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Round Table Report

Helping to drive the energy transition across the South West

Never has focusing on energy been so important to so many. With the ongoing crisis in the Ukraine and the cost of fuel rising, we now know how vulnerable we are to market forces. Claiming back control of our energy supply and security has to be a key priority for all residents and businesses.

Within the West of England Combined Authority region, renewable electricity generation has more than doubled since 2014; yet still only provides 11% of the region’s electricity consumption.

Photovoltaics (PV) are the largest regional source, providing 44% of locally-generated renewables, followed by onshore wind at 20%.

Long-term fixed-price solar power contracts are now, in many cases, comparable in price or cheaper than grid electricity - innovation in technology and finance has also opened up new opportunities, especially in the context of reducing consumption through the advent of ‘energy as a service’ solutions. The time to act is now.

Click here to read the full report

A business imperative

Many organisations of all sizes are now focused on energy resiliency, driven by their interest in risk management and mitigation operationally, as well as climate commitments.

Corporations in the South West who have committed to Environmental/Social/Governance (ESG) targets want to use renewable energy - but given that only 11% of energy across the West of England’s combined authority area is renewable, this is challenging.

With the rising cost of carbon credits and offsetting practices, the risks for businesses that do not invest in decarbonisation will increase and may damage long term reputations.

In light of these key drivers, Action Net Zero is focused on collectively driving change by addressing some of the critical barriers which we know exist:

1. Lack of quality of knowledge and understanding of proven products for adoption

2. Lack of awareness regarding different funding models

3. Supply chain decarbonisation challenges

4. Skill shortages affecting growth in the green economy, regionally focused

5. Power infrastructure and connectivity challenges to support decarbonisation of energy

6. Influencing local and national governments to support accelerated action on Ofgem and planning reforms.

Understanding the landscape for change

Here, we summarise the key outcomes from our round table, highlighting what South West businesses need to know in order to decarbonise, reduce their reliance on traditional energy sources and move towards net zero.

Metro Mayor Dan Norris agreed that we need to collectively achieve a 10% year-on-year reduction in CO2 to meet net zero targets, noting that people across the South West are “way ahead of the politicians when it comes to the environment” and are “probably the most astute when it comes to the environment anywhere in the country”.

By understanding the barriers that exist for suppliers, businesses and residents when it comes to reducing emissions, we’re able to find solutions that work for everyone, making our collective transition to net zero more straightforward and more achievable.

When we’re aiming to introduce clean energy and transport options, we have to start with the suppliers.

In the South West, our existing grid infrastructure simply isn’t fit to manage the demand and support a distributed supply of renewable energy; Peter Capener explained that we need to allow grid operators to invest what is required to upgrade the grid if we are to reach the 2030 Net Zero targets set by our towns and cities, as well as to attract inward investment, skills and talent to our region. Lee Chadwick also noted that “grid lead times are a huge restriction at the moment” when it comes to installing new solar PV infrastructure.

Ensuring the grid is robust enough to switch to renewable energy as soon as possible is critical to not just the climate crisis, but to the wider economy and prosperity of the South West.

With the national grid not currently capable of taking excess feed-in energy generated by solar panels, much of the energy generated by businesses is currently being wasted as it cannot be exported back to the grid.

As production across supply chains are impacted by both the pandemic and the war in Ukraine, lead times for equipment like solar PV panels have been severely delayed, meaning that it’s getting harder for suppliers to keep up with demand.

Stuart Urquhart noted that “there are a set of very outdated rules which govern the licensing of electricity and the circumstances in which you don’t need a licence to supply electricity.” This makes it harder for suppliers to introduce new and greener solutions to the market, and requires government action to make it easier for projects to move ahead.

Driving the energy change across the region

One thing that all stakeholders agree on is that decarbonisation of the National Grid is a key step on our journey. To address this, we can use our voice and influence to put pressure on both local and national government to ensure that their policy, funding, and regulations align with our collective 2030 goals. Collectively we can be a driving force for the change that is needed locally.

Getting renewable energy exported back to the grid is a critical part of the solution, which is why investment from both Distribution Network Operators and National Grid via Ofgem is critical. Peter White noted the urgency of upgrades - “we need to do this work urgently”.

In addition, enabling the supply of locally-generated renewable electricity direct to local consumers and installing adequate storage for renewable energy will also allow suppliers to provide more renewable energy on demand, and store it when demand dips, reducing the reliance on traditional supply.

Peter Capener explains “Supporting trial projects and innovation in this sector is essential at all levels, as is making regulatory changes that reflect today’s need for local energy supply within communities”. Enabling local consumers to purchase electricity directly from local generators can help motivate consumers to shift demand away from peak times, and with storage, underpin the transition to a more flexible and decarbonised electricity network.

