On 24th October in London, The Crowd brought together 160+ senior energy, sustainability, property, and facilities professionals for X Energy 2017.
This impactful half day event explored the intersection of energy and tech, inspiring and connecting the leading minds from a mix of energy intensive sectors.
We explored how disruptive technologies, new energy management strategies and financing models are exponentially changing energy programmes in large organisations, and shared knowledge and latest thinking amongst the community. The programme on the day was a mix of inspiring keynotes, high level panels, peer roundtable discussions and structured networking.
Last year’s event began with a brilliant short keynote from Mustafa Suleyman, Co- founder of Google’s DeepMind, on “how Artificial Intelligence can have a positive impact on energy and beyond” (you can watch it here).
13.00 Arrivals and networking
13.30 WELCOME: Luke Clarkson, Managing Director, The Crowd
13.35 KEYNOTE: Albert Cheung, Head of Global Analysis, Bloomberg New Energy Finance
How technology has changed the future of energy. The last few years have seen an acceleration in energy technology development with solar, wind and battery technologies advancing faster than ever before. But the best is yet come, and businesses will play an ever-more important role.
13.55 LEADERSHIP PANEL
What is the business case for leadership?
Paul Crewe, Head of Sustainability, Engineering, Energy & Environment, Sainsbury's
Paulina Bohdanowicz-Godfrey, Director Energy and Environment Europe, Middle East and Africa, Hilton Worldwide
Alan Young, Managing Director, Corporate Affairs, SSE
Louise Ellison, Head of Sustainability, Hammerson
Tim Brooks, Vice President for Environmental Responsibility, LEGO
Moderated by Helen Clarkson, CEO, The Climate Group
14.45 ROUNDTABLES: Attendees select their roundtables before the event. Peer discussions on a range of topics in groups of 10-12.
15.30 NETWORKING BREAK
16.00 DISRUPTION SHOWCASE & PANEL
How can businesses best prepare for energy management disruption?
Mark Kenber, CEO, Mongoose Energy
Jo Jo Hubbard, Co- Founder, Electron
Archie Wilkinson, Head of Pavegen LIVE, Pavegen Systems
Chris Wright, Co- Founder & CTO, Moixa Technology
Moderated by Albert Cheung, Head of Global Analysis, Bloomberg New Energy Finance
17.00 ROUNDTABLES: Attendees select their roundtables before the event. Peer discussions on a range of topics in groups of 10-12.
Many organisations are now using various tools and software to identify energy efficiencies in their buildings. But what happens next? On this table, we discuss how building information modelling (BIM) can be used to deliver optimal energy performance and productivity in new and existing buildings. What are the barriers to optimising building? How can we collaborate and share best practice? What part do disruptive technologies play?
BIM is a process of communication. Level 2 BIM, for example, is distinguished by collaborative working – all parties use their own 3D CAD models, but not necessarily working on a single, shared model. The collaboration comes in the form of how the information is exchanged between different parties. Communication is facilitated through open protocols such as IFC (AND gbXML.
A federated (Level 2) BIM can be split between BIM architecture and BIM simulation. BIM architecture uses IFC, which is less capable of thermal analysis than BIM simulation - which uses gbXML. In the UK it is typically necessary to be able to use gbXML protocols for compliance modelling, although some simulation tools such as IES VE can now import IFC files.
1) A perceived obstacle raised by members of the round table is that there is no standardisation of data - even internally in large companies - before accounting for suppliers. However, BIM introduces standards for product naming and data formats. Therefore, is the obstacle one of standardisation or dissemination, adoption and integration into extant processes?
2) BIM is perceived as only being suitable for new buildings, introducing a requirement for BIM managers and specialists to ensure its successful transition into the operational environment.
3) There are challenges in terms of ensuring the BIM is kept accurate through its development, through the as-designed and as-built stages. For example, as contractors make changes during the construction phases: how is this managed? For BIM to be successful it requires complete ‘buy-in’ from all stakeholders, including post construction actors such as FMs and term contractors
4) BIM is perceived as being very expensive, and there are concerns over the value (£) it brings to the construction and asset management stages of ownership.
6) BIM is thought to be only suitable for large buildings.
7) There are concerns over cyber security, with hackers being able to gain detailed information on security systems and BMS controls etc.
1) A greater understanding of BIM naming conventions such as CIBSE product data templates and the Construction Operations Building Information Exchange (COBie) non-proprietary data format
2) BIM is a great solution to the challenges of maintaining onsite (paper) O&Ms etc. providing a centralised online system for storing plans to avoid data loss when assets change hands
3) BIM users, proponents and wider industry need to be better at engaging with clients to demonstrate the cost and administrative savings that can be had through BIM implementation.
4) BIM is a process comprising of BIM architecture (typically systems using IFC) and BIM simulation (typically systems using gbXML). BIM simulation is considerable cheaper to develop than BIM architecture and new functionality and new open protocols, such as IMPACT software developed by the Building Research Establishment, means that developing a BIM need not be an expensive process. This would align and support regulatory compliance around Building Regulations, the production of EPCs, and Minimum Energy Efficiency Standards.
5) A BIM created by simulation software could lead to increased energy savings as demonstrated by the Australian NABERS scheme - where accurate energy models are developed, maintained and utilised for operational purposes. Research by the Better Buildings Partnership shows that Australian buildings are far more efficient than their UK counter parts.
6) The models could also support non-regulatory benchmarking such as BREEAM and LEED, supporting other value drivers around capital/rental value.
7) Software companies are driving the market towards greater system security, as they're all on a corporate's own network.
1) BIM and open protocols aren't necessarily disruptive, but they do support new disruptive applications such as the delivery of services, AI, Augmented Reality, System Learning - which are.
