Energy challenge: Managing costs and cutting carbon sustainably

Posted on 23 May 2022 by The Manufacturer

In 2019, the UK became the first major economy to set legally binding targets on achieving net zero carbon emissions by 2050. Despite having successfully cut carbon emissions faster than any other G7 member, the Committee on Climate Change has warned that Britain will miss its target without more action to change behaviour.

Manufacturers, as part of one of the most energy intensive industries in the country, have their role to play in meeting these targets.

Make UK recently reported that, six months on from COP26, 65% of manufacturers have taken a positive step to achieving their net zero targets over the last 12 months, with another 35% already having implemented net zero strategies.

But as energy prices remain at historical highs, balancing energy costs and net zero goals is increasingly tricky for many. Combining energy insight with modern energy technology is important to meeting both goals.

Knowledge is power

While it’s clear that investing in greater sustainability is on the agenda for manufacturers, the truth is that many are still wrestling with the question of where to start when it comes to the journey towards net-zero.

We use the three c’s as a pathway to controlling energy and carbon within any business. Cut, Covert, Complete

The first step should always be to understand current energy use and make cuts where possible to reduce your demand.

Energy sensors give you the ability to check energy usage in real-time and provide you with invaluable data-driven insight.

For example, the data can be used to find peaks and troughs in energy consumption and inform operational decisions like scheduling energy-intensive equipment not to run at peak times. What’s more, the data could show when equipment is using more energy than normal, suggesting potential faults that can be diagnosed before they hit.

With a more comprehensive understanding of how they consume energy, businesses will be able to take proactive steps towards minimising energy waste and lowering costs.

Reduce costs, increase revenue

The second step is to convert as much generation as possible to zero or low carbon. The manufacturing sector has been heavily impacted by global price rises given the increase in the cost of goods as well as the energy-intensive nature of its operation.

Sophisticated energy technology – such as on-site energy generation and storage solutions – can help manufactures meet their energy needs by generating, storing, and managing their own energy on-site, independently off the grid.

For example, investment in on-site renewable infrastructure such as solar panels and battery storage can enable manufactures to directly generate operational power. Surplus energy that is not needed right away can be stored in the battery to be deployed later, for example when the weather is cloudy, and the panels are not generating enough electricity to power the business.

Any energy generated on-site that isn’t being use or stored can be sold back to the grid. Implementing a demand slide response (DSR) system that optimises energy technology and redistributes generated energy back to the grid can earn manufacturers revenue too. By adopting DSR, manufacturers can turn a cost into a commodity, helping to reduce their energy bills.

Green is good

Step three is to complete the journey, by ensuring what can’t be generated locally is generated sustainably. The adoption of Power Purchase Agreements (PPA) is becoming increasingly popular among manufacturers. As the pressure mounts for the industry to make more environmentally friendly business decisions, these provide a simple and cost-effective way for firms to take positive steps towards reducing their carbon footprint.

A PPA is simply a contractual agreement between an energy buyer and seller over energy generated by a renewable asset, typically over a long-term period of say 10-20 years. For the renewable energy generator, it provides the financial certainty it requires to invest in a wind or solar farm. For the business it provides a guaranteed source of the renewable energy, that they can touch and feel – so that every megawatt-hour of electricity a business uses is accounted for and compliant with science-based targets.

Investing in sustainability 

As the pressure to achieve net zero continues to mount along with energy prices increasing, the case for manufacturers to optimise their energy infrastructure has never been clearer.

Working with the right partner, business leaders can ensure that becoming net zero is both good for the planet and good for business.

For more information visit: Centrica Business Solutions.

To read similar articles, check out our sustainability channel.

About the author

Justin Jacober, MD of Centrica Business Solutions

Justin Jacober is Managing Director at Centrica Business Solutions. He has more than 20 years’ worth of experience helping firms reach their sustainability goals through clean energy solutions. He leads a global team focused on delivering a decentralised, flexible energy system that can help reduce carbon emissions and harness renewable resources.