The hotel industry is working towards achieving net zero by 2040, with UKHospitality setting 2030 as the target date for eliminating all avoidable Scope 1 and Scope 2 emissions.
In this blog, we take a look at energy management in hotels: how leading industry insights make the case for renewables and energy management solutions to reduce costs, improve efficiency, and help future-proof hotel businesses in a highly competitive landscape.
Hospitality is a complex industry and hotels, in particular, can have wildly differing business operations that will influence the practicalities of a net zero strategy: lease/ownership and estate contractual variations; geographical location; the range and mix of suppliers and customer profiles, and the age and condition of different buildings’ infrastructure. These, and a plethora of other considerations, all influence how any individual hotel or hotel group can achieve the sector’s ambitious decarbonisation targets.
An energy-intensive industry – and a roadmap for change
Hotels are energy-intensive, more so than any other type of building, and The Carbon Trust have estimated annual energy costs for hospitality in excess of £1.3 billion, equating to more than eight million tonnes of carbon emissions, annually[1]. Within the hotel industry, energy takes up to six percent of a hotel’s budget, second only to staff costs. But this energy usage creates approximately 60% of their carbon footprint[2]. Clearly, energy management is a principal part of every hotel’s decarbonisation strategy.
When UKHospitality, working in partnership with the Zero Carbon Forum, launched a Net Zero Roadmap, they emphasised the need to balance sustainability goals alongside the commercial realities of the hospitality sector – especially difficult since COVID-19 and the more recent energy crisis. Alongside areas such as building infrastructure and supplier networks, this Roadmap pinpoints energy and transport as two areas for positive change and action:
Renewable energy:
2025 – 100% renewable electricity for direct operations
2028 – On-site generation and battery storage where feasible
2030 – Franchises source 100% renewable electricity
Transport:
2025 – 100% electric company cars
2028 – 100% zero carbon light commercial vehicles
2035 – 100% HGV’s zero carbon; 100% upstream logistics zero carbon; 100% zero carbon deliveries from engagement with delivery companies.
UK Hospitality’s Chief Executive, Kate Nicholls, laid out one impetus for the Roadmap,
“… with a strong step change in political and public opinion we recognised the sector will need to move faster and further in order to secure the future of the sector, wider economy and country.”
Why focus on energy?
Energy efficiency improvements – switching to LED lights, smarter HVAC, zoning areas with efficient heating controls, for example – are well-established means to improve environmental performance given that these efficiencies can lead to immediate and transparent cost-savings on energy bills. But, to achieve net zero, the sector needs to go further.
The World Sustainable Hospitality Alliance, in its Net Zero Methodology for Hotels, recommends a shift in focus: from energy usage to the source of energy used[1]. And renewable energy and electrification of assets across hotel operations – from the kitchen through to leisure and spa facilities, and including electrification of transport (both in-house and supplier-side) – can make up a substantial part of this effort.
The World Economic Forum have noted that accommodation only makes up around 10% of total annual emissions for travel and tourism, but,
“though this is a relatively small fraction, the accommodation industry has a distinct advantage over others like aviation: it’s not dependent on technological breakthroughs to cut emissions. It’s a question of technology adoption rather than invention.”[4]
This highlights the positive impact that existing, proven, energy management technologies – Battery Energy Storage Systems (BESS), modern low-loss transformers, and Voltage Optimisation (VO) – can have for hotels working towards net zero. And for the differentiation and market opportunity for those hotels – those destinations – that can demonstrate, and prove, their commitment to decarbonisation.
Overcoming roadblocks to net zero with existing technologies
Investment to decarbonise and to reduce energy usage needs to be backed up by data to demonstrate return on investment, whatever the sector – but this is particularly true in the hotel industry and in hospitality, more generally. This is even more pertinent since the launch of the government’s Industrial Strategy, where hospitality and leisure were absent from specific support, particularly painful where energy costs are considered[1].
There is no one-size-fits-all solution to energy consumption/generation across hospitality and its impact on net zero ambitions given the variety of the hotel sector, particularly when factoring in the age and condition of a property, the length and nature of any lease, and the overall strategy of each business.
Looking back to the UKHospitality Net Zero Roadmap, there are clear recommendations pointing to proven energy management technologies:
Renewable energy assets: mainly solar PV, but also wind turbines. These are recommended for on-site renewable energy generation. Depending on the site, these can be fitted as a roof-top array – which can work well for many hotels, given their floorplan / footprint – or can be used a cladding for a retrofit or new-build.
Battery Energy Storage Systems (BESS): Again, these are included in the UKHospitality Net Zero Roadmap as an asset to incorporate where feasible. In addition to storing energy generated from on-site renewables, a BESS can play a pivotal role for hotels looking to address the transportation aspect of the Roadmap – the switch to EV company cars, light commercial and full supply-side electrification by 2035.
For customers, EV charging is an increasingly important facility. Without a BESS, the demand on grid supply may be too much to be accommodated within your authorised capacity, as determined by your Distribution Network Operator. A BESS can circumvent the issue, storing energy which can be used for charging without impacting grid supply. And UKHospitality have highlighted the commercial advantages for hotels investing in EV charging: increased bookings and longer stays; future-proofing; good PR and brand enhancement; new revenue streams, and enhanced visibility on booking sites[2].