2) BIM could be used to create a live interface into the building - such as for monitoring and targeting – and should not just be regarded as a static catalogue of assets.
3) Flexibility of demand has value now - baseloads will be penalised. The ability to stress test design solutions and operational practices in a virtual environment will become increasingly valuable.
AND NOT RELATED TO BIM!
4) The development of harmonic metering was seen as a possible alternative to conventional sub-metering (although questions were raised about compliance with Measuring Instruments Directive (MID)).
5) Going forward, AI will hopefully solve the problem of excess data by taking a pool of data and creating intelligent questions and answers.
6) 3D printing could bring a variety of design solutions to the construction industry.
Is your company thinking about committing to SBTs? Do you want to know how to get there? This roundtable session is designed to share the experiences, challenges and lessons learned from leading companies who have already adopted SBTs to help you on your journey. Committing to a Science Based Target is a strategic decision which often requires board level sign off - but how do you get their support? You will leave this session understanding more about how to engage business leaders through clarity on the risks and rewards of committing to SBTs.
· Difficult to communicate the concept and value of SBTs to the Board
· It can be a challenge to get senior-level buy-in to the concept
· Lack of clarity over the target-setting methodologies
· Does senior leadership need to take a ‘leap of faith’ when committing to an SBT?
· Is it necessary to have a detailed business plan for actions to achieve targets, right through to 2050?
· Uncertainty over best approach to monitor the progress against targets
· Risk of setting unachievable targets
· Could SBTs divert attention from other important areas in sustainability, such as water and waste management
· The methodologies do not appear to focus on environmental impact other than carbon emissions, such as use of water
· Whilst SBTs can be a valuable driver of sustainability in value chains, firms that set targets should be careful not to overload suppliers with requirements
· Ensuring that the business case is specific to each firm is critical in developing a proposition that will resonate with decision makers
· Aligning the SBT with core brand messaging can help leadership understand the benefits
· Finding and developing a coach on the Board can help you ensure you make the right pitch for your targets
· Benchmarking targets and sustainability activities against peers can help build pressure to take action
· Identifying interest in sustainability performance amongst investor base can win support at leadership level
· Collaborating with other firms, through industry bodies for example, can reduce the burden on individual firms of developing best practice around target-setting
· Stretching SBTs have helped some firms to finding efficiencies by reviewing their supply chains
· Firms have strengthened the business case for setting SBTs by using the increased awareness of climate risk that they have gained through other activities, such as running an ISO 140001 management system
POINTS OF INTEREST
· An investor asked the CFO of one firm what they were doing around SBTs
· The CEO of another firm sits on the board of an industry body that is focused on climate action
· Consider alternatives if SBTs don’t seem to be the right fit for your business – e.g. alignment with SDGs may address more relevant themes
Businesses looking to achieve long term sustainable growth and return for their shareholders recognise the benefit of turning their long-term energy usage to their advantage. Energy is often considered a finite operating cost, but is there an opportunity to change this perception in your business by demonstrating the value of energy to senior business leaders? If so, how do you as an Energy Manager get the ear of the Board and get energy management on the agenda?
TABLE 3 | 14:45
1. Often challenging to get the business case sign off
2. The make-up of the business can be de-centralised, making a connected strategy challenging
3. Some assets are too old, making it difficult to implement certain initiatives and technology types
4. Including scope 3 elements within this, as it can be difficult to understand the drivers
5. De-centralised data management
RED FLAGS (WARNINGS)
1. Instances of struggling to deliver projects on time
2. Energy prices set to come down
3. Exposure to carbon risk/ regulation
4. Customer pressure on businesses
5. Resistance to change by employees within the business
6. Mixed portfolio of assets, some old, others new. Will need to address them differently.
7. Unclear how much should be invested
8. How to best benchmark
1. Good data management – ‘ One Version of the truth’ on a single platform across multiple feeds
2. Commitments including: EP100 and RE100
3. Highlighting the costs benefits
4. In other cases focusing on the CSR benefits
5. Considering the importance of resilience, particularly regarding energy demand
6. Collaborating more with people within the business
7. Centralised energy management approach
8. Align the strategy to overall company targets
Link into the benefits for wellbeing and maintenance/ operations
1. Targets: Instances discussed where certain elements of the strategy were designed to feed into other business units bonus schemes/ or targets. So there are more personal wins.
2. Business Case: One company had focused on the non-commodity costs (56%) rather than energy costs.
3. EP100: Linking energy into financial metrics that are important to the business.
TABLE 3 | 17:00
1. Changing habits/ behaviours of employees can be challenging
2. Understanding the right balance between automation and behaviour change
3. Company focus on other areas of the business, meaning any sustainability strategy is de-prioritised
4. Lack of data coverage, or inaccurate data
RED FLAGS (WARNINGS)
1. Number of technology changes that could destabilise the effectiveness of the strategy
2. Employees feeling de-empowered due to automation & inability to have any influence over energy
3. Unable to obtain investment from the c-suite
4. Lack of collaboration between people within the business
5. Health and safety taking priority to energy management
1. Important to connect all the key drivers, as detailed in the examples section.
2. Improved centralised data management with greater granularity
3. Consider resilience, such as against insurance risk
4. Link the strategy into the ethical benefits or strategy to sell more
5. Link energy, to maintenance and health and wellbeing – to highlight the value
6. EP100: The bigger picture
Solutions in the instance of the blackout scenario:
1. Temporary generators
2. Battery technology, if the business case improves
1. Key drivers included: Cost, carbon targets, risk avoidance, increase price of insurance, impact on improved health & insurance risk
2. Sustainability a sales and marketing piece for M&S
3. EP100: Linking energy into financial metrics that are important to the business.
Growing renewable generation levels are creating incentives for businesses to become active market participants. By using demand flexibility, from industrial assets, battery storage and self-generation to align patterns of consumption with renewable supply, businesses can radically reduce their energy bill, and become enablers of a more sustainable future. But how do you determine how, when and in what order to use this flexibility? Where does the value lie? And how could future system changes impact your approach?