Peter Capener added that “we’ve been limited, like virtually all generators with new grid offers for connection to the distribution network, to one megawatt by a National Grid led review of transmission level network upgrades. We may have to pay even more towards these upgrades and connection could be delayed till 2027/2028 or even later, which then totally destroys any chance of getting the 2030 carbon reduction targets we talked about. So trying to find a path through this transmission level impact on distribution level connections is going to be critical”.

Lee Chadwick noted that integrating renewable energy supply into new build homes is a key part of the puzzle, and that while new build regulations are set to see increased solar panel installation over the coming years, there’s still plenty of roof space going underutilised; “you’ll have a lovely big roof and you’ll have four solar panels on it, so 1.2 kilowatts where you could have 7 or 8 kilowatts on that house - it’s such an underutilised space.”

Peter White agreed, suggesting that “every new house is at least an EPC ‘A’, and they come with a complete suite of LCT so it makes each house a power station and its own right.”

On the separate topic of outdated rules governing circumstances in which you don’t need a licence to supply electricity, Stuart Urquhart suggested that “lobbying pressure on the government to accelerate its response to a call for evidence, which it issued last year on exactly this topic, but which has gone very silent” would be a helpful way to accelerate change.

With today’s children set to experience 6 career changes in their lifetime, some of which are yet to be invented, addressing the skills shortage in the renewables sector has to start with training. Increasing the availability of courses, including online and short course options, will help to meet the demand from both engaged young people and the shortfall in the sector.

Joanne Philpott noted that funding to encourage transitional skills, such as EV charging skills for electricians, would help people with existing skills to build a career in a more sustainable industry.

The Apprenticeship Levy, which allows larger businesses to use money from their digital fund to pay for apprentices, is a great way to support upskilling as well as to bring more trained professionals into key sectors to combat the climate crisis. Joanne advised that “at the minute most big companies are not able to spend their levy”, therefore there is an opportunity to encourage more businesses to take advantage of this training support.

Renewable energy generation

The best practice solution is always to generate your own renewable electricity on site.

One of the most common forms of renewable energy is solar Photovoltaic (PV). This is where panels are mounted on a building’s roof supplying electricity for business operations and reducing energy bills.

Solar energy is a sustainable, reliable and cost-effective way to power a building, and is ideal for businesses that want to reduce both their energy costs and carbon emissions as part of their transition to net zero. Many businesses also choose solar power as a way to clearly demonstrate their green credentials.

There are already around two gigawatts worth of rooftop solar systems installed on the roofs of businesses across the UK, with around 250,000 hectares of southfacing rooftop space still available, so there is still plenty of potential for more commercial and industrial rooftop solar systems.

When a business owns a solar panel system, it should (if the grid allows) be able to sell any excess energy back to the grid, creating an income stream and further reducing operating costs.

When combined with a battery, a solar power system is also able to store surplus solar energy, allowing you to use solar energy outside of daylight hours.

On-site solar generation is also a great way to power electric vehicles (EVs) with renewable energy, as they are likely to be parked up (and therefore able to charge) during peak daylight hours. In the future, batteries in EVs may also be able to store and release power into the national electricity system - this is known as ‘vehicle to grid’.

Supporting innovation in battery storage, as well as upgrading the grid for more feed-in supply, will mean that any energy generated outside of business hours can still be used to maximum effect.

Solar batteries allow businesses to store and use solar electricity when needed, rather than only when the panels are supplying it, and operate independently from the National Grid. This means that renewable energy can be used outside of daylight hours, helping you to avoid peak energy costs, as well as giving access to electricity during power shortages.

Solar battery storage is not yet commercially viable in all situations, as battery prices are still falling, and a feasibility study is always recommended at an appropriate level of detail based on the scale of the proposed system before purchase.

Technological innovation is also increasing the sustainability of manufacturing processes, so we hope to see battery storage becoming a more feasible and sustainable option for many businesses in the future.

PPAs

Power Purchase Agreements, or PPAs, allow businesses to source solar power through an arrangement with a generator who finances and owns the solar system. The system might be located on a roof space or piece of land which the business leases to the generator, or it might be located somewhere else. In either case, the generator would sell the business some or all of the power generated by the solar system at an agreed PPA price. Depending on the deal struck with the generator, this PPA price may be significantly lower than the price the business would otherwise pay for its grid electricity.

Dave Edwards explained that PPAs give stability for both generators and consumers, and gives more flexibility in terms of funding renewable energy.

PPAs generally work best for companies who use a lot of energy, so can see an immediate reduction in their energy costs - however, the pace of change within the sector means that more developments are on the horizon to support smaller energy consumers, too. Watch this space!

