With net zero high on everyone’s list of priorities, Henry Anson, Managing Director at the Hennik Group, outlines the latest round table discussion focusing on what steps manufacturers could be taking on their own personal and professional sustainability journey.
As part of our ongoing series of Directors’ Forum virtual round tables we ran a session, in partnership with Drax (Haven Power & Opus Energy), at the end of January with 11 leading manufacturers entitled Building a Sustainable Business: The Journey to Net Zero.
These sessions, over a bottle of wine shared are absolutely invaluable for us here at The Manufacturer to keep our finger on the pulse of what the sector is grappling with in these extraordinary and fast moving times.
But it was with a degree of nervousness that we approached this session on sustainability. Pre-pandemic, and towards the back end of 2019, my personal theme or ‘pick’ for 2020 was that sustainability would be the issue of the year for the UK manufacturing sector. Clearly events overtook this and 2020 became, in many cases, a battle for survival, working safely, dealing with massively disrupted supply chains, changing customer behaviour, etc.
Was sustainability even on the main board agenda in early 2021 or was it an issue and ambition that had been put on the back burner?
Achieving net zero
The encouraging result from the focus group was that sustainability was on every attendee’s agenda and all were actively trying to reduce energy consumption, improve efficiency and drive out waste. Naturally there was a huge range of understanding, capability and ambition, ranging from an exemplar manufacturer who has already achieved a net zero operation to the majority who had taken the traditional early steps, such as installing LED lighting and choosing ‘green’ energy, and were looking for inspiration, advice and guidance on the next phase of their sustainability programmes.
“There was total agreement that all manufacturers had a moral imperative to achieve lower carbon emissions and strive for a net zero position, with several referring to consumer pressure and also ‘pester’ power from within their own families and networks as motivation. There was also an understanding that reducing energy consumption and therefore improving operational efficiency was good old-fashioned common business sense.”
There was frustration that the bureaucracy and the time involved in measuring energy consumption could make the journey to net zero feel like yet another form filling burdensome exercise, with no common (or at least easily understood) standardised measurement protocol.
Tim Cole and Kate Hart from Drax stressed that data collection and visualisation is the key to understanding electricity usage patterns and looking for ways to reduce energy and spend – for example, by being more efficient with electricity usage over the peak (and expensive) times of day. Some energy suppliers are developing advanced software tools to make this data collection easier, and proactively offer ways to reduce usage.
Smart meters can also be used to collect and show data and optimise savings, with polyphase SMETS2 meters being trialled for larger consumers who previously haven’t been able to benefit from Smart energy technology. Large energy consumers can also partner with energy experts who can help them manage their consumption, report their carbon and find clever ways to save.
Tim and Kate addressed and robustly countered another major concern, that the journey to net zero was a costly and time-consuming exercise. Clearly reducing energy consumption, making the times in which you use most energy more efficient, better monitoring of machinery and so on will result in energy being used more efficiently and drive down cost. They also talked in depth about the various partnerships that manufacturers could utilise to avoid capex and generate electricity from their own sites, with energy companies such as Drax.
Long-term power purchase arrangements (PPAs) can be made between renewable electricity generators and manufacturers, where the generator installs and runs the equipment and supplies the electricity to the manufacturer for an agreed price, although payback tends to be far longer than the usual five-year business cases. Connecting certain machinery to the grid and using it to offer electricity flexibility can also make savings on your energy bill, which can be used to offset investment in electricity generation technology.
On-site generation is another good way to reduce carbon, reduce energy bills and generate revenue. There’s a lot of choice out there for anyone able to invest a little in order to make long-term gains, for example technology including wind, solar, anaerobic digestion, hydro and combined heat and power (CHP). Energy partners can help with everything from deciding the best form of generation technology to the most suitable type of PPA.
Sustainability, for all of us in our professional and personal lives, is the direction of travel and as major users of energy and emitters of carbon, the manufacturing sector has to embrace this journey and also has the opportunity to be part of the solution by looking at your site(s), generating your own energy and selling surplus back to the grid.
Above all, greater efficiency on energy consumption just makes sound business sense. R&D also plays an important role for new, lighter materials, for example lighter trains/cars require less energy to move them.
A huge thank you to Tim and Kate from Drax for making this event happen and, obviously, to the 11 manufacturers who gave up their time to be part of this important debate about the future of the sector and the world we live in.
Henry Anson, Managing Director, Hennik Group
Images courtesy of Shutterstock