1. It’s a new and rapidly developing area with many drivers therefore perceived as unreliable.
2. Lack of clarity over how we develop value out of flexibility.
3. There are already involved funding models that are risk resistant. Engaging with demand flexibility looks extremely risky to decision makers wary of the complexity.
4. Dependability trumps flexibility as a business objective in the minds of decision makers.
5. The market is full of disinformation and this impacts on trust.
6. Cost of retrofitting equipment.
7. Perceived risk of letting external people have access to energy systems.
1. Lack of understanding of key decision makers at board level.
2. Buyers simply cannot see the value of flexibility.
3. Decision makers mostly not culturally lined up with the digital world on a social basis never mind a business basis.
1. Build on trust model that sees trust moving away from vertical institutions to horizontal distribution enabled by networks. Consumer led e.g. Air BnB, find a baby sitter online – trust is fundamental to their business model.
2. Notice the community energy movement emerging – communities engaging in where energy comes from and moving from thinking only about the price of energy rather than the cost of energy.
3. Fully automated machine learning.
4. Play up resilience boosted by flexible response.
5. Make clear the cost of doing nothing.
6. Make clear the cost of existing backups – diesel generators for example.
1. Community energy examples.
2. National Grid the value of demand flexibility
3. Various projects testing and showing value.
According to the IEA, energy productivity improvements will deliver around half of the greenhouse gas reductions that we need by 2030. By improving energy productivity, companies can reduce their energy demand and significantly contribute to reducing energy demand globally, helping to limit warming to 2 degrees. With an objective of doubling the economic output from every unit of energy consumed, companies can set bold targets, demonstrating climate leadership while reaping benefits which include; energy cost savings, greater financial resilience, and job creation. Why is energy productivity a crucial part of corporate energy management strategy? Where are the quick wins in productivity, and how do you identify them? Why is it a good idea to focus on economic output per unit of energy, rather than on consumption only?
Energy productivity is the inverse of energy intensity, measuring economic output per unit of energy input. In contrast to energy intensity, energy productivity is a more positive story, focusing on improvements rather than reductions. Essentially, it’s about doing more with less, and demonstrating the business case for decoupling business growth from energy consumption.
Given that use of renewable energy has become arguably commonplace, it’s imperative that stakeholders turn their attention to their energy demand in order to truly contribute to GHG emissions.
EP can be considered in terms of scope 1 + 2, but this can be taken further to engage tenants/clients/partners in value chain to target scope 3 emissions, although this is considerably more complex to measure and implement, but is achievable.
Improving EP delivers a range of benefits including:
- Enhanced health and wellbeing of employees, therefore greater productivity
- Cost savings on energy
- Greater energy security and financial resilience
Energy productivity is an index that represents a measure of economic performance (e.g. floor area, revenue, profit, number of units produced etc.), per unit of energy consumed (GJ, kWh etc.).
Previously the link between energy and financial performance has seemed quite disjointed, so linking the two to tell a positive story could help to resolve this.
EP improvement is fundamentally achieved though making energy efficiency upgrades. Whilst the upfront cost of investment can be a barrier, there are some ‘low-hanging fruit’ options which can help to dramatically improve efficiency, these include: LED lighting, energy management systems, HVAC set points, and behavioural changes in the workplace.
It’s worth noting that return on investments are happening much sooner, with the returns being much greater than the original investment.
Action on energy efficiency to improve productivity is very much an internal process that requires leg work. Therefore, to help drive this action, senior buy-in goes a long way, as does employee engagement. Making public-facing commitments such as RE100, EP100 and setting science-based targets helps stakeholders to stay accountable, and there are reports of how such commitments have accelerated internal traction on efficiency.
Reporting and target-setting:
Is it better to focus on energy reporting rather than carbon? This could help to standardize reporting across complex operations, and provides clarity on the impact of specific actions. Ultimately, by reducing energy consumption, carbon emissions will also fall. Decarbonization is only one piece of the puzzle, and efficiency improvements made through the lens of energy productivity can help to reduce energy wastage, ensuring that the energy that is used, generates the maximum output possible.
In terms of target-setting, a very interesting anecdote was shared that, it’s better to set a longer-term, highly ambitious target and miss it by 5%, than set a short-term target that is much less ambitious and meet it early. By raising the level of ambition, we can accelerate action to make a lasting impact.
The importance of legislation was raised, for example the Energy Savings Opportunity Scheme (ESOS). There is currently a consultation underway on Streamlined Energy & Carbon Reporting which aims to raise awareness, reduce bills, and save carbon.
With demand-side response being seen as a cost-effective solution for grid capacity and flexibility, a number of companies are developing solutions and realising the benefits. We’ll pool the experience around the table, and ask what it will take for demand-side response to become a normal business activity.
TABLE 6 | 14:45
Organisations are under staffed internally on individuals who understand demand side response – most are more focussed on compliance.
There is not a clear understanding on the technology or the process.
DSR sounds too good to be true when putting forward the business case to senior leaders or externally to a client which makes achieving buy-in very difficult as there is a good deal of scepticism around the whole proposal.
Risk aversion is a key obstacle from many decision makers. It is seen as a risk to sign up to - there are a few negative anecdotes out there which influence the decisions.