The leasing model means that businesses don’t have to invest in capital expenditure while working towards low carbon goals, avoiding ongoing costs for maintenance or insurance of the solar systems, and providing a more stable energy cost.

A PPA can also be transferred to new occupants, should your business move to new premises. We explain solar for businesses in more detail here. There are calls for the government to offer subsidised loans with fixed rates to make installing solar more accessible for businesses, especially SMEs and community organisations.

PPAs allow businesses to secure a contract for renewable energy with the confidence that they’re adding to the renewable energy supply themselves. There are various forms of PPA on offer, which vary based on the structure of the energy generator and its connection to your business; some will directly supply your own power, whereas some will provide power back to the grid instead.

PPA contracts enable authenticity of renewable energy, as you’re paying for energy to be generated at a renewable energy site. Unless you opt for a hardwired solution, the energy generated may not be located near to your site, but you can benefit from the knowledge that you are funding renewable energy generation as opposed to fossil fuel alternatives.

If you’re looking to help the South West play its role in increasing the amount of energy we get from renewable sources, you may be able to install a renewable energy system on or near to your site. This could include solar panels on your roof, land or car park canopy, as well as wind turbines, battery storage and other technologies.

Are you a business who could benefit from renewable energy, or would you like to find out more about how to fund it?

To learn more about the feasibility of integrating renewable energy solutions into your business, as well as the funding options available, contact us on info@actionnetzero.org for a free consultation - our subject matter experts will then be able to support you with initiatives like solar PV, community energy opportunities and wider ESG support.

Community energy

Another form of PPA can be delivered by communityowned organisations; this is known as community energy The community solar model is designed to generate solar power on a wider scale, and share electricity amongst homeowners, businesses and community groups who are not able to invest in or install their own solar or wind system.

This includes solar farms (where solar panels are mounted on the ground on a large area of land), wind turbines, as well as solar systems on the roofs of larger community buildings like school, hospitals and leisure centres.

The community solar offer to building owners with appropriate roofs, is to install systems at no cost to the building owner, funded from capital raised from local people, and then sell electricity to the building owner at a significantly reduced cost compared to what they are currently paying.

Surplus cash generated by the community solar systems is then redistributed as grants to support community action on carbon reduction and fuel poverty, reducing their bills and redirecting profits back into the community

Green energy supply

If none of the options above are feasible, choosing a green energy provider still plays a part in funding clean energy generation.

When choosing a supplier, it’s important to be aware that not all energy providers supplying renewable energy are as green as they claim to be.

Many providers still include a small percentage of fossil fuels as part of their green tariff fuel mix, which is often “balanced” through carbon offsetting activities. In addition, energy providers can buy a green certificate, known as a REGO (Renewable Energy Guarantee of Origin) for every 1000 units of renewable electricity they purchase from their energy generator. However, it is possible for providers to purchase the REGO certificate without having to prove the energy they’ve bought is renewable!

While energy providers are still a little way off being able to offer 100% renewable gas, it is possible to find a provider that offers 100% renewable electricity. The important thing to remember here is to look at the fuel mix of the tariff you’re on or thinking about switching to carefully. You can read more about ‘good’ energy here.

Navigating some of the barriers

Whilst many businesses across the region are keen to reduce their carbon footprint, some of the solutions can be complex to implement.

Adding solar power to a roof is a great way for owner operator businesses to lower their energy bills as well as their emissions, however with rising interest rates, investments will slow down.

Long lead times and a national lack of installers can also make the project seem unfeasible, as the UK struggles to match the growth in demand for renewable energy. Our round table discussion raised some issues that many businesses encounter, when it comes to the legal implications of installing solar panels. These include listed building consent, complexity with leased buildings due to ownership of roof space, and the long contract periods associated with some PPA contracts, all of which can make the process of installing solar panels or committing to renewable contracts less than easy.

Despite some of these concerns, the business case for selfgeneration in larger energy users is clear, supporting cost reduction, carbon reduction and increased energy resilience. To find out how your business could benefit by generating your own energy, contact us on info@actionnetzero.org for support and advice.

Combatting legal complexity

Installing renewable energy solutions like solar PV is more complex on leased sites, because of the legal implications around ownership. However, it’s still possible to install renewable energy systems on leased premises.

Providing clearer information about the legal implications of installing solar for businesses is key, to make the idea of entering a lease agreement less of a risk. Kerri Ashworth explained that with most solar panels for business premises, “there are legal documents and property arrangements that underpin all of these things”, and noted that providing clear guidance on the legal aspect will help businesses to make the right considerations and choices.

By explaining the benefits of adopting funded, long-lease renewable energy options, we can help businesses to confidently make the right choice for their needs.

Decarbonisation in action

Edwards is a leading provider of environmental abatement systems for the semiconductor industry, and supplies its products and solutions all over the world. Edwards is committed to minimising the negative environmental impacts of semiconductor manufacturing.

