• Winter 2023 energy market, while presently in a state of equilibrium, is tethered to uncertainties that could potentially sway its dynamics.
• Ongoing concerns about Russian gas supply cuts and Europe’s reliance on LNG and Norwegian gas amidst Russian uncertainties.
• Gas remains crucial, and wind generation’s impact depends on unpredictable winter weather.
• Risks include Norwegian supply issues, heightened Asian demand, or prolonged cold spells.

With winter approaching, the energy market is seemingly on calm waters. European gas storage levels are at an all-time high while there is a steady supply of Norwegian gas alongside indigenous sources. Liquefied natural gas (LNG) imports continue to arrive in Europe, although more cargoes will be needed during the winter.

If the temperatures remain mild like last year, alongside strong wind generation, the market is well placed to meet energy demand this coming winter.

Nevertheless the market remains highly sensitive to the possibility of uncertain shifts and the consequent challenges.

Several key factors, both on the supply and demand fronts, are poised to influence the energy landscape. Even a minor alteration has the potential to shift the delicate equilibrium that currently defines the market.

In this blog post, we’ll explore the upcoming tendencies in the energy market, examining the dynamics that will shape the winter landscape and the current outlook.

Supply Dynamics

Once again, like last year, the spectre of a lack of Russian pipeline supply looms over this winter’s energy market. The Russian export cuts has had an overarching effect on the global energy market. Historically, Russian fuel accounted for a significant proportion of the gas usage in Europe.

To offset the shortfall from Russian pipelines, there has been a notable shift toward LNG and an even heavier reliance on gas supplies from Norway.

The UK and Europe are currently highly reliant on LNG imports from the USA and other parts of the world.

Simply put, if demand for energy sees a surge during the colder months, the UK will find itself competing for LNG with European and Asian buyers. In such an instance, there may be dramatic increase in energy prices across the board.

As for the UK and Europe’s heavy reliance on Norwegian gas supply, any disruptions could have a significant impact on energy supply.

Currently, gas storage levels are high, especially in Europe. This provides a buffer against short-term disruptions but necessitates careful monitoring throughout the winter to ensure strategic reserves are managed effectively. A colder winter season could see stocks drawn down more quickly, requiring gas from other sources to meet demand.

Gas remains a significant component of the UK energy mix. Whilst the availability of French nuclear generation has seen improvement on last year, this and renewable generation may not offset high demand for gas at times during the winter. As such, keeping a close eye on it is important, as it may contribute significantly to the overall energy supply in Europe if there is an uptick of demand.

As for renewable options, it may be a good idea to also keep our sights on wind generation. The contribution of wind generation to the energy mix is a variable factor. While wind generation could serve as a substitute for gas-produced power, its contribution hinges on the availability of strong wind patterns, which can be uncertain during the winter months.

Demand Dynamics

Weather conditions in winter play a pivotal role in determining energy demand. If temperatures are low for extended periods, overall energy consumption will rise, particularly if this is coupled with lower wind generation. The uncertainty surrounding weather conditions means that market prices could react to periods of colder weather.

As things stand, the UK and EU are highly susceptible to global events. The key factor to consider here is the dynamics of LNG demand in Asia. Monitoring Asia’s energy needs will be critical, as any shifts in demand there can have a ripple effect on the global energy market.

Furthermore, the current state of the economy may result in reduced energy demands. Economic contraction poses the possibility of energy users making significant cuts to usage in all possible areas.

Striking a Balance

While weak demand may initially provide a cushion for the market, the delicate balance can tip swiftly. Factors such as any issues with Norwegian supply, increased demand from Asia, or prolonged cold spells can upset the equilibrium. The overall tightness in the market makes it highly sensitive to risks, demanding a proactive and adaptable approach from businesses and organisations.

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Average Hourly Generation

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Success in the NHS

A UK NHS trust made facility management news back in 2020, as it implemented a comprehensive upgrade to its lighting systems. Undertaking a site-wide LED installation meant that the trust enjoyed savings in excess of £180,000 annually.

The gains of the forward-thinking trust are not only measured in pounds and pence; the switch to highly efficient LED lighting, whose lifespan is more than quadruple that of its fluorescent counterparts, also means reduced maintenance as well as a significantly diminished carbon footprint.

Capital gives green light for LEDs

In 2020, the city of London underwent a large-scale retrofit of over 8,000 traffic signals, regulatory box signs and push buttons. Upgrading these sites to LED lighting is expected to deliver energy and cost savings of 75% for Transport for London.

“It’s making our infrastructure greener, more sustainable and cheaper to run and not only that but as LEDs are more visible it is making our roads safer…”

– Glynn Barton, TfL’s Director of Network Management

This conversion echoes another 2018 retrofit that saw 25,000 London signals at 900 sites upgraded with similar technology.

Hertfordshire County Council is taking this attitude a step further and has pledged to replace all the street lighting in its seat with LED illumination. The project reached its final stage in 2020 and the council expect it to reduce street lighting CO2 emissions by more than half. In material terms, this equates to 12,000 tonnes of carbon dioxide and £5m saved for the residents of Hertfordshire.

The commercial picture

The benefits of LEDs are not just public sector, businesses can also make significant savings with this technology. Consider that a 20% reduction in energy costs can have the equivalent economic effect of a 5% increase in sales.

The difference with an LED installation is that it is permanent, and not subject to market conditions.

Traditional lighting actually wastes 95% of the energy it uses on the heat it produces. Since it operates at low temperatures, LED lighting reduces this waste by 90%. This also makes LED a much safer option if the lighting is located near human activity.

By effectively removing this heat source, temperature control systems like air conditioning will operate with greater efficiency. As EIC’s TM44 blog demonstrates, this too can equate to significant savings.

The future for LED lighting

The use of fluorescent lighting bulbs is being phased out. As units break, they must be replaced with LED equivalents because the sale and installation of new fluorescent tubes and light fixtures are prohibited beginning in September 2023. This is not only because of hazardous substance of Mercury within fluorescent lighting, but alternating to LEDs also provides many advantages, including:

• Strong energy efficiency
• Extended service life
• Adaptability in terms of light colour
• Outstanding photometric qualities

How EIC can help

EIC’s Lighting Solutions, including complimentary lighting control systems, has helped dozens of organisations. These controls include movement sensors, time clocks and light sensors which can all support an LED upgrade in reducing costs and CO2 footprint.

The EIC service includes initial surveys to establish the unique needs of a site, later formulating a bespoke proposal. Once installation is complete, EIC will also provide supplementary training to teams within an enterprise to ensure the new equipment is used as effectively as possible.

A full breakdown of this service is available by contacting the EIC team here.

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• 250 or more employees
• An annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million.

What is ESOS?

Large UK firms are required to report on their energy consumption and find potential methods to consume less energy under the ‘Energy Savings Opportunity Scheme’, which is a mandated programme. We are now in Phase 3 of its four-year cycle. If your company falls inside the scope of the plan, you must abide by the rules or risk fines.

What happens if you don’t comply?

Organisations who fail to comply with ESOS regulations or meet the required criteria risk facing financial penalties from the Environmental Agency (EA). The changes to legislation in 2022 have also increased the reporting requirements for Significant Energy Use (SEU) from 90% to 95%.

Additionally, with limited ESOS Lead Assessors available for ESOS Phase 3 compliance, it’s crucial for companies to act now to ensure compliance and avoid potential fines and penalties.

All non-compliance will be made public by the EA on their website, with the amount you were fined. There are different types of non-compliance all with separate breaches and various penalty amounts. These include:

• Failure to Notify

Any organisations who do not declare they have met with their ESOS responsibilities will be punished since it will compromise the integrity of the programme. Whether or not the organisation has conducted an energy audit, they might still be fined up to £5,000 as well as a daily fee of £500 for each working day they are in violation (for a maximum of 80 days). This amount would be added to any additional penalties as well.

• Failure to maintain records

Maintaining your records is essential so that you can carry out an energy audit and provide proof of your ESOS compliance. In the event that this is not done, there will be a £5,000 punishment as well as an “amount representing the cost to the compliance body of establishing that the responsible undertaking has complied with the plan,” which must be settled. To correct this violation, the compliance body will provide measures, which must be followed.

• Failure to undertake an energy audit

The greatest punishment is assessed when an energy audit is not performed because it is a crucial ESOS obligation. It is worth making sure you comply if required since the fine is £50,000 as well as £500 for each working day an organisation is in violation (up to a maximum of 80 days). With a decreased fine of £5,000, new entrants are treated more leniently. Keep in mind that organisation is no longer regarded as a new participant in the ESOS program’s second phase. Additionally, corrective measures (such as doing an energy audit) must still be taken.

• Failure to comply with an enforcement/penalty notice

Any organisation that disregards a compliance, enforcement, or penalty notice will be subject to this fine. An organisation will be subject to an initial punishment of £5,000 followed by £500 for each day that it is in breach, up to a maximum of 80 days.

• False or misleading statement

Your ESOS evaluation and report must be factually correct and accurate. The largest penalties, again £50,000, might be expected from an organisation if the EA finds that you made a false or misleading statement.

What should you do now?

The final deadline to complete and submit your ESOS reporting for Phase 3 is 5 December 2023. Your data should be based on a 12-month period that includes the qualification date (December 31, 2022) and ends before the compliance date for ESOS Phase 3 reporting (5 December 2023). It might begin as early as 1 January 2022 and it could finish as late as 4 December 2023. Within that timeframe, any consecutive 12 months are acceptable. This is referred to as your reference period. During then, you need to:

1. Calculate the overall energy usage of your business

You will need to calculate the total energy consumption of your business, which includes energy needed for industrial operations, building heating and lighting, and transportation fuel. These should be reported in a standard unit, such as pounds sterling or an energy unit like the kWh.

