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Do you have a Net Zero strategy?

 960 640 Guest Post
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The UK has become the first major economy to pass laws requiring all greenhouse gas emissions to be net zero by 2050. The electricity grid is decarbonising (its carbon intensity has dropped by over 50% since 2011 to where it is today – 254 g CO2 per kWh) and is forecast to drop another 50% by 2030.  Grid costs are rising to pay for this transition.

A key lies in the word “NET” because whilst some businesses will struggle to reduce carbon, others could actually become POSITIVE – e.g. generating excess renewable power.  New business models and revenue streams could emerge though

So what does this mean for YOUR business ?  How do you develop a net zero strategy ? 

  1. Significant changes will be needed to the way you do business and use energy.  The changes could impact how your employees come to work, how you distribute your products, sell your products, procure your raw materials and use your facilities.  Processes may require to be redesigned and reengineered.  This will mean the ability to embrace change, challenge existing assumptions, innovate and understanding of alternative methods and costs

Businesses should be looking NOW at their own operations and looking for ways to BOTH reduce consumption AND generate their own low carbon power locally in a sustainable way.  Simply buying a green energy tariff is not sufficient. There are many very good long term business benefits by embracing this genuinely, which can become a source of competitive advantage.

For businesses that use a lot of gas, this is going to be particularly challenging. Gas is cheap (5-6 x cheaper than electricity), so changing away from gas will be expensive.

  • 2. Those changes will have financial costs that may not be affordable within conventional capex constraints.  New business models such as energy as a service are increasingly available to help bridge the gap, and enable changes to happen. 

NET ZERO WILL REQUIRE NOTHING SHORT OF AN INDUSTRIAL REVOLUTION, with new business models and technology, and all within the next 30 years.  

These are the reasons Onsite Energy Projects exists – we help businesses innovate, reengineer their energy supply chain and implement the full potential of both energy efficiency and on-site generation measures.  We recognised the challenge of capex availability and can provide a no-capex, off-balance sheet, solution to make it all happen.

If you would like to know more email us at info@on-site.energy or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required. 

Coal phase out forms key part of government’s Net Zero strategy

 960 640 Stuart O'Brien
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The deadline for the phase-out of coal from Britain’s energy system is planned to be brought forward a year to 1 October 2024, as outlined by the prime minister in a speech to launch COP26.

The government will consult on bringing the deadline for ending unabated coal forward from 2025 to 2024, part of its drive to go further and faster on decarbonising the power sector, as it works towards net zero by 2050.

New statistics show the UK’s greenhouse gas emissions fell by 2.1% between 2017 and 2018, thanks in large part to the rapid decline of coal-powered electricity generation. Last year more than half of the UK’s electricity came from low-carbon sources.

This means the UK has cut its emissions by 43% since 1990 while growing the economy by more than two thirds – which the government says is the best performance of any G7 nation.

Business and Energy Secretary Andrea Leadsom said: “The UK has a proud record in tackling climate change and making the most of the enormous economic potential of clean technologies. This is my number one priority, and we will raise our ambition in this year of climate action. Coal-generated energy will soon be a distant memory as we plan to decarbonise every sector of our economy, enabling a greener future for all our children.”

The government will also bring forward an end to the sale of new petrol and diesel cars and vans to 2035, or earlier if a faster transition is feasible, subject to consultation, as well as include hybrids for the first time.

Coal is the most carbon intensive fossil fuel and is responsible for harmful air pollution. Last year Great Britain went 3,700 hours without using coal for power, nearly 5 times more than the whole of 2017. There are currently 4 active coal generators, one of which has announced closure in March 2020.

Britain was one of the first countries in the world to commit to ending unabated coal generation. Existing policies are already cutting our reliance on coal from around 40% in 2012 to less than 3% in 2019. The contribution of renewables is now at record levels, standing at 33%.

New Net-Zero Assets Alliance signatories push initiative to $3.9 trillion

 960 640 Stuart O'Brien
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AXA, Aviva, CNP Assurances and Fonds de Réserve pour les Retraites (FRR) have joined the UN-convened Net-Zero Asset Owner Alliance, raising total assets under management targeting carbon neutrality by 2050 to more than $3.9 trillion.

The Alliance is a group of the world’s largest pension funds and insurers committing to fully decarbonise their portfolios to avoid a global temperature increase above 1.5°C. Launched in September at the Climate Action Summit, it was initiated by Allianz, Caisse des Dépôts (CDC), La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re, who were joined by Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand and Zurich as founding members.