Some projects are not signed off as they have a payback longer than 2 years and it is not possible in some cases to get a project signed off with a payback this long.
It was felt that this was a ‘no-brainer’ idea and yet it is still difficult to sell the idea to others.
Also, this has been sold in the wrong way previously which has left a lot of trepidation and scepticism in the market. Contracts have been offered for free and have not been properly scoped or explained to clients.
Regular changes to the energy market mean that people are pre-dominantly focussed on ensuring that they adhere to the rules rather than exploring ways to make the most from their energy.
There is a lack of guarantee and understanding in the market especially when using an aggregator> No clarity around the submission process or who is doing it or what is being covered under the costs and fees.
Organisations need a multi-disciplinary view on demand side response. Bringing expertise in from around the business who understand the various elements will help to build a better business case.
Overcoming risk aversion through battery supply. Including battery storage significantly reduces the risk of the project – it will reduce the revenue also.
Use an aggregator. Entering the market independently opens up the potential for penalties if sufficient generation isn’t supplied. Going through an aggregator removes the risk of the penalty. You will be dropped by the aggregator if you consistently don’t provide the required generation but you will not incur a financial penalty.
Utilise private wire. There was one example round the table of this having been done successfully.
One company had needed a partner with a number of years’ experience and a track record but had found it difficult to find this as the industry is quite new.
One company had leased some of their land to a third party company that then supplied them with battery storage. This had de-risked the process and also been a zero year payback as the cost was carried by the third party.
One company considered its backup generators but they are all diesel and so the emissions and associated costs meant it was prohibitive.
One company were unable to get an export agreement due to the level of capacity in the area which meant the project couldn’t go ahead.
TABLE 6 | 17:00
Aggregator data security is very important and to many is not at a high enough level.
Policy is an obstacle and needs to change. If Government continue to push renewables then the power market could ultimately disappear without clarity on how it will be structured in the future.
There is a need to differentiate on the funding side
Power stations currently trip offline and create a ripple effect through the power market. In a more decentralised grid, the impact from a single failure would be less.
There is a limited requirement for frequency response and the price is also coming down, so there is a need for innovative funding to layer revenues from multiple projects.
Asset data has significant gaps in it which impedes the ability to put a business case together for DSR. There is also a lack of workforce who can do anything meaningful with the data.
DSR is complicated and has the potential to ‘fall off a cliff’
Battery storage is a clear solution and has a huge number of investors in it at the moment, however caution needs to be applied as some felt there might be a bubble in that market.
Rise in community energy projects. Storing energy at home is a growth area
Business continuity prepares for major energy blackouts by moving loads around globally and providing alternative physical locations for staff with back up generation.
Unintended consequences – a generator being used for DR, overheated the room it was in and set off the fire alarm evacuating all the staff. A holistic understanding is required to avoid these things happening.
Businesses are already taking bold and ambitious action to help create the transformative change we need to drive the clean energy revolution. One of the ways they are doing this is by switching to renewable power. This roundtable will explore the benefits, challenges and risks of transitioning to 100% renewables. What are the strategic business drivers of renewable energy transition? How do you build a roadmap for achieving 100% renewable? How can renewables improve the business energy trilemma – security, sustainability and affordability?
TABLE 7 | 14:45
Companies with operations in various geographies, including Africa and Asia, raise the point that this brings difficulties in achieving a renewable portfolio.
The removal of Feed in Tariffs (FiTs) in the UK weakened investment prospects.
Non-ownership of buildings (landlords) means some countries don’t have direct control over modifying their assets to become more renewable/sustainable – this can work both ways, with tenants being an obstacle too. It’s about showing demand.
Energy storage prices remains a barrier and prices still need to come down for it to be a feasible option.
Some companies are looking in the long-term to modify the entire company structure, with various scenarios possible.
Demonstrating to board change that needs to happen – show monetary value of savings/cost.
Some easy wins – green tariffs.
Package renewables with energy efficiency measures to make more attractive as investment.
Battery storage back up can improve business case, resulting from loss of FiTs.
Talking to other companies. Sharing stats. Cooperation!
Develop renewables targets on top of sustainability targets.
A platform to bring landlords and tenants together?
Upstream actions include investing in renewables. Downstream actions such as installing electric vehicle charge points at petrol stations.
Some organizations are purchasing renewables through an energy consortium.
Change is happening but not fast enough.
As well as having drive/passion to make change – there are financial opportunities.
A key part is communication – know your audience (who pitching to).
TABLE 7 | 17:00
Ownership of buildings poses a challenge.
The long payback period in renewable energy investment is seen as a barrier.
Self-generation projects often produce modest amounts of electricity.
Legal framework – expensive and complex.
There is an overwhelming amount of technical information available, which can be a barrier.
Green tariffs effectively contribute to cost savings.
There are a range of technologies to choose from and companies can use a combination.
Working with longer time horizons improves the business case.
Landlords see renewables/sustainability as a buying point.
Visual impact for self-generation projects is a seller.
Having a network is important for information sharing and feeling supported.
Having a few leaders to lead the way is important. Demonstrate cases to others.
Supportive policy is essential and a clear direction.
Better relationship with DNOs to achieve grid connections.
Purchasing renewable electricity in the UK is generally fairly simple.
During some company shareholder AGMs, renewables are raised as a topic of conversation – useful as a driver for change.
There is a strong case for renewables in achieving CSR.
Supply security is paramount to organizations/companies and renewables can help strengthen this.
Supply chain leverage would be massively beneficial.