2. Locate places with high energy consumption

You can classify up to 5% of your organisation’s energy use as “de minimis” under the ESOS regulations for Phase 3. You might decide to exclude a location, an activity, or the use of a certain fuel. You must still have a “significant energy consumption” of 95% or higher.

3. Review the data

Your report should examine how much energy your business uses and how energy-efficient it is. It should include suggestions for potential improvements to your company’s energy efficiency and include information on their costs and advantages. For more information, please visit EIC Route Zero.

4. Request that a lead assessor review the report

According to the ESOS regulations, a certified lead assessor is required to review your report. Several situations constitute an exception to this rule:

• If ISO 50001 certification already covers 100% of your energy use
• If the company uses less than 40,000 kWh of energy annually

If you have no energy supply (although you will still need to notify the Environment Agency and get a director to confirm this). Before approving it, the corporate directors and the lead assessor should both evaluate your report.

How can EIC help with your compliance needs?

Our carbon team have extensive experience with complex compliance legislation and are dedicated to helping you reach deadlines efficiently. Our Lead Assessors and highly trained Auditors are on hand to assist you throughout your compliance process.

We have assisted over 550 clients with their ESOS journey, and in doing so have identified 4.65 million tonnes worth of CO2 savings. This has meant that our clients have avoided approximately £80 million worth of fines over phase 1 and 2.

Whilst balancing other jobs and responsibilities, schemes may seem like a hassle. Fortunately, EIC can help turn that obligation into an opportunity for your organisation.

Get in touch or call us on 01527 511757 to find out how we can help you start your compliance journey.

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We look at how these changes will impact consumers and how we can help businesses to prepare.

What does the review include?

Changes to TNUoS

Transmission Network Use of System (TNUoS) charges cover the costs of maintaining the electricity networks that supply your energy. Ofgem is implementing changes to these charges to ensure that costs are distributed fairly across all consumers.

Subject to Ofgem consultation, from April 2023 a proportion of your TNUoS charges will be based on a series of fixed charging bands.

The band you are placed into will depend on your average annual consumption for non-half hourly (NHH) sites or average capacity for half-hourly (HH) sites, calculated over the two year period from October 2018 to September 2020.

TNUoS charges for non-domestic consumers will be based on a series of fixed charging bands set for the whole country, as seen in the table below.

Ofgem will review and may revise these charging bands and their boundaries so that they can be implemented alongside new electricity price controls, with the next (RIIO-3) starting in April 2026.

Changes to Triads

The largest component of Triad charges is called the Transmission Demand Residual (TDR), and this is the charge that will change from April 2023, becoming a fixed charge rather than being determined through Triads. Triad charges will continue to apply to the forward-looking components of TNUoS charges, which are known as the Transmission Demand Locational charges, although these represent less than 10% of the total TNUoS charge.

Triad periods are the three highest winter peak periods. They are retrospectively calculated in March each year and form the basis of the transmission network component (TNUoS) of large companies’ energy bills. By reducing consumption or switching to onsite generation during forecast Triad periods, some firms can save large amounts of money on their bills.

The removal of the TDR leaves one Triad season left currently occurring this winter, continuing until the end of February 2023. Beyond that, the incentive for Triad avoidance will be greatly reduced. And companies that are taking action to reduce costs during Triad periods could see an increase in their electricity bills.

What impact will this have on consumers?

The TCR changes are set to benefit larger consumers with half-hourly (HH) meters, whilst domestic and NHH sites will see a small rise in costs. Consumers outside of London currently experience a rise in Distribution Use of System (DUoS) fixed costs. This is partially offset by a decrease in DUoS unit costs. Most HH sites will also benefit from a drop in TNUoS costs. Whereas domestic and NHH sites face a potential rise in TNUoS costs.

The graph below shows that southern areas are more likely to see a larger decrease in costs than northern areas. HH sites in London, for example, will see TNUoS and DUoS costs decrease by an average of 36%. Whereas HH sites in Scotland will only see an average decrease of 7%. Incidentally, London is also the only area where domestic and NHH sites will see a net benefit from the TCR changes.

Consumers currently taking Triad avoidance action will not see the cost reductions shown below, as that benefit ends in April 2023. Similarly, sites that have a capacity level which is set too high are likely to face an increase in costs, as they could be placed into a higher charging band. Extra-high voltage sites are not included in the graph below, as they are subject to site-specific tariffs and need more detailed analysis.

How EIC can help

The figures calculated above are based on an average consumer in each charging band. The analysis covers a wide range of consumers with varying demand profiles and cannot easily be applied to individual consumer costs.

The best way to determine exactly how the TCR will affect your business is with our Long Term Forecast Report. This provides your business with a specific breakdown of electricity costs over a 5, 10, 15 or 20 year period. This valuable report will allow you to confidently plan your long-term budget and avoid any nasty surprises.

To learn more read about our Long Term Forecast Report service or contact us today.

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Energy Efficiency Day is the perfect time to look at your costs and figure out if you’re using your energy in the most intelligent way possible.

What is Energy Efficiency Day?

Energy Efficiency Day takes place on the first Wednesday in October. Dozens of energy efficiency advocacy groups come together to raise awareness about reducing consumption.

It’s a day to share tips and tools to promote the benefits of energy efficiency and encourage people to think about what they can do to save energy.

Why is energy efficiency important?

Energy efficiency has multiple benefits that can have a positive effect on businesses and the planet.

Reduced costs

If you want to save money, the easiest thing you can do is reduce your energy consumption. eEnergy estimates that 30% of all the energy that is currently wasted comes from commercial buildings. Some of the highest energy consumers’ annual savings could be as high as £3.1 million just by introducing energy-saving solutions.

Reduced carbon emissions

Burning fossil fuels is our biggest source of energy. On average, around 50% of our electricity in the UK is generated using fossil fuels, creating carbon emissions and damaging the planet. Using your energy more efficiently produces less damaging waste and carbon emissions, improving your carbon footprint.

Lowering carbon emissions now puts businesses in a good place for the government’s net-zero plan. There’s no harm in getting started early and reducing carbon emissions where you can.

How can you save energy?

There are small changes businesses can make that can help to lower energy consumption:

• Switch to energy-efficient light bulbs.
• Switch off lights in areas that aren’t occupied or invest in sensors.
• Use power-saving mode on computers.
• All computers should be turned off when not in use.
• Avoid using the printer; only use it when it’s essential.

Employees would have to get involved, be responsible for their own equipment, and ensure they are turning everything off at the end of the day.

These are only a handful of changes you can make. EIC can find solutions that will save you money and help you reach net zero targets.

How can EIC help you lower your energy consumption?

We understand the positive impact energy efficiency can have on businesses and the environment. We are passionate about helping businesses meet their net zero goals and cut energy consumption.

We can create solutions to help you buy, manage, and control your energy. Our solutions are categorised into three service areas: Intelligent Buildings, Smart Procurement and Trusted Compliance.

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A flexible contract allows businesses to take advantage of the ever-changing energy markets, when fixed price contracts are too restrictive for your needs. For larger energy users, we can help you take advantage of a volatile energy market and make sure you benefit from any peaks and troughs in the markets. Our aim is to maximise contract flexibility, whilst minimising your costs.

Let’s take a look at six things you should consider when negotiating a flexible energy contract.

Contract duration

The duration of your flexible energy supply contract is often driven by market liquidity – how easy it is to trade energy on the markets. The trading windows cover four seasons (24 months) for electricity, and six seasons (36 months) for gas.

Longer duration flexible energy contracts provide optimal trading opportunities – so we can manage prices over time and make strategic trading decisions. It is also worth putting in place a supply contract for any periods when you need to work within a budget.

Non-commodity charges

It’s important to think carefully about your non-commodity costs when securing your flexible energy supply contract. There are many options available. These range from fully fixing all or some non-commodity charges, to having all charges fully passed through at cost.

Fixing non-commodity costs will incur a premium and there are opportunities to save on time based non-commodity costs, although these are reducing with changes to the way that distribution and transmission charges are calculated.

Non-commodity costs will make up around 67% of your overall costs by 2025. So, it’s vital to look at your wider energy strategy, and consider taking a more flexible approach.

Trading flexibility

Although the commodity element of your costs now makes up a smaller portion of overall spend, this is the element that we can influence most through active trading. We have access to supplier trading desks, and the ability to refloat volume means that we can sell back any energy that we have previously purchased on your behalf. Varying the size of tradeable clips should also be considered to maximise trading flexibility. Whilst there are minimum clip sizes that we need to work within, this gives us the option for multiple purchases, rather than purchasing all of the required energy immediately. This gives you more flexibility.

Some suppliers will also charge trading transaction fees, which can result in additional costs over the duration of the contract – so these should be factored into supply contract negotiations. We will also take into consideration your preferred trading strategy, ensuring that your contract provides the required levels of flexibility.

Volumes

When tendering a flexible energy supply contract, suppliers can make a more suitable contract offer if they have accurate information to hand – such as precise volume forecasts. Some suppliers will apply a volume tolerance to a supply contract and set limits on reforecasting.

So, if there are any planned or known volume changes anticipated, it is important to take these into consideration. Putting in place accurate trading volumes from the start means that we can implement effective buying strategies, from both a trading and budgeting point of view.

Administration

When choosing a supplier to renew with, it is important to consider your requirements relating to payment terms, invoicing and data access. Some suppliers can be more flexible than others regarding invoicing and payment terms, and certain factors – such as credit – can impact on the options available.

There are also variations in what a supplier can offer in terms of data access. Whether this is access to consumption data or invoices via a dedicated contact, or via an online portal.

Negotiation and analysis

Suppliers will charge specific fees for managing a contract and offer different premiums – for example, for renewable energy options. It’s therefore vital to analyse supplier offers on a like-for-like basis, to ensure you secure the most competitive contract available.