Eric Usher, Head of the UNEP Finance Initiative (UNEP FI), said: “The addition of four significant asset owners signals growing commitment by investors to align their portfolios with the ambitious 1.5°C target that goes beyond even the level of ambition reflected in the Paris Agreement. Concerted investor action led by the Alliance signals to financial markets that making entire portfolios net zero carbon is now clearly on the agenda.”

Now 16-strong, the Alliance actively encourages additional investors to join by committing to a net-zero portfolio by 2050 in support of a global economy that delivers emissions reductions in line with scientifically determined targets.

This is see as critical in light of recent evidence from UN Environment Programme’s Emissions Gap Report, which found collective ambition must increase more than fivefold over current levels to deliver the cuts needed over the next decade to achieve the 1.5°C goal. The Intergovernmental Panel on Climate Change (IPCC) has warned that going beyond 1.5°C will increase the frequency and intensity of climate impacts, such as the heatwaves and storms witnessed across the globe in the last few years. In the report, UNEP said the world must deliver deep cuts to emissions – over 7 per cent each year for the next decade.

The Alliance will also use its powerful voice to engage with governments and ask them to urgently increase their Nationally Determined Contributions ambitions. According to the Emissions Gap report, G20 nations collectively account for 78 per cent of all emissions, but seven of them do not yet have policies in place to achieve their current NDCs, let alone strategies for transformative climate commitments at the breadth and scale necessary.

Convener of Mission 2020 Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change (UNFCC), said: “Reaching net zero emissions by 2050 is a global imperative made clear by science, with huge benefits for all of society.

“We are all better off when finance is flowing towards a liveable future, and today’s announcement makes clear that investors are committed to that pathway. That the world’s asset owners are collaborating unequivocally to limit warming to 1.5°C should be a real boost for all governments preparing to step up their own commitments under Paris in 2020,” she added.

PRI CEO Fiona Reynolds said: “Asset Owners have a key role to play in driving much needed ambition to address the climate emergency. In joining the Alliance, the new members stand alongside founding asset owners in committing to achieve carbon neutral portfolios by 2050. We hope that the leadership shown by members of the Alliance will compel other investors to act urgently to align their portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement.”

By joining the Alliance, members hold themselves accountable on progress by setting and publicly reporting on intermediate targets in line with the Paris Agreement. The Alliance has already begun the process of establishing a work plan for 2020.

The Alliance says members will ramp up engagement with the companies in which they are invested, working together with initiatives such as the UN Global Compact Business Ambition for 1.5°C, the Investor Agenda, the Science Based Targets initiative and Climate Action 100+.

Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI), the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).

BEIS Chair implores Secretary of State on net zero actions

 960 640 Stuart O'Brien
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The Chair of the Business, Energy and Industrial  Strategy (BEIS) Committee  has written to the new Secretary of State Andrea Leadsom to press for action on a series of policy fronts relating to the net zero initiative.

Issued covered include electric vehicles, carbon capture, and energy efficiency, which the BEIS says are crucial to ramp up UK efforts to meet future carbon budgets and the net-zero 2050 target.

On 12th July, the Committee published a report on energy efficiency. The report warned that the UK stands no chance of meeting its emissions reduction targets, including net zero by 2050, unless the Government takes urgent action to revive its failing energy efficiency policy and builders are compelled to deliver the latest energy efficiency standards. 

In her letter to the Secretary of State, Rachel Reeves MP is calling for stronger BEIS-Treasury collaboration to ensure that Treasury’s net zero funding review considers not only the costs, but also the benefits, of delivering the new target.

Reeves wrote:  “I welcome Andrea Leadsom as the new Secretary of State. With the Government committed to the net-zero target by 2050 but currently set up to fail to deliver on the fourth and fifth carbon budgets, it is clear the new Secretary of State will need to hit the ground running and act quickly to ramp up efforts on the policies and actions crucial to tackling climate change and capitalising on the opportunities of a low-carbon economy.  

“The Business, Energy and Industrial Strategy (BEIS) Committee has made a series of recommendations to drive forward progress – in areas such as electric vehicles, energy efficiency, and on carbon capture and storage – which I hope the Secretary of State will be ready and willing to act upon.

“The Secretary of State should also seek to overcome Treasury resistance and ensure that her colleague at No.11 examines the potential benefits as well as the costs of the transition to net zero. The Government should also overcome its ideological opposition to on-shore wind – the cheapest form of electricity generation in the UK – and set out plans to fulfil this technology’s huge potential. “We look forward to questioning the Secretary of State later this year and pressing her on her commitment to the policies needed to deliver on the UK’s climate change obligations.” 

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