Can science-based targets help companies gain improved visibility and control of their energy needs, use and management? With more than 300 companies now signed up for SBTs, is this the new standard for target-setting? Should all companies now align their targets with climate science? How do we encourage more companies to come on board? What is stopping those that have yet to sign up?
TABLE 8 | GENERAL
Science Based Targets - de-carbonisation through aligning greenhouse gas emission levels of companies with climate science based targets, which aim to keep the global temperature increase below 2 degrees. Currently 312 companies are taking action with SBTs. There are a variety of methods that organisations can use, including - Sectorial De-carbonisation Approach, Absolute Based Approach and Economic-based approach. The targets are split up into 3 different scopes - Scope 1, emissions from sources that are owned or controlled by the reporting company. Scope 2, emissions from the generation of electricity, heat, or steam that has been purchased by the reporting company. And Scope 3, all other indirect emissions from sources that are located along the reporting company’s value chain (Scope 3 target’s do not need to be science-based).
Companies are either not yet committed to SBTs but are interested or at least curious about learning how they might use SBTs to make their organisations more efficient and productive (or if SBTs are effective or attainable), or they are companies that are using SBTs and are trying to figure out how they are relevant and practical for their organisation, how they can improve and which is the best suited methodology for them.
TABLE 8 | 14:45
How can we measure science-based targets? What are the externalities around decarbonising the grid? Are science-based targets necessary? Are they too complicated? Can we not just aim for net zero target emissions? Are simpler model targets more efficient? Why would you not set Science Based Targets? What happens when you have a high-energy intensive process that creates a product that over its life saves 70 times more energy? Why can’t we make manufacturing zero carbon? Which parts of the supply chains do we de-carbonise/ is it worth it financially for very small suppliers?
- Shared Responsibility/Culture/Earning a right to make a profit
- Energy Efficiency and Productivity
- Methodologies take into account the strengths and weakness of different sectors in order to tackle global carbon budget by 2050, for example sectorial decarbonisation approach
- Organisation’s reputation/purpose. Unethical to not have target at least as good as SBT
- Younger Generation/Market - are looking for and expect more from companies
- Attainable? Achievable? Measurable?
- Complex and complicated Supply Chains
- Importance of storytelling, communication and unison
- Green energy affordability and accessibility in different regions
- Climate Science is complex and can at times seem to be misleading
- For some sectors SBTs are too simple and for others too complicated
- SBTs need to take into account what companies manufacture and whether or not it’s also an energy saving product
- Needs to diversify to include and account for other kinds of businesses like the chemical industry
- Issues of return on capital
- Difficulty in submitting SBTs
- Needs to factor in other variables, such as timeframes of leasehold property
- Approaching the issue of measurements – there’s so many metrics and measurements, which on their own don’t hold much weight or value until they are held in conjunction with other metrics, for example – Carbon Productivity and SBTs measuring a turn on investment.
- Organisations need to choose a model, if you’re not going to use SBT, what are you going to use?
- Language is important. Why don’t we call other non-SBTs - Political Based Targets, Opinion Based Targets, Financial Based Targets, Risk Based Targets?
- There needs to be a global effort
- SBTs are a behavioural initiative behind a technological approach
- Don’t let scope 3 discourage you from doing scope 1 and 2!
- Importance of simplicity
- Importance of integration and application
- Storytelling and Communication
- Governing Boards (as well as public) need to understand climate change, GHGs and the benefit of lowering carbon emissions/value of decarbonisation
TABLE 8 | 17:00
What methodologies are most relevant? How are science-based targets different to arbitrarily saying I’m going to achieve a 50% reduction by a certain date? Does it enable smarter energy productivity? Is it achievable? How are other people using SBTs? How can tech and data help? What are the drivers for SBTs? How do they drive change? How do we communicate SBTs down to supply chains? How does it deliver benefits to the clients? Where is best to invest - efficiency? Renewables? How do SBTs take into account the expense of moving to other forms of greener energy like renewables? How do you deal with the pressure and expectation of SBTs? How do you build a business case for it? Can we not use both an Up-down approach (like SBTs) at the same time as using bottom-up like older methods?
- Flexibility between 5-15 yr plan (in accordance to orgs agenda) or 2050 pathway
- Planning and Innovation of organisation towards the 2 degree pathway also enables planning for potential risks - risk management
- Method is more scientific and structural
- Merits of Sectorial decarbonisation approach - breaks down the global carbon budget into 13 different sectors, recognising that some sectors are going to be able to de-carbonise better than others (e.g. the building sector, which uses a lot of electricity)
- Using the model by IEA on how the economy is going to evolve between now and 2050 in order to create carbon budgets and develop intensity targets for these sectors
- Strength and progress of SBTs lies in everyone participating
- Reputational Benefit of SBTs – pressure on orgs, which encourages other organisations that don’t yet have sustainability targets to think or plan for the future
- Domino effect – it brings in pressure and expectation from investors
- SBTs provide a framework and structure amidst many variables. Whereas an arbitrary 20% reduction, doesn’t take into account for example how energy intensive your business already is.
- Without framework, easy for companies to green-wash how much they’ve done to reduce, and process is too short-lived
- Though there is a lot of choice in methodology - the choice is there to stop people feeling restricted
What are the Pros and Cons between the different SBT methodologies?
If there are two methodologies then organisations might choose the easiest one, rather than the right one. Also different methodologies might come up with different results. Is it science if there’s so many methodologies or assumptions?
- Not just about setting the target but the method of action in getting to that target
- SBT have a place - Structure and how we communicate SBT makes a huge difference (we need to explain this to people who are involved on the ground)
- Scenario: What if we do nothing? There’s a price on assets and what happens to them - e.g. flooding, - and therefore what are we going to be paying in carbon damages? What would our range of savings be between these scenarios?
