way you use energy right here, right now?
You can start going circular with your business’ energy with one change at a time. Here are our three areas where you can make changes today- without risk, without extensive investment and without concern.
1) Boost your efficiency
Through efficiency tools and monitoring, you can understand how much energy your business is using, identify where to save and how much. You can also turn waste into energy by turning your carbon-rich organic waste into bio-fuel to heat and power your business.
2) Lower your carbon
Work with your supplier to choose green business tariffs to get energy supply from low carbon sources, switch to renewable energy– switch to a contract backed by certified renewable sources so you can report zero emissions and support the uptake of renewables. If you are already doing these things you may want to look into making your own energy by taking the fuel mix into your own hands and generating your own energy which will reduce your energy supply costs, hit your carbon reduction targets and even create a revenue stream. One huge impact you can have on your carbon footprint is to electrify your fleet to reduce your mile to mile running costs and cut carbon emissions by 66%.
3) Flex to earn
If you can be responsive with your energy and give it back to the Grid or to other businesses when needed, you can earn cash rewards. Your supplier will be able to advise you on the Demand Side Response (DR) schemes available to help you save and earn on your energy bill. Another option is Combined Heat and Power (CHP) where you can recover heat that’s being wasted and give it a second life by heating and powering another part of your operations. The journey to a circular model is not a one you have to do on your own. Finally there is the option of battery to boost the value of your energy so you can store cheaper or renewable energy to use later when it costs less to use. You can even sell it if you don’t need it- energy used, shared and never wasted.
The journey to a circular model is not a one you have to do on your own. Your supplier can help you with every change, at every step of the way. But it is a journey that will be good for your business, for your world and for our future generations.
Vincent de Rul is director of energy solutions sales for EDF Energy