Tender negotiations should consider all aspects of a supply contract, to achieve the best contract terms in line with your requirements. The main aim is to procure a competitive contract with a supplier that meets all of your day-to-day needs, whilst offering trading flexibility to suit your strategy.

How can EIC help?

Achieving more flexibility in the energy markets is an integral part of EIC’s client commitment. Through a variety of services, including flexible procurement, smart metering, and many years of experience working with carbon monitoring and compliance, EIC goes to great lengths to offer consumers freedom and flexibility.

Our goal is to find the bespoke energy package that best suits your business or property, while simultaneously lowering your costs and carbon emissions.

We have considerable experience in negotiating individual flexible energy supply contracts for our clients. We’ll analyse each offer, negotiate with each supplier and rank final offers against an appropriate scoring benchmark pre-agreed with you. From this, we’ll shortlist the leading suppliers and negotiate the best overall solution – ensuring that you’re fully involved at each stage.

Click here to find out how our Flexible Energy Procurement solutions can transform your electricity and gas-buying strategies.

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But now, companies are taking matters one step further and making the leap towards becoming carbon negative. This is a significant investment in reducing carbon emissions and this move should also bring various benefits, in terms of business strategy.

With energy prices around the country continuing to rise, energy efficiency and cost effectiveness are vital for any business wishing to progress in this difficult climate. Going carbon negative makes perfect sense in the current economy.

So, what does ‘going carbon negative’ actually mean? And how can a business achieve carbon negative status?

What is a carbon negative organisation?

Put simply, carbon negative organisations sequester more carbon than they produce. Somewhat confusingly, the term ‘climate positive’ also has the same meaning, and you may see this terminology used as well.

Choosing to become carbon negative can accelerate your business towards its net zero targets. You have reached carbon negativity if the amount of CO₂ emissions you remove from the atmosphere is greater than the amounts you are releasing into the atmosphere. This might include bioenergy processes with carbon capture and storage, for example. By changing your daily business processes and actively removing carbon from the atmosphere, you are making a positive impact – on your business and the atmosphere. Sustainability is now a corporate strategy of choice, helping businesses to strive ahead of competitors towards net zero targets. It can also form part of a wider Environmental, Social and Governance (ESG) strategy, which provides transparency to stakeholders.

How can businesses implement carbon negative structures?

Reduce energy use

With energy prices sky-rocketing, it is in the interests of every business to limit energy usage to only that which is necessary. Energy efficiency is the most obvious way to reduce consumption and it can bring numerous environmental and financial benefits. Transparency surrounding energy efficiency could also increase a business’s standing, in a market where consumers are becoming more aware of the environment. Energy efficiency is therefore an essential component in the journey towards net zero.

Consider encouraging employees to incorporate efficiency into their daily lives – such as switching off appliances when they leave the building, closing windows when HVAC systems are in use, and making the most of any natural light. These measures can go some way towards reducing your energy consumption.

An energy audit can assess how much energy is being used in each sector of your business. An audit typically looks at factors such as lighting, heating, water usage, air conditioning and the use of electrical devices. Ongoing performance monitoring can also provide reassurance that your systems are delivering to a good standard.

Incorporate green appliances

Installing renewable energy sources allows businesses to save money, whilst also reducing their environmental impact. Solar panels and heat pumps are also remarkably easy to upkeep.

Not only will these renewables cut costs, and reduce your environmental impact, taking these measures can also demonstrate your business’s sustainability credentials. This can potentially attract a wider range of eco-aware clients.

Switch to more efficient lighting

LED lighting is the most cost-effective and durable option, for both businesses and households around the world. Making the switch to a different lighting system for buildings, possibly on multiple sites, can seem daunting. But the eventual return on investment will be beneficial from an environmental perspective, as well as saving you time and money. These bulbs require far less electricity power and have a much longer lifespan.

At EIC, our lighting solutions have helped businesses to upgrade their systems and reduce their carbon footprints.

Get in touch today to find out how EIC can help you to integrate effective and efficient lighting solutions into your business.

Optimise heating and air conditioning

Taking control of your heating and air conditioning could make a big difference to your emission levels. Switching your systems off when they are not needed can help your business to save money and reduce unnecessary waste.

Implementing temperature controls means that heating and air conditioning units are only used when they are needed. So, no energy will be wasted during out of office hours.

Encourage greener commutes

Transport is the largest contributor of greenhouse gases in the UK, and accounts for 28% of all emissions. Consider offering a Cycle to Work scheme to encourage your employees to reduce their environmental footprint. Carpooling, public transport, and walking can also help businesses to lower their carbon footprint.

When assessing a business’s energy consumption, government schemes (such as ESOS) take into consideration the amount of energy used on transport. So, for eligible businesses, lowering energy consumption from transport is essential.

Set science-based targets

More broadly, your business should align itself with net zero targets and then go above and beyond this, to become carbon negative. The Science Based Targets Initiative (SBTi) is a well-established method for reducing carbon emissions, based on climate science. The SBTi independently assesses and approves companies’ targets in line with its strict criteria, which furthers the aims set out in the Paris Agreement. The target is to limit global warming to 1.5C above pre-industrial levels.

You can find out more here.

Offset (but beware of greenwashing)

Whilst it should not be overused, carbon offsetting is a good way to compensate for your carbon emissions. Carbon offsetting involves investing in projects that sequester carbon, such as planting trees. Offsetting will help to stabilise global temperatures in the short term, and in some cases, foster restorative projects that will act as natural carbon sinks for centuries to come.

Offsetting projects generally fall into four categories: Nature-based, renewable energy, community projects and waste-to-energy projects. You should only invest in carbon offsetting projects that have been independently verified, such as Verra or Gold Standard.

What’s more, the SBTi have recommended that carbon offsetting should only be used in the route to net zero as a transitionary and supplementary tool. When you choose EIC to help you navigate the route to net zero, we provide you with the most sustainable options and only provide carbon credits for emissions that cannot be avoided or reduced in the short term.

At EIC, we understand that your corporate social responsibility credentials are key to maintaining the reputation of your business. We offer a comprehensive Carbon Management Plan service to ensure that your business is transparent and accountable with respect to its carbon emissions.

We can help you to formulate your carbon management policy, set carbon reduction targets and measure emissions and monitor progress on an ongoing basis.

In addition, we offer a verified carbon credit scheme to assist you where you may require carbon offsetting to supplement your emissions reduction strategy.

Get in touch today to find out how we can help you to become carbon compliant.

Where does EIC come in?

Achieving a carbon negative office space brings businesses a lengthy list of benefits. Aside from the potential to save money and reduce energy usage, businesses could attract a larger number of potential customers with its transparency regarding its carbon related business plans.

EIC understands that intelligent building design and frugality around resource-use work in hand in glove. As such, EIC offers a comprehensive carbon service combining building management, intelligent procure and compliance acumen.

Marriage of these three pillars means unlocking the full potential of sites, and leveraging for the benefit of all. EIC’s full offering is available on our Services page.

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The following  are some of the newly introduced changes that are being made to the scheme:

• The government has expanded the Energy Bill Relief Scheme. Expansion of the scheme means that customers who signed contracts at the end of last year or the first quarter of this year are now covered.
• Relief can be claimed on selected dates where wholesale energy prices were extremely high for fixed contracts signed between December 1st, 2021, and 31^st March 2022. Previously, this was only applicable to contracts signed on or after April 1st, 2022.
• There’s a new requirement on suppliers to ensure the price customers pay does not fall below the government-supported price of 21.1p per kWh for electricity and 7.5p per kWh for gas. This means when wholesale costs, network costs, environmental levies, and supplier margins are all factored in, the price customers pay (known as the ‘effective retail unit price’) cannot fall below the government-supported price.
• The Climate Change Levy and VAT can, however, be added on top of these costs.
• For those customers on flexible purchase contracts, the government has confirmed further details will be released shortly.

The original blog post from September 14th can be found below.

Business energy consumers will receive financial support from the government, under a new 6 month energy support scheme, in response to the current energy crisis.

The government has said that non-domestic energy users will be offered an equivalent Energy Price Guarantee, as is currently being offered to domestic consumers. This is due to concerns that non-domestic consumers have been overly exposed to rising energy prices, without the benefit of the Ofgem price cap.

The Energy Price Guarantee for domestic consumers is set to replace the current energy price cap, and limits the amount of energy that suppliers will charge. The savings will be based on usage. This should lead to a typical UK household paying on average £2,500 a year on their energy bills for the next two years. The new support scheme for non-domestic consumers should result in similar savings.

The scheme for non-domestic consumers will be reviewed after 3 months to see how it is progressing and to consider where it should be targeted, to ensure those most in need receive support. After the 6 months have passed, only those industries considered to be ‘vulnerable’ will continue to receive support.

More information about the government scheme for businesses can be found here.

More broadly, the government has also set up the Energy Supply Taskforce, which will negotiate with energy suppliers with the aim of lowering wholesale costs. This is the main factor behind the current energy crisis. The Taskforce has already begun negotiations with domestic and international suppliers to agree long-term contracts that reduce energy prices and increase the security of supply.

How can EIC help?

At EIC, we understand the pressures that businesses are currently facing, as the energy crisis continues to wreak havoc on the economy. Our years of experience, and expert traders, can closely monitor the markets to find the best energy deals for you. Whether you are currently on a fixed or flexible contract, or looking to switch, we are well-versed in smart energy procurement.  Our dedicated team are on hand – saving you time, and money.

Get in touch today to find out how we can help you with your bills during the energy crisis.

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As a result, energy security has never been more precarious. European nations are particularly reliant upon Russian gas supply, and Russia has just switched off the Nordstream 1 gas pipeline, sounding the alarm across Europe.