- It’ll cost more to do nothing
are harder with a global portfolio, a lot of variables and unknowns
- Timing is vital and precious. If there isn’t a unified effort now then targets will get harder. The earlier we act, the better. And the sooner we do, the sooner we can assess future risks
- SBTs are a catalyst for change. Change in conversation and a change and improvement in how we buy, manage and use energy. Saving on running and maintenance costs, and by creating more efficient, cost effective and sustainable organisations
How can decentralised, local energy generation tackle the big corporate energy trilemma – security, sustainability and affordability? How can you future-proof your company’s energy technology? How do you integrate disparate energy generation, storage and management technologies into a seamless, efficient and effective single system? How can companies develop a decentralisation strategy that makes sound commercial sense, reduces costs, builds resilience and generates its own revenue?
TABLE 9 | 14:45
The discussion was kicked off by identifying four key issues related to energy decentralisation: cost, legislation, brand and security. The economics and revenue opportunities of investing in decentralised generation were underlined as critical factors in companies’ decision-making process. More specifically, turning to decentralised generation solutions requires the involvement of third parties offering advisory services such as legal and planning that increase transaction costs. Since contracts regarding decentralised assets are highly region-specific, a significant amount of resources should also be required to tailor contracts for site-specific specific projects, which further increases the complexity of the process. On the regulatory side, while smaller players are willing to enter the decentralised market but may lack capital, bigger players have financing capacity but are hindered by regulations. Stipulating agreements with DNOs can be particularly complex, especially when exporting energy back to the grid is becoming harder.
RED FLAGS (WARNINGS)
Particular focus should be turned towards regulated charges. For instance, what value can be extracted from decentralised commodities and are there any arbitrage opportunities? Decentralised assets could produce returns by offering balancing services to the grid, however, most decentralised assets will have limited capacity (as inferred by the definition of decentralisation itself) and may not be able to take advantage of these arbitrage opportunities. It is, therefore, critical to align the different agents within the system to ensure the creation of such opportunities. This can be achieved by creating the right incentives. Hence, government regulators hold an especially important role and should closely consider the knock-on effects of legislations. For example, if regulations are not designed to promote a higher degree of grid flexibility, then investments in demand-response and battery storage won’t be incentivised.
A critical issue that requires solving in the short-term is fixing the flaws of the system and ensuring the effectiveness of relationships between DNOs and decentralised generators, particularly guaranteeing the possibility of exporting excess generation back to the grid. There is a strong need for macro policies that can drive solutions from top-down to complement the current bottom-up driven decisions. Since cost and financing emerged among the most cited obstacles for investments in decentralised generation, crowd funding was mentioned as a viable and effective solution. Blockchain was also identified as a technology with the potential to enhance the connection between the grid and distributed generation and among decentralised assets themselves was also underlined, simultaneously increasing flexibility of the system and lowering costs.
Decentralisation first emerged as way to hedge from the big generators and network players and enhance energy security. However, with the increasing pressure placed on the grid by rising shares of renewables within the energy mix and the diffusion of electric vehicles, decentralisation will become an opportunity to support the balancing of the electricity network itself.
London was taken as an example of the challenges of a fast-growing city. With rising electricity demand forecasted in the following years and the mayor’s target of making London a zero-carbon city by 2050, dealing with the energy system challenges is a priority. Not only must the grid become smart, but there must also be a behavioural shift towards a sharing economy for energy. At the same time, costs and expenses have to be contained, and possibly decreased.
TABLE 9 | 17:00
The following summarised background and questions were provided as a premise to this roundtable: a cyber-attack has successfully compromised energy grid.
1. Are you prepared to face it?
2. what would you have done differently if you knew it would have happened?
3. How would you respond?
The majority of delegates stated their companies have procedures in place to enable a response if such events were to occur. However higher investments in resilience and energy security measures, such as battery storage were underlined as an aspect that needs more attention. CHPs, back-up generation/ diesel generation and business continuity plans were cited as part of potential response strategies.
The National UK grid is at tipping point, with significant investments needed to meet growing demand and new regulations to overcome flexibility issues. Increasing shares of renewables within the energy mix to achieve the UK’s renewable energy targets create changes in load profiles and put pressure on the grid.
Balancing grid capacities will become more and more important within the energy system, leading to new opportunities for decentralised power generation. There is a high perceived potential for decentralised generation from both an economic and a security of supply perspective. With revenues from exporting excess capacity back to the grid projected to decrease, the role of battery storage, demand-response and similar balancing tools will acquire a more central role.
RED FLAGS (WARNINGS)
Along with new technologies emerging in the energy sector, the number of services available is also growing exponentially. This can cause difficulties in communicating benefits to clients, which may feel overwhelmed by the vast availability of services offered.
An additional risk concerns the fact that many companies don’t own the decentralised assets and hence do not take advantage of the benefits derived from exporting capacity and balancing services. This may become a disincentive to invest in decentralised generation due to low potential revenue streams.
EVs are also a subject needing particular attention. With already increased peaks from renewables, EV charging hubs could add to the pressure placed on the grid and cause additional inefficiencies. However, if demand-response is effectively exploited and supported by appropriate regulations, EV charging can become an additional resource for grid balancing.
Planning for disruptive changes was identified as essential for achieving successful results and being able to fully exploit the benefits of decentralised generation, especially once EV diffusion really takes off. As of today, the energy system changes will be technology driven, with grid operator’s response will probably be slower to materialise.
It was suggested that the energy system transition won’t be led by one single player putting it all together, but rather the market will be more fragmented. Home energy charging is seen to have high potential of taking off in the near future.