Transformers: Many larger hotels or resorts may already have a transformer, but for those looking to invest in on-site renewables, a transformer is vital to integrate this sustainable energy. And those with an older transformer can benefit from updating and upgrading to a modern, low-loss option.
Older hotels often rely on energy infrastructure that has been in service for decades. Ageing transformers not only operate less efficiently and increase energy costs but can also cause unexpected outages – potentially disrupting guest services and day-to-day operations.
For hotels looking to future-proof their operations – whether existing, older hotels upgrading transformers or new builds quantifying immediate and projected energy needs, it is essential to factor in the demand to handle modern power demands and how these are increasing. As the drive for electrification and renewable energy grows, having the appropriately rated transformer in place ensures reliable power, improved efficiency, and the ability to support electrification technologies such as EV charging and modern HVAC systems.
Voltage Optimisation (VO): Where a site may be experiencing fluctuations in voltage – which can vary between 216V and 253V – dynamic VO monitors and adjusts incoming voltage in real-time, helping to avoid equipment damage and unnecessary maintenance costs, while reducing energy consumption and carbon emissions.
Retrofitting in older hotels – quick energy efficiency wins
Given that 80% of 2050 building stock already exists today, retrofitting rather than looking entirely to new build hotels is vital[1]. This stock can be problematic when considering the opportunities for refurbishment laid out in the sector strategies we’ve mentioned: ownership/leases may mean major investment is not commercially viable; historic and listed buildings may have limitations where considering structural changes or alterations to facades, while large-scale projects can be impossible for some geographic locations. Equally, ageing hotel buildings may not demonstrate the ROI necessary for major investment when balanced against the cost and longer-term benefits of new-build.
In these scenarios, retrofitting VO and updating transformers can offer the dual benefits of greater energy efficiency: lower emissions and immediate cost savings.
Where hotels, and the hospitality sector generally, are still feeling the effects of COVID-19 for long-term financial strategies, they are heavily impacted by the energy crisis and the potential for on-going energy price volatility. With minimal disruption to hotels’ 24/7 operations, installation of VO can mitigate unnecessary energy spend while protecting and extending the life of some of a hotel’s most important – and costly – assets. And, for investors, retrofitting energy management assets can support these institutions’ own ESG strategies while adding to the value of a property.
Driven by data
For all of these options, it is critical to work with external experts who can undertake a full site survey, and then use your own baseline data to recommend the optimal solution for your specific site and hotel operational demands. Wherever you are on your net zero journey, establishing accurate data to identify priority areas and measure progress is a vital first step.
The World Sustainable Hospitality Alliance focuses extensively on this: on setting a baseline, and establishing default categories and setting milestones. Specific to energy sources and usage, they are unequivocal about the need for clear data; technical buildings assessments; creation of an inventory of large capital equipment to identify end-of-life or year of changeout, and other elements.
Investment in net zero: meeting environmental and business challenges
There are many challenging aspects in meeting net zero targets for hotels and hospitality by 2040 – building infrastructure, food sourcing and supply, packaging, transport – and these impact across Scope 1, 2 and There are, undoubtedly, challenging aspects in meeting net zero targets for hotels and hospitality by 2040 – building infrastructure, food sourcing and supply, packaging, transport – and these impact across Scope 1, 2 and particularly Scope 3 emissions.
But for those who look to renewables and energy management technologies to meet some key aspects of the net zero agenda, there are clear and immediate benefits:
- reducing costs on one of the largest single budget area, through better energy usage
- increased energy security, if a BESS incorporates Uninterruptible Power Supply (UPS) to ensure vital equipment operates in the event of any power disruption
- greater capacity to monitor and manage energy costs through flexible energy storage assets
- credibility with stakeholders and with customers, and compliance with decarbonisation legislation and regulations
As a leading player in the UK’s economy, and a hugely significant employer, hotels and the broader hospitality industry have a major role to play in helping the UK to achieve Net Zero by 2050. The aim for 2040 can only be met by collaboration: sharing best practice, and sharing case studies where data proves that investment equates to decarbonisation and commercial benefits, with honest communication between customers and suppliers.
At Powerstar, we’re working right now on developing a new white paper – a deep-dive into net zero for the hospitality and leisure sector. Watch this space for practical guidance on energy management and how hotels and the UK hospitality sector can progress along their net zero roadmap.
[1] https://ctprodstorageaccountp.blob.core.windows.net/prod-drupal-files/documents/resource/public/Hospitality-sector-guide.pdf
[2] https://www.curriebrown.com/media/303by5lx/decarbonising-hotels-report_a4-landscape_final.pdf
[3] https://sustainablehospitalityalliance.org/resource/net-zero-methodology-for-hotels/
[4] https://www.weforum.org/stories/2023/08/tourism-travel-net-zero-sustainable-hotels/
[5] https://www.ukhospitality.org.uk/industrial-strategy-a-missed-opportunity-and-leave-behind-swathes-of-uk/
[6] https://www.ukhospitality.org.uk/why-ev-charging-is-becoming-essential-for-hotel-success/
