Anthony Ainsworth, Chief Operating Officer at npower Business Solutions, makes the case for business-generated power to reduce costs, lower emissions and increase energy security
For more than a year, the UK energy market has experienced a period of unprecedented volatility with resulting high wholesale prices impacting all businesses. While policymakers have now put short-term plans in place to offer some relief from rising energy prices – including the Energy Bill Relief Scheme (EBRS) announced in September 2022 – a longer-term and more sustainable approach is needed to help businesses reduce energy demand and limit their exposure to the global markets.
That said, many businesses are already taking control of their own energy future by investing in sustainable on-site generation. In fact, in npower’s Business Energy Tracker report from early in 2022, more than a quarter (27%) of respondents said they are planning to invest in this measure to combat energy risk.
It’s easy to see why. Not only does it provide businesses with a route to lower energy costs, increased self-sufficiency and reduced dependency on the grid, it also helps reduce emissions. But, looking beyond this, it could also enable them to play a crucial role in decarbonising the UK’s energy system by reducing our dependence on imported natural gas, resulting in lower costs and greater energy security.
16 TWh of power
npower’s report – The Future of Energy: The critical role of business in a zero-carbon world – uses new modelling to assess whether on-site generation technologies, including wind, solar photovoltaic (PV), battery storage, biogas and biomethane, could feasibly replace the electricity generated from imported natural gas by 2035. This was based on the projection from the Climate Change Committee’s Sixth Carbon Budget that, by that date, the UK would require 16 TWh of power from imported natural gas.
The scenarios in the report show that by 2035:
- on-site wind capacity within commercial and industrial facilities could reach between 6 and 29 GW
- installed rooftop solar PV could account for 6.5GW
- biogas power generation could be up to 16TWh
- hydrogen and biomethane injection could be close to 33 and 7.5TWh, respectively.
In addition, the report predicted that having more business-generated power will lower energy costs, with the overall levelised cost of electricity for the proposed options ranging between £49 and £261/MWh, lower than the wholesale prices we’ve seen recently. Crucially, it will also support the net-zero ambition, with emissions savings of up to 6.7 MtCO2/year.
Making a case for change
Building engineers can act now towards net zero and a more resilient energy future by understanding the business’ current sustainability status and building the case for investment.
To help assess the most suitable path to net zero for your organisation, it is important to have insight on how you are currently using energy and what impact your efficiency and sustainability projects are already having. That way, you can understand the best measures for the future, so you can plan an effective and sustainable energy strategy. Tools such as npower’s Net Zero Calculator can help.
Building the commercial case for any kind of net-zero investment such as on-site generation can be challenging. Therefore, it is important to clearly demonstrate the benefits it will bring, for example:
- reduction in carbon emissions: on-site generation technologies that use 100% renewable sources – such as solar PV or wind – will help a business significantly reduce its carbon footprint
- lower energy costs: installing on-site generation technology can make a real impact on the bottom line through a reduction in energy costs, as a site will only generate the energy the business needs to use, naturally operating in a more efficient way
- greater control: an on-site supply helps to protect businesses against wholesale price volatility, meaning you can plan ahead with greater certainty; and
- improved reputation: installing on-site generation is a clear signal that your business is serious about sustainability, particularly in the eyes of customers and throughout your supply chain.
Working with an energy partner can help you assess the best options for your business, from making the move to renewable supply to exploring the benefits of sustainable on-site generation, battery storage and electric fleets.
The Future of Energy report shows that businesses really do have the power to shape our energy future. However, achieving this requires policy and incentives to support it, such as tax deduction for equipment purchases, which could further encourage businesses’ involvement in energy production.
What npower set out to demonstrate was the potential. This modelling provides a compelling case for policymakers to encourage more businesses to be part of the 2035 zero-carbon system and contribute to the national agenda of energy independence and net zero – both now and in the future.
The Future of Energy: The critical role of business in a zero-carbon world npowerbusinesssolutions.com/future-of-energy
npower Net Zero Calculator npowerbusinesssolutions.com/net-zero-calculator
npower’s Business Energy Tracker npowerbusinesssolutions.com/businessconfidence