From saving money and reducing your carbon footprint, to wider sustainability and competitive edge, energy optimisation is now key to business success. In this roundtable we’ll address some of the key goals and challenges you may encounter along the way. How can you manage energy in a more strategic way to actually improve business performance? Which existing tools are working, and which new technologies can help you with your goals? How can you put energy at the heart of your business value chain? What are the best tactics for pitching to, and getting investment from, the C Suite?
1. No CAPEX
2. No proof of concept internally
3. The performance gap between in-build and in-use
4. Insufficient metering
5. Insufficient data
6. Too much data
RED FLAGS (WARNINGS)
1. Over promising and under delivering on past projects – creating apathy with senior leadership – the solution is to get it right first time
2. Business cannot be inhibited – operations have to continue unaffected
3. Technology deteriorating in effectiveness over time
1. Standards such as BREEAM in the build phase
2. Setting Science Based emissions reduction targets and working towards achieving them
4. LED role out
5. High level benchmarking
6. Optimising how kit is used at different times of the day
7. Increased engagement with staff
8. Reinvest energy savings in further efficiency measures
9. Improve BMS strategy and visualise data
10. Understanding what initiatives are progressing and which have stalled, understanding the reasons
1. Proving a concept at one site and rolling out across portfolios achieving economies of scale in value chain
2. Aligning subcontractors to end goal of main contractor / asset owner
3. Bringing the virtual world of building modelling into use in the real world
4. Taking the running of the building out of the occupiers hands and instead using technology
5. Improve use of data and engagement internally to drive action
The transport sector is the fastest-growing contributor to climate change, accounting for 23% of global energy-related greenhouse gas (GHG) emissions. Electric transport offers a major solution in cutting millions of tons of greenhouse gas emissions per year, as well as curbing transport related air and noise pollution. With businesses owning over half of all registered vehicles on the road, it is crucial that companies lead the shift to electric vehicles. Many are already starting to engage, looking to get ahead of market developments and expected legislative measures, reduce fuel and maintenance cost and position themselves as low-carbon leaders with their staff and customers. This roundtable will consider the key business drivers, benefits, risks and challenges of EV transformation in the corporate context.
TABLE 11 | 14:45
o There is no clear strategy on how to adopt the EV technology and not enough government support;
o It will be crucial to understand if there is enough power to support the growth of the EV market, and how to provide businesses with the adequate capacity;
o For the time being, it is possible to have a limited amount of charging stations at virtually any site. However, if this number is upgraded, network issues may arise;
o If the government adds obligations for businesses to install charging points, there needs to be a thoroughly planned upgrade to the network;
o However, if this network upgrade cost falls upon the taxpayers, it may create discontent. Many citizens – especially from poorer areas of the country – would still find EVs too expensive;
o Businesses which need the electricity capacity of their premises to be upgraded (in order to accommodate all mandatory EV charging infrastructure), may become subject to fines if this upgraded capacity is not fully used;
o There are also concerns about lithium being a finite resource, i.e. whether global resources are capable of meeting the world’s demand for EV batteries, and/or how lithium can be sustainably recycled;
o To clarify any misconceptions, the kind of power an EV needs is not unusual in the domestic setting – and even if a car has, for example, a 30 kWh battery, it is unlikely for the owner to need this amount of energy to charge it.
o A solar farm led by local authorities could be a viable solution to provide additional capacity if needed.
o “Smart-chargers” can provide the solution to any “billing issues” businesses may face and help reduce the electricity demand peaks.
o The market of EV battery recycling is currently in the early phases of development, and is expected to reach a mature stage by the mid-2020s, when the majority of EVs currently on the streets will have to replace their batteries (the average lifetime of an EV battery is 8-10 years, after which batteries can still be used for energy storage, for example in households).
o The role of local authorities is very important. TfL is a good example of how to develop a network of fast-charging stations allowing third parties (i.e. ChargePoint) to install the infrastructure and sell the electricity, reducing the burden on the public budget.
o Vehicle-to-grid (V2G) technology can help provide the additional energy needed by the grid at peak times. Nissan is already trialling this in the UK in partnership with a utility. As battery capacities increase and prices go down, such solutions become increasingly viable. This technology would also offer monetary compensation to EV owners for the electricity provided.
TABLE 11 | 17:00
o Investment companies’ clients are increasingly asking how to add a sustainability side to their assets, and this includes investments in electric transport solutions;
o For a certain kind of corporations, there are two drivers when it comes to EVs: the future legislation, making chargers compulsory in new buildings and petrol stations; as well as the installation of charging infrastructure for customers;
o Given the rising concern about air pollution, decarbonising local car fleets would be a great benefit – however, for the time being there appears to be a shortage of skills to develop this new market;
o EV sales currently represent 2% of total car sales in the UK – how do we get to 100% by 2040, as the Government target states?
o In order to reach this target, what role do plug-in hybrids play? Would these vehicles end up clogging the market with a technology which is not the best of either EVs or ICEs?
o Once price parity is hit and the number of EVs grows exponentially, there will be a potential issue in the national grid;
o Companies find reimbursing expenses for staff owning EVs is not easy, since domestic charging cannot be billed in the same way as a petrol or diesel refill;
o If companies start using EVs, electricity coming from renewable sources needs to be available for purchase in large quantities;
o Would battery swapping be a viable solution for EV drivers in this country?
o Government policies play a huge role in removing ICEs from the streets, but so far the government’s attitude has not been very helpful with regards to businesses. Future policies are still very unclear.