It is therefore understandable that Western nations are jittery about the state of energy security. But recent murmurings have suggested that countries are now putting green energy on the backburner, as their concerns over energy security takes precedence.

A recent survey by the World Energy Council has revealed the opinions of nearly 600 leaders working in the energy sector worldwide – and there is a marked decline in optimism regarding the pace of the energy transition. 44% of those surveyed felt that the crisis will slow the pace of the energy transition away from fossil fuels towards nuclear, hydrogen, renewables and storage. The report says that there has been a dramatic shift in policy focus, reprioritising energy security over affordability and environmental sustainability.

But what role does green energy have in navigating the current energy crisis? Is it a luxury that can’t be afforded during turbulent times? Or could it be the solution to our dependence on fossil fuels, sheltering us from geopolitical trouble?

Whilst the rise in electricity prices was due in part to lower than average wind generation, countries with a larger production of wind and solar electricity – such as the U.S. – have managed to avoid an electricity crisis. Countries such as Singapore, on the other hand, which derives only 1% of its total electricity from wind and solar, saw its wholesale electricity prices rise six times in November 2021.

It stands to reason, then, that greater investment in renewable energy can help to reduce reliance on fossil fuel energy and electricity. Unfortunately, the knee-jerk reaction is to focus on conserving as much fossil fuel reserves as possible, and to turn away from renewables. But diversified resources would ensure less reliance on fossil fuel supplies, making those countries less vulnerable to geopolitical challenges such as the current Russia-Ukraine crisis. Indeed, the current energy crisis has only served to highlight our worrying dependence on fossil fuels, and it is a shame that it has taken such unfortunate circumstances for a closer assessment of the current energy landscape.

The IEA conducted an analysis in May 2021 suggesting that greater investment in renewables, clean energy and clean technologies could help reduce demand for fossil fuels. They predict that, to reach net zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion. Much of the anticipated clean energy innovations are still at demonstration or prototype phase, and will need to be brought to market soon, to meet net zero targets.

Expansion of renewables deployment requires zero fuel cost – the costs are the installation and operation costs. With the correct market mechanisms, energy prices could be stabilised easily. Onshore and offshore wind, solar and hydropower could deliver around a third of the cost of generating electricity using gas. This could lower the UK’s electricity bill by around £8.9 billion annually.

The situation on the ground though, particularly for small and medium sized businesses, is much more immediate. With the energy crisis turning into a cost-of-living crisis in the UK, and the very real possibility of an economic recession, businesses are desperate to stay afloat and keep their energy costs down. Renewable energy is, unfortunately, less of a concern under the circumstances. But you should take into consideration the fact that energy efficiency options and carbon compliance could go some way towards minimising and controlling your costs.

How can EIC help clients with their energy contracts during the crisis?

At EIC, we understand the unprecedented pressures that businesses are facing, as the energy crisis takes hold. We know that our clients on fixed term contracts are currently looking for alternative ways to procure energy. Many who may have previously considered it too risky, are now looking to flexible procurement as an alternative. But suppliers are now being more selective regarding the type of client they take on to a flexible contract. Energy volume requirements, the number of sites and credit status all play a part in their choices.

We recommend that you have an initial chat with us, to consider your options and decide how to put an energy strategy in place – so you can ride out the volatile market.

You should also bear in mind that carbon compliance is mandatory, and there can be repercussions if you do not comply, including financial penalties and loss of reputation. So it is always a good idea to take steps towards best practice in carbon compliance, as soon as possible.

Finding the best available option is a time consuming and specialised process. We make use of our specialised skill set, and years of experience, to manage your energy procurement during this turbulent time. We can also search for the best green deals, and help you to meet your carbon compliance requirements, so you can focus on your business.

Get in touch today to find out more about our energy procurement and trusted compliance services.

The post Energy security a key concern in Europe, and green energy will pay the price appeared first on EIC.

In addition, the UK government recently released the outcome of its ESOS consultation. The aim of the consultation was to raise the quality of ESOS audits, and ensure that they are consistent with net zero commitments.

In light of this, we decided to take a look at the changes to the compliance regime, and why it pays to get ahead of schedule.

The consultation focused on four core options: improving the quality of ESOS audits by strengthening minimum standards and making ESOS more standardised, looking at the role of lead assessors, how ESOS can address the net zero challenge, and public disclosure of ESOS data to encourage uptake of ESOS recommendations.

Read on to find out more…

What are the changes?

1. There will be a standardised template for participants to include summary information, such as organisational structure, energy consumption and outlining the route to compliance.

2. The de minimus is now 5% of total energy consumption (previously it was 10%). The de minimus is the percentage amount of your total energy consumption that can be excluded from your reporting. This is likely to bring more activities within the scope of reporting, which could lead to more energy savings.

3. Clearer guidance on the requirements around site sampling, including clearer guidance on recommended minimum sampling levels for both number of sites sampled and percentage of total energy consumption sampled.

4. Collection of additional data for compliance monitoring and enforcement.

5. The addition of an overall energy intensity metric within the overview section of the report – kWh/m2 for buildings, kWh/unit out for industry and kWh/miles for transport. This also complements existing requirements under SECR and would facilitate comparison between performance in different phases.

6. Requirement to share ESOS reports with subsidiaries.

7. ESOS reports will need to provide more information on the next steps for implementing recommendations.

8. Targets or action plans must be set following the Phase 3 compliance deadline – and they will be required to report against these in Phase 4.

9. There will be an increased penalty for non-compliance – an initial penalty of up to £50k and an additional £500 per day until the company complies.

10. From Phase 4 onwards the ESOS balance sheet and turnover thresholds will align with SECR (250 employees, or a balance sheet of £18 million or a turnover of £36 million)

The Environment Agency will also be working with ESOS professional bodies, to identify how further changes could be made to improve the quality of ESOS audits in Phase 3. This is likely to be through active monitoring of lead assessors’ work.

What does this mean for you?

While there are several changes to the compliance requirements, it is unlikely that this will require revisiting site audits that already meet the current ESOS requirements. However, businesses will be required to audit additional sites, in light of the changes to the de minimis.

Participants may also need to implement a net zero element to their audits and the government response to the consultation is that they will develop a methodology for a net zero ESOS assessment. The Department for Business, Energy and Industrial Strategy (BEIS) is currently working with the British Standards Institute (BSI) on the production of a new net zero audit standard, to facilitate this.

Participants can also implement other Phase 4 changes on a voluntary basis, in Phase 3.

What can you do to prepare?

During Phase 1, more than 40% of businesses were still not compliant, four months after the deadline. If this were to happen again, in excess of 2,800 firms would be fined – and suppliers would be forced to raise their prices again. So, it is essential that businesses that wish to comply do so as soon as possible.

The first step towards assessing your carbon footprint is to carry out an energy audit. Energy audits assess a business’s total consumption – spanning buildings, industrial processes and transport usage. You can pinpoint areas of high energy usage, and your business could make significant energy savings as a result.

We recommend that you:

• Review your business structure and understand any anticipated changes.
• Review your portfolio and ensure that you have a clear view of all UK responsibilities, including sites where you are a tenant, or where you have operational control.
• Choose your ESOS compliance representatives – as a minimum, this must include a primary contact and a Company Director for sign-off.

If you have any questions about your compliance, please contact your dedicated team or alternatively contact esos@eic.co.uk and a member of the Carbon team will get back to you.

Where does EIC come in?

Our carbon team has extensive experience with complex compliance legislation and we are dedicated to helping you reach deadlines, efficiently and effectively. Our Lead Assessors and highly trained Auditors are on hand to assist you throughout your compliance process.

We have assisted hundreds of clients with their ESOS journey, identifying 4.65 million tonnes worth of CO2 savings. As a result, our clients have avoided approximately £80 million in fines during phases 1 and 2.

You are busy balancing other tasks and responsibilities, and we know that compliance schemes such as ESOS can seem like a hassle. Here at EIC, we can help turn that obligation into an opportunity for you.

Get in touch to find out how we can help you start your compliance journey.

The post ESOS Phase 3 – how will the changes affect you? appeared first on EIC.

Last month our EIC experts, John Palmer (Director of Flexible Procurement) and John Dawson (Energy Trade and Market Intelligence Manager) spoke with Sumit Bose from Future Net Zero. They discussed the current events shaping the energy procurement landscape and tips on how to protect your business in a volatile market.

So, what are the best ways to future-proof your business against rising energy prices?

What can you do now?

Before you look into procurement or switching to a different contract, you should first assess your business’s current situation and how it can be improved. For example, are there any areas of your business that can reduce consumption? Can you generate your own energy on-site?

By not prioritising areas such as accurate data and energy billing management, businesses could face substantially higher, and unnecessary costs. While checking for invoice inaccuracies is essential in being efficient and financial savings, many customers simply do not have the time or resources to spot and resolve errors.

EIC expert John Palmer also pointed out that accurate billing is essential. ‘Another thing to look at is invoicing – are you actually being invoiced correctly for your energy?’ he said. ‘It’s amazing how often you find there are problems with energy invoicing, and certainly our bill validation team have found quite significant cost savings as a result of invoicing errors that have been discovered.’

At EIC, our data solutions and intelligent bureau team provide full invoice checking and bill validation for clients. Each month, we will provide you with a full analysis of your bills. Highlighting any errors, along with the actions we have taken with your energy supplier to resolve these errors. Get in touch to find out more about our bill validation services.

Buy smart

With another year of triads ahead, businesses have the choice to be flexible. Planning for long-term costs and budget forecasting is advisable, particularly when considering aspects such as onsite generation and the payback for energy efficiency projects. However, it can be hard to calculate various rates and charges in relation to a business’s specific budget.