Semiconductors are an essential component in most areas of modern life, including 5G network infrastructure, cloud computing, gaming, medical devices, computer hardware and EVs. Being so essential to these sectors means that semiconductor manufacturing is a huge growth area - something that makes Edwards keen to ensure their energy use is sustainable long term, as part of their wider work to reduce their Scope 1-3 emissions. You can read more about emission categories here.

As a business, Edwards strives to reduce the power consumption of their manufacturing processes and their products, as well as making equipment more efficient to allow them to produce more chips with less equipment.

The manufacturing process of semiconductors uses high global warming potential gases, many of which are very stable and are difficult to destroy. Edwards has pioneered technologies for the abatement of greenhouse gases for over 25 years; annually, Edwards products are reducing emissions of CO2e by the semiconductor industry by over 19 million tonnes. But the business knows that they can do more.

Edwards is tackling their emissions by adopting a ‘Remove, Reduce, Reuse, Recycle’ approach. They also recognise the power of ‘Sustainability through Collaboration’ so are working with suppliers, partners and third parties to collectively tackle their emissions and drive forward industry improvements, for the benefit of themselves and their customers.

Changes at Edwards’ Clevedon abatement manufacturing plant include making the facility a 100% renewable electricity site by switching to solar power via a PPA contract and using air source heat pumps for heating and cooling. Other measures at the Clevedon factory include capturing rainwater to reuse as grey water, implementing an EV salary sacrifice scheme and charging points, using high efficiency LEDS, reducing business travel and mandating their default shipping mode to be via sea (instead of air).

The results include:

• 40% saving from heat pumps - 18 tonnes of CO2e

• 16% generation of energy used - 85 tonnes of CO2e

• This in turn saves Edwards’ customers 19 million tonnes of CO2e (the equivalent of 60% of the South West’s CO2 emissions)

Neil Mehta explains; “From an operational perspective, energy is now seen by many businesses as a risk: something that needs to be mitigated, to reduce costs, to ensure operational resilience and to reduce carbon. Moving away from fossil fuels has never been so important, from both a business and regional resilience perspective. If we now think about energy as a key driver for success in a business, reducing our consumption has to be a priority; not just from a cost perspective but also the benefit from a carbon perspective.”

Business transport opportunities

When looking at business transport options, Peter White explained that HGVs produce 16% of greenhouse gases, despite only travelling 5% of the total mileage on our roads. While Project Rapid is currently rolling out rapid charging provisions for EVs at motorway services nationwide, adding HGV charging options will make a huge impact on our national emissions.

Analysis from National Grid shows that expanding the Government’s Rapid Charging Fund to cover all road transport would give enough grid capacity to cover 78% of on-route HGV charging and hydrogen refuelling, and a small marginal cost increase could get us to 100%. National Grid have also invested £1m in the Take Charge project, which has developed new technology to deliver the electrical capacity required to power 80 rapid EV chargers at a single service station site - a saving of almost £500k for each site installation compared to the technology that is currently in use.

Switching business fleets to EVs is a straightforward solution, and encouraging employees to do the same with their own vehicles can be achieved through installing workplace chargers, as well as offering salary sacrifice schemes. You can read more about EVs at work here, and about using e-bikes for business cargo here.

There are emerging opportunities for the adoption of hydrogen in niche areas like heavy transport, particularly where electric transport if not possible, and if hydrogen is generated from co-located electrolysis with local renewable generation.

If you’re interested in finding out more, reach out on info@actionnetzero.org.

Looking at transport emissions, in the South West specifically, a third of our CO2 emissions are related to the use of cars. Encouraging behaviour change is required to shift our transport use to more sustainable options, and this requires public transport options that are reliable and affordable enough to be an attractive alternative to cars. Additionally, raising awareness of existing underutilised public transport routes will help people to make the shift sooner.

One of the easiest ways for us all to reduce our carbon footprint and meet our collective Net Zero target is to reduce our overall energy demand.

The IPCC’s latest report calls for a society-wide approach to reducing how much energy we use - meaning that we need to change every part of how we live, from housing to transport, at a global level. This requires action from governments and larger organisations, as well as each of us at an individual level.

How can you help influence change?

Our collective mission is to mobilise organisations and individuals to act; helping to support the South West to reduce its reliance on fossil fuels by supporting the decarbonisation of the grid, moving to distributed energy and reducing energy consumption.

Contact info@actionnetzero.org to join in.

We’re canvassing support across the South West to influence MPs and influence government. Add your name to our list of businesses across the South West who want to see more action when it comes to getting our grid renewable-ready, and we’ll use it to influence local and national governments to take a step forward on our net zero journey.

Just enter your details here to support our case.