o In terms of reimbursements, companies could offer employees a monthly electricity subsidy for EV owners, similarly to what already happens for mobile phone contracts;
o Although electric cars do not provide exact data on electricity consumption, making expense tracking a difficult task, smart-chargers are now available. This technology provides insightful data on charging. It can also potentially make the vehicles part of the electricity network (Vehicle-to-grid technology).
o Battery swapping may be a potential solution - particularly in countries such as China or India, less so in Europe and North America given market structures.
o Aware of range anxiety being an obstacle in the EV uptake, Nissan has come up with a temporary solution: offering EV owners a combustion engine vehicle for up to two weeks a year, when drivers wish to take long-distance journeys;
o In order to facilitate the growth of the EV market, car-sharing programs, such as ZipCar, represent a great opportunity;
o A European OEM has already tried leasing batteries to EV owners. This experiment, however, was not very effective;
As companies increasingly turn to IoT, big data & digital tech platforms for energy optimisation, they are becoming awash with more sustainability-related data than ever before. This roundtable will consider how companies can best use sustainability data to: 1) improve energy performance 2) manage carbon emissions 3) identify savings and efficiency improvements 4) improve business continuity planning and risk management 5) enable positive business change.
Can there be “too much” sustainability data?
• General consensus that data does not necessarily = information
• What needs to happen: Data Meaningful Information Action
• Different stakeholders can use data in different ways but they need to consider the use purpose and type of analysis they will undertake before collecting – or in some cases have brought in consultancy support to make sense of the data when they have collected more than they can understand
• There is a danger that non-sustainability focused stakeholders in many organisations are becoming information-blind – data needs to be translated in a meaningful manner (see examples below)
• Questions were also asked about there being potentially too many external reporting metrics/systems – is this a problem? General feeling that encouragement to collect more data is not a bad thing, but some organisations should focus more on what the internal sustainability drivers are as opposed to just focusing on external reporting metrics and benchmarks – compliance can be seen as a Trojan Horse which will drive sustainable business change further
Can data replace sustainability champions?
• Most organisations need board-level champions to push the sustainability agenda, but where these top-level champions don’t exist sustainability data can take their place/help to encourage these high-level sponsors – but it will need to be related closely to cost to provide a compelling case for change
What data should we be collecting?
• General consensus that we should be collecting in a number of key areas:
o Energy supply data – GHG emissions
o Energy consumption data – relating to usage and efficiencies
o Investment data – understanding of what future investments/expansion by organisations will mean in terms of energy usage and sustainability
• Sustainability data being made publicly available is a great driving force – increasing competition between organisations as competitors strive to be seen as the champions leading their particular industry – this can only be a good factor – more sharing is necessary to drive more competition in this manner
• Importance of collaboration within sectors – hotel industry has worked together to start reporting on the carbon and water by room which is a great step forward in creating benchmarks
• Sustainability data should be translated into business costs – manufacturers have been driving behavioural change by translating background energy usage for individual sites into data about how much extra core product needs to be produced to cover the cost of this waste, which becomes a driver for site leaders compared to data solely on energy wastage itself
• Other organisations don’t just try to track and translate all of their energy usage data all of the time – instead focus on predicting the energy savings that particular projects will have, then track this data and report specifically on these results, which helps to create a more compelling business case for further projects or expansion of existing projects
Grocers use data on failures to properly close refrigeration overnight (when the stores are empty) to cause alarms to sound during the day (as opposed to overnight when stores are empty) – store managers questioning why these alarms sound during operating hours but learn to double check for energy-efficient closedowns – focus needs to be on when and how we provide types of data to suitable stakeholders
Technological advances in energy generation, management, distribution and storage are proceeding at exponential rates, making planning for future energy needs, reliability, use and management increasingly difficult. This roundtable will discuss the growing challenges, risks and opportunities for business in an age of exponential and disruptive change. How can business future-proof its energy management when the future is so unpredictable? How can you get on the right side of disruption?
This table chose to dive into specific issues and explore energy-related challenges that can be uncovered by looking at particular cases. The group focused on three issues: a) transitioning to serving as a platform by monetising data of an analytics company, b) increasing energy efficiency of a leisure and holiday company’s operations, c) discussing an appropriate approach for a doomsday scenario following a failure of the grid. Regarding data monetisation, the group pointed out examples of large successful companies who turn consumer data points into monetisable business, such as Facebook or Google. Solutions such as creating metadata, drawing on historical data, setting benchmarks and getting partners who would enhance the chance of success were offered. The challenge is to convince partners to join given privacy or competitive concerns, but alliances and partnerships could alleviate such resistance. With respect to improved energy efficiency, a company seeking to find partners and ways to improve energy efficiency should set a clear vision of why these actions would be taken – due to employee engagement, improved bottom line, consumer demands or other. It is worthwhile to identify how the plan fits within the company’s broader strategy and what the low-hanging fruits are. Finally, in terms of a nation-wide blackout, members of the group pointed out national differences that drive the variance of responses across the globe. Interestingly, firms in remote areas are likely to prepare for such doomsday scenarios better as they may be more aware of the need of being self-sufficient in case of a disaster. Also, creative solutions such Starpath in Cambridge may help bridge the needed energy demands given a failure of the grid. However, companies and societies at large should be cautious not to over-engineer and instead focus on the easiest and most widely applicable solutions. More generally, accidents and natural disasters may indeed lead to grassroots projects such as the peer-to-peer Brooklyn microgrid. While regulation presents a challenge to some projects including private microgrids, innovative companies such as Moixa are proving that workarounds are possible. The group agreed that critical services such as hospitals and the food supply chain would have to be prioritised in case of a grid failure. Ultimately, while companies should assume their part of responsibility in ensuring a smooth response within their business, a broader re-education about an excessive reliance on electricity may also be required.