John Dawson spoke about this topic in our recent webinar. He explained: ‘Long-term forecast reports are something that EIC can provide. Also looking at whether you can benefit from asset optimisation and demand-side response schemes, again if you’ve got that ability to be flexible with your demand then you might well be able to save some money or even make an income from those kinds of schemes.’

Accurate budgeting forecasting is especially helpful during these times, where volatile energy markets are very apparent. By building up a realistic and sustainable budget cost, businesses are able to plan further ahead and develop their future strategies more efficiently.

Decide on fixed or flexible

Deciding between a fixed or flexible contract can be difficult. It is advisable to weigh up your desire for certainty, versus the option of flexibility when procuring energy in the fluctuating markets. While a fixed contract works better for a business that wants certainty that their rates will not falter, flexible contracts allow businesses with significant costs to warrant a more sophisticated solution – giving them more fluidity.

Understanding what kind of contract, on what terms, and the timescale are all very important considerations for a business. At EIC, our dedicated energy procurement support team are on hand to manage your utility supplier relationships and ensure accurate and timely consumption data. On which you can base your contract decisions.

John Palmer went on to say that ‘in terms of the way you procure, it’s got to be right for your organisation. If you need absolute budget certainty, a fixed contract probably still is the way to go – it’s about timing when you actually fix that contract. If you’re looking at flexible contracts it’s about understanding what you’re trying to achieve with that contract and getting the right risk management strategy to give you the best opportunity to get what you need out of it.’

Where does EIC come in?

Reducing your energy consumption is a simple and effective solution to reducing costs – if you know how. Finding simple ways around constantly rising prices can often be confusing and time-consuming. But it doesn’t have to be.

At EIC, our goal is to help companies navigate the best routes for themselves and their business plan. We recognise that while there are many reasons as to why energy prices are rising, we can help our clients return their business strategies to normal.

We have a range of guides on topics such as procurement, energy management, fixed and flexible contracts, and many others that can help you to kickstart your journey to a more efficient and cost-effective future. Get in touch today to find out more.

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New UK laws will require charge points to respond to periods of high demand by slowing or delaying charging sessions. These new rules will leave drivers and vehicle owners in charge, but steer them towards a future that is significantly more sustainable.

But how will these regulations change the world of EVs, and how will this impact UK drivers and businesses?

The new regulations

The Electric Vehicles (Smart Charge Points) Regulations 2021 requires all EV chargers that are sold for domestic or workplace use across the UK, to be pre-configured. This is to encourage smarter charging behaviours amongst drivers and vehicle owners.

Chargers sold after June 30th 2022 must now have smart functionality. This will encourage drivers to charge their EVs at a time when there is less demand on the electricity grid, or when there is an abundance of renewable energy available. This should reduce the strain on the National Grid.

These functions will come pre-configured on the charger, but owners remain in control with the ability to adjust chargers to their preferred settings. The Department for Transport will review progress after the launch, informing a second phase of regulations due by the end of 2025. Later in the year they will also introduce new cyber security requirements to further protect the charger and user data.

What does this mean for you?

With twice as many plug-in hybrid and electric vehicles on our roads in June 2021 compared to the end of 2019, it’s clear that the country needs to adjust to the growing popularity of EVs. But many may worry about how these adjustments will affect them in the future.

While the new regulations will bring changes for charging plans, peak-time charging will not be banned. Owners will have the option to override the settings of their charger if the default scheduling does not work for them, but for the majority of people, charging their vehicles off-peak is the smartest and most cost-efficient option.

And if you already have a charger installed at home, you do not need to worry about upgrading it. As long as it was bought before the 1^st July 2022, EV owners will not have to upgrade their charging device.

Where does EIC come in?

It is becoming clearer each day that action must now be taken to protect our environment. And with the government working to make significant movements towards a sustainable future, it is clear that these green plans are being made a priority.

At EIC, we are dedicated to helping our clients make the most of the green energy alternatives on offer. For us to help ourselves, we must help those around us as well. And our green energy solutions, compliance advice, and carbon management plans can be tailored to your business’s needs.

We can also plan and install charge points across your sites. In addition, we also offer advice on converting your current vehicle fleets to electric.

Get in touch today to hear how EIC can assist you in your journey to net zero.

The post Electric vehicles and the new smart charging regulations appeared first on EIC.

In partnership with Future Net Zero

As we face an unprecedented energy crisis, businesses are wondering what to do next with their energy contracts.

On Tuesday 14 June our EIC experts, John Palmer (Director of Flexible Procurement) and John Dawson (Energy Trade and Market Intelligence Manager) spoke with Sumit Bose from Future Net Zero.

They discussed the current events shaping the energy procurement landscape. John Dawson talked through the market movements affecting supply and demand in the gas and electricity markets, as well as concerns around European storage of gas. He also looked at the winter ahead, and the situation surrounding Russian gas supply. He discussed the advantages and disadvantages of reliance on liquefied natural gas, as Europe pivots towards LNG in response to the situation affecting Russian supply.

John Palmer gave advice on how to buy ‘smart’ in the current energy market, and how to reduce costs through smart energy procurement. He discussed the differences between fixed and flexible procurement options and why flexible procurement may offer advantages, in a volatile market.

You can view the full-length webinar here: 

Alternatively, you can read the transcript below:

EIC webinar 14 June 2022

SB: Welcome to this future net zero webinar with EIC. We’re expecting lots of questions and of course, it’s a session that we’re all really interested in. What’s going on in the markets, how are you going to cope with what’s happening right now? Nearly everyone I’ve spoken to have never known anything like it, so how do you navigate it?

Today we’re joined by John Palmer and John Dawson from EIC.

JP: Morning everyone, I’m John Palmer and I’m Director of Flexible Procurement at EIC. I look after our flex team and work very closely with John (Dawson) who’s on the trading side of things.

SB: And John Dawson, a little bit about yourself?

JD: I’m the other John, so I’m the trading and market intelligence manager. I look after the trading team that manages flex contracts and market intelligence, following up the markets, writing up reports and letting you know what’s going on.

SB: I think you’re ahead of the markets, John. We have two poll questions as well, so you’ll get a chance to vote to do that. To end with, both our Johns will be happy to take questions offline so once you’ve heard the presentations you can email the guys, we’ll put their emails out. Without further ado, let me hand over to John Palmer who will take you through the slides.

JP: We’re obviously going to talk about the current impact on the energy market and procurement, so John will be talking about the markets, and I will be talking about what you can do next, and how you can procure. You’ve heard about who we are, so that’s just a bit of extra background for you. So we’ll jump straight onto the agenda. So, John’s going to talk about what’s going on in the market and the million dollar question of what’s going to happen next and I will then be talking about how we can help you to buy smart and what your options really could be in current market conditions, and then we’ve got time for questions at the end.

We have a poll today, Sumit if you wouldn’t mind launching the first poll and we’re going to be looking at – for your next energy contracts, are you currently considering fixed or flexible contract options?

SB: So the poll is up there, just go through it as you wish, vote now.

JP: Thank you very much. And I will hand over to John Dawson who’s going to talk about the markets.

JD: So for the next few slides, we’re going to go through the fundamentals of the market, both looking at demand and supply. We’re going to look at history and what’s currently going on, and possibly lay out a few scenarios of what could come. There’s quite a bit of information here in graphs and I’m hoping I can at least draw your eye to some of the aspects that I’m talking about.

UK Gas Demand

JD: Without further ado, let’s look at UK gas demand. So the graph you’re looking at, is looking at demand over the last two years. Pretty much from April 2020 when we were in covid lockdowns. This demand graph has several segments to it, there’s industrial demand, medium storage demand, exports through pipelines such as Moffat to Ireland, LDZ demand which has a very large domestic element to that, which is the dark blue portion there and we’ve got gas for power generation, which is the green coloured bit there. And we’ve got Interconnector Exports, these are demand on the grid when gas is being exported to Europe. Mainly through two pipelines, BBL pipeline to Holland and the interconnector pipeline to Belgium. We’ve overlayed on this the front month price. So on the left we’ve got the spend in m cubic metres and on the right we’ve got the price in pence per therm.

I want to draw your eyes towards the difference between the last two winters we’ve had. Winter ’20 was a much more prolonged colder spells whilst if you look at October ’20 and October ’21 there is slight differences there where there was more heating demand, more LDZ demand over that period. And in the latter part of winter and going into April ’21, compared to this April, this April the demand was less so. So overall demand is a very difficult thing to predict, there’s long-term forecasts weather forecasts which come out towards the back end of summer but they’re not entirely going to be accurate all the time. There will be some guidance given by analysts but what will actually outturn is almost anybody’s guess at times.

And given also our generation mix, wind is a very important proponent in that weather forecast. As you can see, as we went into last winter the prices were definitely on a really strong recovery off the covid lows. We’ve had three peaks there based on different things. The last peak is off of the Russia invading Ukraine and sanctions that followed thereafter. And demand in itself was muted as in respect of what the price was doing. Price was moving based on fear of supply, so it wasn’t a true reflection of what the demand was at the time. We can see that prices have come down, demand has reduced as we go into the summer period.

But again what you can notice here is the difference between the start of this Q2 versus what we had in Q2 2021. So if you look at just to the right of April 2022 we’ve got quite a lot of interconnector exports and that is elevating demand this summer relative to last summer. So what we’ve got here is a lot of LNG coming to the UK and a lot of gas supply and in effect what that has done is helped the front month to come off from much of the peaks that we’ve seen through the winter. So that is depressing the UK price and it’s just as a consequence of a lot of supply coming to us. And then a lot of that supply is making its way to the continent.

