At the recent Edie 25 conference, an energy expert referenced the ancient Chinese proverb,
When is the best time to plant a tree? Twenty years ago.
When is the next best time to plant a tree? Today.
Addressing Environmental and Social Governance (ESG) strategies might not seem the immediate top priority for UK manufacturing, given the current global economic climate. But taking a proactive approach to decarbonising your business can reap financial and reputational rewards. In this blog, we look at some of the issues and opportunities for SMEs embarking on their net zero journey.
Resilience in an electrified world
Resilience was a theme running throughout the Edie sustainable business conference. And, with government commitments to decarbonisation, including the 2030 Clean Power Action Plan and the establishment of Great British Energy to drive forward the development of clean energy, power resilience is a topical issue. For the UK as a whole, the rapid progress of electrification raises concerns over grid constraints as demand for electricity grows, outpacing our current centralised infrastructure’s ability to support these needs securely. For manufacturers, power resilience – protecting your own energy supply – is business-critical. But addressing the issue can seem challenging.
Where energy makes up a significant proportion of many manufacturers’ costs, rising or unpredictable energy prices impact both profitability and growth. Reviewing your own energy infrastructure can pinpoint areas of potential to improve power resilience, while also helping to reduce your energy spend.
Meeting sustainability goals
Focusing on sustainability – the journey to net zero – can be useful when seeking to improve energy security and affordability, and maintain competitiveness. For businesses across the manufacturing supply chain, positive steps towards energy sustainability signal to your customers – both existing and potential – that you are committed to decarbonisation, and to helping them achieve their own decarbonisation and ESG goals by contributing to their Scope 3 emission reductions. Giving you a competitive advantage in the short-term, a commitment to decarbonising your own business can also support longer-term imperatives, including UK-wide net zero deadlines.
While there’s some debate – not least from leading voices within the energy sector – as to whether the UK can meet the 2050 net zero commitment, this is currently still legally-binding. And there is a strong argument that investment in the green economy is crucial if the UK is to be competitive on the global stage. Within the domestic arena, looking to the manufacturing supply chain and Scope 3 emissions and ESG, there are stakeholder demands to decarbonise led by customers as well as end consumers; by shareholders; from potential and existing investors, and from employees.
The power of collaboration
Alongside the question of resilience sits the concept of partnership and collaboration, another focus of the recent sustainability conference: capacity building, across the supply chain, and forging alliances – including working with competitors – to create industry-standard frameworks for suppliers. These focus on Scope 3 emission reduction by harnessing the purchasing power of large-scale customers in the procurement process to drive sustainability ambitions.
Ultimately, if your customers are focused on emission reductions – even collaborating with competitors to drive momentum – suppliers who demonstrate their own commitment to working towards decarbonisation will be favoured above those who ignore the issue.
But devising and implementing a decarbonisation strategy can seem challenging. Fear of scrutiny is one factor, especially when needing to demonstrate your credentials to customers who may be much further down the line with their own net zero strategies and policies and, depending on the type and size of customer, may have a team in place focusing solely on sustainability – something many SMEs simply cannot afford. As technology in the energy sector is developing rapidly, trusted information sources are critical – and both businesses and the public like to be informed, rather than sold to. And, as last year’s UK Net Zero Business Census noted, many companies simply do not know where to start.[1]
Technologies to kickstart your journey
When considering power resilience, energy affordability and sustainability, there are proven technologies that can mitigate the financial risk of investment, helping to prove their value to stakeholders, particularly to investors and shareholders. For example, amorphous core transformers are far more efficient than their older counterparts, and can lower core losses by up to 70%, reducing emissions and energy consumption which equates to lower energy bills. Similarly, upgrading Voltage Optimisation (VO) to modern dynamic VO technology can – where over-voltage is an issue – provide better-conditioned power, with greater efficiency and lower energy costs, while reducing your demand for power from the grid. These are technologies that may already form part of site infrastructure for many energy-intensive manufacturers, and can be upgraded or optimised as part of a broader decarbonisation strategy.
And, looking further to the issue of grid constraints, companies can invest in Battery Energy Storage (BESS) with Uninterruptible Power Supply (UPS). This allows for the seamless integration of on-site renewable assets, harnessing the BESS’ storage capability for the optimal blend of grid / on-site energy usage, and maintaining resilience through the UPS to help avoid operational disruptions, should your site be affected by grid instability. Here, the three issues of sustainability, energy affordability, and power resilience can be addressed through modern energy management technologies.
The case for implementing a decarbonisation strategy is compelling, to mitigate financial and reputation risks. But it is progress over perfection. And it’s a journey. Whatever your current position, partnership is vital: working with an energy specialist who understands the nature of that journey, for both short-term benefit and to meet longer-term goals.
