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7 August 2018 | By Gab Barbaro Community

Leaders must wake up to new energy technology

Recognising the potential of clean energy and signing off on investment are worlds apart. Firms risk falling behind, says Centrica’s Gab Barbaro

The cost of doing business is increasing. Organisations across the country are wrestling with a business rates rise, higher car tax for their vehicle fleets and rising operational costs thanks to inflation.

At the same time, the government has laid down the gauntlet for the UK to be a world leader on clean energy. The Clean Growth Strategy is ramping up and businesses will find, if they aren’t already, that they are increasingly tasked with reducing emissions and lowering their environmental impact.

The combination of these two factors is a perfect storm for businesses under pressure to become more sustainable at a time when the economic and fiscal environment is hitting margins.

With that in mind, efficiency strategies will be top of the agenda for many leadership teams. Managing energy consumption is one factor that can have a huge impact here, but I believe it’s currently being overlooked by many.

In June, we surveyed more than 100 of the most energy-intensive organisations in the UK – both public and private and from a range of sectors including housing, construction, retail and manufacturing.

The poll, which we’ve run for the past two years, asked energy buyers at these organisations a range of questions aimed at identifying their primary energy challenges, concerns and priorities.

Just under half of respondents from both surveys said that political uncertainty – caused by issues such as Brexit, a new UK government, increasing regulation and red tape – was the biggest barrier to progress.

But a consistent theme over the past two years is that one of the most common barriers to adoption of new energy technology, such as battery storage and combined heat and power (CHP), is getting leadership teams to sign off on the investment.

More than a third of respondents to this year’s survey said that board-level buy-in was their biggest challenge, only a one per cent improvement on the previous year.

This is a barrier firms can overcome and one that must be addressed.

Staying in the game

My message to the business leaders I meet is very simple. Companies must overcome short-term issues and take a long-term view of their energy strategy. Britain’s energy infrastructure is transitioning from traditional forms of power generation to a system that integrates advanced technology and renewable energy sources. Those who don’t invest in this now risk falling behind in the future.

Our poll showed that energy buyers across the UK recognise this but need better support from their boards to implement change.

We work with more than 2,000 forward-thinking organisations across the globe where this buy-in has already been achieved – from supermarkets installing CHPs in their distribution centres to local councils using battery storage to get the most out of renewable energy.

Advanced energy technology is already helping these organisations reduce costs, lower carbon emissions and increase productivity through better performing systems and machinery.

The energy future is here today

In our survey, we also asked respondents to predict the biggest energy technology trends for the next decade. Onsite energy storage and Internet of Things devices topped the list – and this technology is already available.

Centrica’s Local Energy Market (LEM) trial, for example, oversaw the installation of six energy storage machines at The Olde House, a holiday destination in Cornwall. The 1MWh energy storage machines hold excess solar energy that can be distributed when needed onsite, allowing the farm to manage peaks and troughs in demand. The units will be connected to Centrica’s new LEM platform, the largest of its kind in the UK, to allow surplus energy to be sold back to the Cornwall grid. 

IoT devices in action

A good example of IoT technology in action is our work with a global building materials supplier which is saving hundreds of thousands of pounds a year simply by monitoring its energy usage at three sites and making more informed operational decisions.

Wireless smart sensors attached to pumps, conveyors and crushers, enabled them to spot a conveyor motor was regularly overloading and tripping out, creating a bottle neck. Fixing this saved more than £200,000 in one year at just one location – money the business can now channel into supporting growth.

Organisations like these that invest in new energy technology are those that will be the most sustainable, resilient and, indeed, competitive, in the future – especially as political direction of travel, business interest and environmental concerns become more closely aligned. More businesses need to follow suit. 

Leadership teams must recognise the opportunity presented by energy technology and enable their energy buyers to start the transition. If they don’t, it’s likely that their competitors will.

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