Peak electricity demand

JD: If we look at power demand, here we’re showing peak power demand over the last four or five years. Here you can see possibly the effect of covid shutdown. The yellow line shows the impact that shutdown had on overall demand, peak demand in this case. But what we wanted to show here is that there is almost a trend of weakening or reducing peak demand, year on year. This could be on the back of efficiencies, cost reductions, people taking advantage of triads whilst it’s still around and it’s possibly going to be an ongoing trend. And efficiencies is something that might be mentioned quite a lot and ways of reducing costs might have a direct impact on how this peak demand starts to look or continues to look over the years to come.

Demand

JD: So what will the current situation that we find ourselves in do to demand? We believe the higher prices bring about demand destruction. We are seeing, if you could look at the first slide, the industrial demand component in that graph has reduced, certainly in this last year. We are seeing that there are certain industries that are directly impacted by the cost of gas, as an input cost for production of things like fertiliser. And these industries are having to reduce output and therefore demand, because of the high cost. And it’s almost, in that situation where it’s not necessarily just in the UK as well, we’re seeing this across the globe. We’ve got places like in Pakistan and India where we’re having issues with procuring LNG and they are having power issues because of the cost of gas, they’re struggling to get product and it’s affecting their industry as well. And that’s obviously going to bring about more demand destruction.

Again on the demand picture we’re seeing massive exports to Europe so that’s increasing our summer demand as it were, relative to years past. We’re seeing very strong demand from storage – there is a need for security of supply as it were, and it seems to be more urgent going into this particular winter given the circumstances surrounding the market at the moment, given what’s going on with Russia. For winter demand it’s always an uncertainty. We never know what kind of weather we’ll get but the market is always trying to prepare for the worst and then see what the outcome is on a day by day basis and find out whether it’s been priced to high or priced too low and then make the adjustment through the winter.

And as I mentioned there’s energy efficiencies, I think those are going to be fast tracked and also things like onsite generation. That’s going to have an impact on the power demand. So these are just some of the things that will affect demand but it’s very difficult to calculate what that would look like – it’s an ongoing exercise as we get more and more data.

Supply

JD: So now we’ll look at the supply fundamentals. The bigger picture here – there’s a decline in domestic production. This would be UK North Sea’s own production, a Norwegian production, there’s a finite amount of what’s there and it would require more exploration and money to try to extract more from existing sites or other sites that haven’t yet been explored. We’ve got the likes of Groningen gas field in the Netherlands that is shutting down – it’s debateable whether they will or not, the Dutch government is holding its ground, it’s more of a political question perhaps on that one. It’s a massive field that would alleviate to some degree a lot of supply constraints coming from Russian supply. It’s an important field but given the seismic impacts that it’s brought to the region as a result of extraction of gas from there, the Dutch government had made that decision that there’s not going to be much more to be taken from there and its cost those who’ve put money into that project quite a bit of money.

Because of declining production, the UK is quite reliant on imports from different sources – the pipeline supply from Norway, imports that come in from BBL pipeline or the interconnector pipeline from Europe, as and when we price above Europe.

And we’re also quite reliant on liquefied natural gas. That comes from sources such as Qatar, the US, and more recently from Peru and we’ve got west coast of Africa and also Russian energy supply. Europe, and specifically Germany, is very reliant on imports from Russia. And without much of an increase in domestic production we’ll just have to rely on imports and as such it kind of brings everyone closer and makes the world a bit smaller. And liquefied natural gas has made that the case.

Things that can happen – in Japan, if you can recollect what happened after Fukushima, a lot of liquefied natural gas made its way to Japan and made them the largest LNG buyer in the world as a result, because they had to switch off all of their nuclear generation. And everybody else had to compete against that. More production came on and alleviated some of that shortfall, but any issues – we’ve just seen a fire break out at an LNG terminal in Texas in the US, that’s going to have ripple effects across the market both for Europe and Asia as there is a reduction in supply. As everybody is reliant on these imports and LNG makes it a smaller and much more connected market, things that happen in different pockets of the world will have an impact on price that we pay.

There’s also the share of renewables, we know that there’s an expected increase in the coming years, quite a lot of wind generation is anticipated and this will have an impact again on the relationship, certainly for the UK between gas generation that we have versus the load of wind generation that’s on the grid. We know there’s that story where if the wind doesn’t blow what happens? Or if there’s excess wind, so the relationship between those two and possibly something that binds them would be battery, some way of storing that electricity would help manage that particular situation. It could have quite an impact on the market and on price, if you could store the power for longer and if you could take it at the times when it’s, to smoothen that, when it’s not needed as it’s being generated but being able to use it again at peak times, if that can be smoothened out it would definitely have an impact on the market and on prices.

For the UK, we’re very reliant on gas for power generation. That share between renewables and gas will be a challenge as we go forward. And on Russian supply we know that some countries in Europe have decided to end ties and most of them have their contracts coming towards an end. It is estimated that around 50% of the volume that comes into Europe has ceased in that respect.

We do know that there hasn’t been a reduction in stream one flows, that would imply that Northern Europe countries, more specifically Germany, must have acquiesced to pay in roubles as we haven’t seen any shortfall in supply, we haven’t seen any cut offs. So it looks like Russia is commoditising its currency where it can and it has done so now with gas.

We don’t know if there is going to be future EU sanctions, the longer the situation between Russia and Ukraine pans out there is always that prospect that the drums are going to beat louder that there should be sanctions on gas as well, as there has been on coal and, to a large degree, oil. Will there be more pressure that sanctions on gas are passed through and what does that mean as well? Substituting that gas supply in its entirety doesn’t seem possible in the short to medium-term, if it was cut off, so that would be a risk for the market.

Going into this winter

JD: So as we go into this winter it’s all a question about storage, about LNG and this Russian gas supply. So European storage is important from a global perspective as well. We did see it during the Covid shutdown, it took a long time for liquefied natural gas to adjust to the drop in demand globally and Europe is the only place that has the infrastructure, storage, and the capacity to absorb a lot of this excess supply relative to the demand, and was able to take that.

And for the UK we’re quite reliant on that security insurance policy because we haven’t got large storage sites, again there’s talks of maybe that turning around. And so when we actually do need to meet elevated demand in the winter, we have to attract that gas from Europe out of their storage to come to us, if the LNG that we’re getting plus pipeline supply isn’t sufficient to meet that demand. We’re seeing mandates by some governments within the EU, with some EU countries mandating that storage has to be filled up to certain levels. And this is a change, specifically for Germany, given what happened at the start of this winter that just passed, which I’ll get to later.

LNG supply to the UK reached record amounts in April. In response to the higher prices we did see quite a lot of LNG come to the UK, and a lot of that excess supply can’t be held in the UK, and that’s why we’re seeing it sent to Europe. As mentioned with Russian gas supply we’re not too sure yet, it’s always going to be hanging over the market as we go into the winter whether there’s any escalation, or de-escalation that would be price supportive; de-escalation would certainly help prices to come lower.

We know Nordstream 2 had ceased and Gazprom pulling out of its Gazprom Germania entity has left Germany in a tough spot as it has to fill up storage there at a much more expensive rate. There’s possibilities that the German government will have to help as far as costs there are concerned.

UK Gas Supply

JD: So if we look at gas supply over the same periods as we’ve looked in the previous graphs, North Sea supply. We’ve got Langeled gas coming from Norway, we’ve got LNG as a grey bit, storage withdrawals that help to top up and European imports from the two pipelines BPL and interconnector. And again we’ve overlaid the front month over the course of this time period.

We know North Sea supplies are decreasing so we’re ever more reliant on those imports through Langled or from Norway and liquefied natural gas. If we look at the two winters again we can see the grey portion there’s a massive increase in that grey portion, winter on winter. So last winter was as a result of the higher pricing. UK and European prices were competing with Asia, as a result we pulled a lot more product into the UK and Europe, at the expense of Asia and other countries like Pakistan and India.

This excess has come, if you look at the very right hand side of the very last peak, demand was quite deflated and we had a lot of LNG come in which has helped a lot of the UK storage to start filling up quite quickly. We certainly saw that in April when overall demand was weaker. There is pressure on the summer pricing because of the excess amount of supply, relative to what we can actually take and send to Europe. But the question will be, what’s that going to look like going into winter?

European Storage

JD: This (graph) is showing European storage over October year. If we start at the very left we can see the red line was showing what October 2021 storage levels looked like. It was well below average and this was as a result of Gazprom-owned sites in Germany not necessarily filling up over the last summer prior to winter. Which is why the German government has now mandated that storage get filled up but Gazprom has now pulled out of that venture. So it’s been left to the entity that’s there now, that is backed by the German government to try to ensure that the storage sites there try and fill up. But again they’re having to buy at market rate right now so it’s quite a cost difference between getting that directly from Russia.

Over the course of the winter, as storage was being drawn and the red line drops, there were worries over how much was being used and what the rest of Q1 ’22 was going to be like but we did have quite a mild February and a relatively mild March. But with pricing so high relative to Asia that has attracted a lot of supply.

And noting that Russian supply hasn’t necessarily been disrupted up until a couple of weeks ago. And specifically those wanting contracts in Northern Europe, all of that volume is helping the storage picture look a lot better than where we were at the end of March. With a lot of concern about how that was going to fill up. This rate of injection can’t necessarily be maintained. There’s going to be maintenance over the course of the summer for producers that’s going to affect overall supply, so that’s not necessarily going to be as strong as it is currently.

Where we end up is more the question. Will there still be a deficit? Will there be an excess relative to the average?  Will we get to a place where the market feels comfortable that there is that security to rely on?

Average UK Electricity Generation

JD: When we look at UK generation, power generation here. We’ve got imports from Europe, so if you look at the pink section that is quite small going into this summer. So Europe’s power prices are a lot higher so we are actually exporting power to Europe. The other thing you can notice here is that wind generation tends to be quite strong over the winter periods, relative to the summer, because of the weather patterns that we do get. And over last winter wind generation was quite strong in the February period. It was quite mild and windy at the same time which is what helped overall demand to be quite weak. Again, going into this winter it’s what kind of wind speeds are we going to get. It doesn’t help when we have cold and very low wind situations because that’s a higher load on the system. Whereas if we do have a mild and windy winter then it does help reduce that demand quite a bit.

Market Prices

JD: We’ll go into market prices quite quickly.

Gas seasons

JD: We’re looking at forward prices here. The winter ‘22 contract as we can see has a massive premium to future prices, so the market is basically in backwardation here. But pricing higher in the situation right now relative to the future. So the market is still quite concerned about supply for the coming winter. It is interesting how the 230p level seems to be holding support. But also what is interesting here is that the backend has been moving up as well and it’s showing that the market has noticed there’s a pivot, by Europe moving away from Russian supply to LNG. So there’s going to be more competition. So for the UK it does bode questions of, we will be competing with another big buyer in the market in the years to come as things pivot in that direction.

So the trend is definitely up. The summer ’23, winter ’23, summer ’24, all that has been relatively sideways since March. That March peak, it does look vulnerable to another push up. And the winter might bring more surprises, or the journey to winter between now and then might bring more surprises that might help this market keep staying elevated. But the positives to take away from here is that the storage is looking good, LNG is looking good.

We’re relatively pricing in competition with Asia this time round so we should be getting more LNG going into the winter but if the Asian demand picks up quite strongly we will have to stay close with that to ensure we’re also receiving supply.

Power seasons

JD: And it’s kind of the same with the power, where the backend as well is moving up. The winter has a large premium over the backend. We’ve been very sideways since the March drop and it looks like the market is kind of waiting to see what’s going to happen as we get into winter. So there’s a consensus between buyers and sellers around the 240 mark. There’s going to be a catalyst at some point that’s going to either cause prices to break higher or alleviate some of the risk premium in the market and cause the price to come down.

There’s various scenarios as to what that will bring and Russian supply being one. Economic impacts as well – we know that there’s talk of a recession that’s building up. The higher price is going to cause demand destruction as well. We might see a change in behaviour from ourselves when we’re dealing with our thermostats over the winter, so there is likely to be some catalyst that will help the prices to come lower. At this point in time, we don’t have any additional data to say yes that is definitely what will happen but there is a consensus in the market at this point in time.

Game changers

JD: Very quickly, game changers. Some of them are more close, will have an impact in the short-term, some in the medium-term, some over the very long-term. The pivot by Europe to LNG is a big one. It does change the dynamics in the LNG market. It does mean more competition. LNG as a product, it’s a ‘good to have’ but its responsiveness as well is a problem. Prices will tend to go up, you can’t turn on a tap to increase the supply when it’s needed right there and then. Instead three London buses come at once when you’re waiting for one. You’ll just get an influx of LNG come in but its responsiveness to when it’s needed is an issue.

But equally the US LNG terminals need to be built and this will be three to four year time horizon before a lot more LNG can come from the US. UK and European production as we mentioned depends on whether more supply can be tapped, probably goes to point 6, government incentives – will there be more of a tap into production there? Certainly in the UK storage is a big thing, does rough storage come back? Does more storage get built to help alleviate some of the concerns for winter?

Nuclear generation, we know France is having issues at the moment, do those units come back quicker ahead of winter? We know Germany changed its policy on nuclear, as did Japan after Fukushima. Does the cost of gas remain so high that it starts to change some of the policy around these? If more nuclear generation was to come on, it would certainly alleviate the demand for gas, and so that’s where it locks into point 5 where there’s alternatives.

Coal generation in Europe is a lot cheaper and it’s staying on for as long as possible. Some countries are trying to leave things on for as long as they can. Just from a cost perspective. Again, that’s a demand destruction on the gas side. So these are just some of the things that could impact price going forward. Some will be short-term to come into effect, others will take a longer time before they come into effect.

Sorry that was a rush but I’ll pass onto John Palmer to finish the presentation. Thank you for your time.

How to buy ‘smart’

Non-commodity charges

JP: Brilliant, thanks John. So I’ll talk a bit about how you can buy perhaps differently, or look at how you’re buying to try and reduce costs. It’s worth highlighting that gas and electricity costs are made up of both the wholesale and non-commodity charges. That’s a bigger element for electricity so the graph here gives you an idea of how the wholesale, which is the blue, plays into that total cost. And when you’re buying it’s really looking at how you can attack both the commodity and non-commodity side of that cost.

Before looking at procurement options

JP: First thing to say really, before looking at procurement, can you reduce energy consumption? That’s going to be the biggest win for you. Can you generate your own energy on-site? Because again, if you’re generating your own electricity, you’re avoiding those non-commodity charges through actually importing energy to your site.

Another thing to look at is invoicing – are you actually being invoiced correctly for your energy? It’s amazing how often you find there are problems with energy invoicing, and certainly our bill validation team have found quite significant cost savings as a result of invoicing errors that have been discovered.

How to buy ‘smart’

JP: In terms of buying, how can you buy smart? Purchasing energy effectively, so understanding what you need and what kind of contract might work best for you – is it a fixed contract, a flexible contract? Should you be fixing or passing through your non-commodity charges. Those increasing non-commodity charges will result in higher costs unless you can mitigate them.

There is another year of triads so if you can be flexible with your demand that might be an opportunity to save some money if you’ve got a pass-through non-commodity charge.

Obviously having an idea of long-term costs and long-term budget forecasting is always helpful, particularly when you’re looking at things like onsite generation and the payback for things like energy efficiency projects. So long-term forecast reports, that’s something that EIC can provide. Also looking at whether you can benefit from asset optimisation and demand-side response schemes, again if you’ve got that ability to be flexible with your demand then you might well be able to save some money or even make an income from those kinds of schemes.

Fixed or flexible?

JP: Fixed or flexible contracts, so depending on your consumption, I think it’s key to understand whether a fixed or flexible contract is the right thing for you. Fixed contracts is a simple option, all of the energy is bought at the time that you actually signed the contract. So you’ve got price certainty and budget certainty for the duration of the contract. But in current conditions, with market prices quite high, there isn’t an opportunity to improve the price if the market moves lower during your contract.

Whereas with the flexible contract, you can buy the energy and sell the energy right up to the point that you actually consume it. So you do have that opportunity to improve your price if the market does move lower. Flexible contracts are more complicated, they involve risk management which can be quite a scary concept for people and certainly when discussing that internally it’s probably a harder sell sometimes for organisations, particularly when moving from the certainty of a fixed price contract. But a trading strategy that goes alongside the flexible contract can be used to provide that high level of budget certainty but still give you some opportunity to improve your price.

So really looking at fixed or flex, the grey dashed line here is the point of the contract renewal and it’s really looking at what might happen over time. So in that market with prices rising at the start, falling just before the contract renewal and then rising again afterwards, at what point do you actually fix your contract? Do you panic at the start and fix it when prices are very high? Do you wait and take a measured approach to where you actually buy? Do you get a bit lucky and end up buying at a relatively good time?

It’s difficult with a fixed contract to know whether you’ve made a good decision until you look back. Whereas with the flexible contract, you’ve got that opportunity to buy at different times and even sell back to try and manage that cost. So if you did panic at the start and buy, you have that option of starting to sell back when prices fall to improve your position. So that’s why a flexible contract will certainly give you more opportunity in terms of the wholesale element of your contract.

I think in terms of the way you procure, it’s got to be right for your organisation. If you need absolute budget certainty, a fixed contract probably still is the way to go – it’s about timing when you actually fix that contract. If you’re looking at flexible contracts it’s about understanding what you’re trying to achieve with that contract and getting the right risk management strategy to give you the best opportunity to get what you need out of it. That might be getting something that’s more market reflective or more aggressive in the current market to try and drive down costs.

It might be about having budget certainty with at least a bit of an opportunity to make some savings. So it’s really a decision to take around what type of contract works for you as an organisation. But it is important to understand that with a flexible contract there is always the option to fix everything out and sit and wait. Whereas with a fixed contract, once you’ve done that, you’re stuck with it.

You can look at our website, eic.co.uk, and there’s a lot of information on procurement as well as carbon and energy efficiency on there so there might be some useful resources. And in particular, we’ve got some free guides for you, so smart procurement and the A-Z of your flexible bills could be useful when you’re thinking about fixed or flexible contracts and particularly the complexity of flexible contracts, trying to make that perhaps a little bit less scary.

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Without a clear plan to manage your energy bills, you could be at risk of rising prices. So, it is important that you secure your upcoming contract renewals as quickly as possible.

Let’s take a look at why you should secure your renewals sooner rather than later.

Finding flexibility

Deciding when to renew can be confusing. You will also need to consider various contractual terms, which can be time-consuming. To fully understand the best options for your business, you must first understand your current energy usage and areas of high energy consumption throughout your sites. Factors such as the contract length, fee, and rate should also be taken into consideration.

Securing a fixed contract at the wrong time could mean that your business pays more for its energy, compared to the current market rate. This could lead to you falling behind those competitors that chose to renew their energy contracts at a different point in time, or decided to be more flexible. A flexible energy contract allows your energy bills to mirror the peaks and troughs of the energy market. With a flexible contract, you can also spread out the purchasing points – giving you a wider time frame to spread out any risks of fluctuations in the market.

Avoiding high prices

It’s no secret that energy prices are sky rocketing. Many homes and businesses are now slipping into energy poverty, due to colossal price hikes. Choosing the wrong contract could expose your business to these high price risks.

Looking at the renewal options, and obtaining quotes as far ahead as possible, can help to reduce this risk. While waiting it out until prices go down may seem appealing, it is not advised. Putting in place a consistent and reliable plan of action will free up your time and finances – so your business can focus on other priorities.

Looking ahead

The energy market can be incredibly hard to predict, so securing the right contract is vital. And flexible procurement allows for long-term planning, which can save you time later down the line. For example, putting in place a long-term flexible contract means that you will spend less time assessing the current energy market, while your flexible contract continues – and our experts can handle the price fluctuations for you.

But good risk management is still vital when deciding on the best time to renew your contract. If you are not due for renewal yet then you have time to think about the most advantageous options for your business.

How can EIC help?

Understanding and choosing the best energy solutions for your business can be confusing and tiresome. There are many factors to take into consideration when deciding which contract is right for you – especially in the current energy climate.

EIC has expertise in flexible energy procurement, which can help reduce your costs. Flexible procurement also offers adaptability, in an ever-changing commercial landscape. Budget certainty will become key to your company’s survival, and flexibility will become crucial.

EIC can scan the energy markets to find a flexible energy contract for you, helping you to make savings. You can count on our expert traders, who constantly monitor the markets to find the best prices. We look to engage suppliers on the basis of their contract features and functionality, transparency around the price-fixing mechanism, and the supplier’s account management fee.

Get in touch today to find out more about how EIC can help you find the right contract for you.

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The term ‘non-commodity’ costs has worked itself into many conversations throughout the past few years, within the energy industry. But understanding what non-commodity costs are, and how they could impact you and your business can be difficult to understand.

So, we have broken it down for you. Here is our guide to the different types of non-commodity costs.

What are non-commodity costs?

Essentially, the amount we pay for energy includes three different expenses. The first, is the wholesale price of the actual amount of power we use (the commodity). Secondly, we have the cost of transmission and distribution across the network. And finally, a variety of government levy and taxes. The energy companies pay these fees, and pass the cost onto their customers.

In 2011, non-commodity costs accounted for around 36% of energy prices. In 2022 this has already risen to around 70% and is predicted to reach 80% over the next decade and continue to ascend.

Transmission and distribution costs

Each supplier incurs expenses to run and maintain the power network. These vary from provider to provider, and largely depend on the type of power plant. For example, solar and wind generators are less consistent in output, as compared with gas or nuclear power. With a move towards renewable energy, the cost of balancing the system is likely to increase. The main expenses are:

Government levy and taxes

These taxes fund various government initiatives and green energy programs.

Controlling your expenses

With the increases in non-commodity costs set to continue, it is important to keep an eye on your bills. Proper monitoring, and tracking monthly changes, will ensure you aren’t overpaying.

With such turbulence in the market, there is less control over the wholesale cost of electricity. What can be controlled, however, is how we use energy. At EIC, we can help you plan your usage around annual Triad periods. This can make a significant difference to your energy bills. Our daily traffic light warnings will help you avoid any unnecessary fluctuations, and keep costs low.

Whether you prefer the stability of a fixed price, or the control of a flexible contract, we can help. Setting up an energy contract can be a long process, especially if you want a good price. We have the experience to negotiate with your provider, to make sure you are not paying more than you should be.

Our service is tailored to your needs. To find out what we can do for your business, get in touch today.

The post Controlling your energy bills: A guide to non-commodity costs appeared first on EIC.

Climate change and net zero targets are at the forefront of the minds of consumers and investors. What this effectively means, is that energy performance is now an operational and commercial priority in building intelligence. Data analytics are crucial for businesses wishing to advance this intelligence.

Let’s take a look at the benefits you can reap from taking control of your data.

Become more efficient

Accessing and understanding data across multiple sites can bring a whole host of benefits. One of the most beneficial advantages is the opportunity to run your business more efficiently.

Efficient energy management can happen anywhere at any time. Energy data and analytics need to be readily available for businesses to obtain the full advantages. Through targeting the data of your sites, you can see where you are using the most energy, when, and for what reason. This makes it easier to identify and remedy areas of waste – making your business more sustainable and future-proofed as a result.

Cut costs

Having quick and easy access to your data is essential for every company. One by-product of becoming more efficient, is the reduction of unnecessary costs. Reducing energy waste in your business automatically reduces any costs attributed to that waste. This frees up money, which can be reinvested in other areas of the business.

Effective data management will help to inform your business decisions, keep your energy costs low and help you to future-proof your sites. Understanding data – not only from your online systems, but also from your bills, for example – can help your business to avoid charges for consumption in peak demand periods, as well as identifying waste usage. Thousands of pounds can be saved through analysing data, as it can identify spikes in wasted energy usage.

Increased transparency

As we move towards a new era of sustainability in business, it is essential for organisations to be as transparent as possible with their clients and potential investors. Transparency about your sustainability efforts can help your business to connect to customers on a deeper level. Offering accountability has been proven to encourage people to opt for certain businesses over their more reserved competitors.

Research has found that 94% of consumers are more likely to be loyal to a brand that is completely transparent. With a consumer market that is focused on sustainability now more than ever, transparency in terms of sustainable goals is key.

Where does EIC come in?

Reducing your energy consumption is a simple and effective solution to reducing costs – if you know how. Finding simple ways around constantly rising prices can often be confusing and time-consuming. But it doesn’t have to be.

At EIC, our goal is to help companies navigate the best routes for themselves and their business plan. We recognise that while there is a broad range of reasons as to why energy prices are rising, we can help our clients return their business strategies to normal.

Get in touch today to find out more. Also, head over to our piece on the changes to the TCR mandates to find out more on how this will affect you.

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Companies must work with the resources available to them, and get their strategies in place now. Not only will this ensure that they are in a strong position for imminent changes, it will also help businesses to navigate changes within the broader ESG landscape.

Let’s take a look at how you can organise your company to align with the new requirements.

What is the TCFD?

The Task Force on Climate-related Disclosures was established in 2015, by the international Financial Stability Board. It is based upon the growing consensus that climate change has immediate effects on economic decisions. Investors are growing more aware of climate-related risks and turning towards those organisations that are planning ahead in this regard.

As part of a package of environmental measures from the government, Chancellor Rishi Sunak announced plans to make the TCFD guidelines mandatory for businesses. This fraction of the green recovery plan aims to bolster the UK’s position as a global leader for green finance.

To that end, the TCFD is a reporting framework with the aim of achieving consistency in terms of the level and quality of climate-related disclosures. Setting a consistent standard will increase transparency and allow for comparability between organisations, in terms of their impact and effects on climate change.

The TCFD reporting framework spans four key areas: governance, strategy, risk management, and metrics and targets. In terms of governance, companies must describe how the board maintains oversight of climate-related risks and opportunities. With regards to strategy, they must identify climate-related risks and opportunities in the short, medium and long-term and how this will impact the organisation’s businesses, strategy and financial planning.

In terms of risk management, companies must demonstrate their processes for identifying and assessing climate-related risks, and how these risks are managed and integrated into their overall risk management. Businesses should also disclose the metrics they have used to assess climate-related risks and opportunities. They should disclose Scope 1, Scope 2 and Scope 3 greenhouse gas emissions and climate-related performance targets.

Know where to start

The mandatory TCFD requirements now apply to large businesses, for accounting periods beginning on or after 6 April 2022.

Starting early is key in implementing TCFDs efficiently and effectively. While points may be altered in the strategy as time goes on, having a roadmap to achieve your TCFD goals within a future business plan is essential in understanding the potential gains, as well as risks. Board members may require training, and communication with stakeholders throughout the process will be key.

Reporting on risk management is also very important when starting out with TCFDs. The starting point is to consider the existing processes within your organisation and build upon these. As well as understanding the tools you already use to help collect and report climate-related information, and consider which additional tools are required.

All information required to meet the disclosure obligations must be included in the company Annual Report and Accounts. Third party information used to assess climate-related risks – such as from data providers – may be included.

Set targets

Identifying targets is a good start when figuring out a strategy. Measuring and reporting on progress, peaks and troughs, can help businesses to understand exactly where they can improve, and how. There are several initiatives that can assist businesses in this regard.

Science Based Targets , as well as industry projects promoting net zero targets for specific sectors, can help businesses to understand exactly how to create ambitious but reachable targets for the future. Emissions must be cut significantly for the UK to reach net zero, by 2050. A ‘science-based’ emissions target stays in line with the scale of reductions required to meet these objectives. These goalposts track progress and give the private sector a clear idea of how quickly they need to reduce their GHG emissions, to prevent the worst impacts of climate change.

You should also consider carrying out a materiality assessment, which will help you to decide which climate-related issues within your organisation are significant enough to report on, and in turn, set targets for. Climate-related targets should be quantifiable and granular, linked to metrics, clearly specified over time and periodically reviewed. They should be understandable and contextualised.

The TCFD recommends using metrics that are ‘decision useful’, clear and understandable, reliable, verifiable and objective, and consistent over time. Categories of metrics include GHG emissions, transition risks (such as credit exposure to carbon-related assets or revenue from coal mining) and physical risks (such as investment in flood zones).

Follow available guidance

Understanding the ins and outs of the TCFD requirements may seem confusing, but there are many forms of guidance that are available to you. The TCFD Hub, BEIS and the FRC have published guidance to help companies with approaches, examples of disclosure and how the mandate interacts with existing requirements. Including SECR and ESOS.

The Department for Business, Energy and Industrial Strategy (BEIS) has recently published guidance for businesses that now need to make TCFD-aligned disclosures. You can access the guidance here.

How can EIC help?

Implementing TCFDs comes with a number of benefits for larger businesses. A major one being that they will help companies to identify and assess the risks posed by climate change. They can then address their structural weaknesses, and implement mitigation and adaptation efforts to future-proof their business. Organisations that do this will have a competitive advantage over those that don’t when it comes to future funding and investments.

At EIC we are experienced in helping clients mitigate climate-related risks. Through our unrivalled energy management services, and cutting-edge technology, we can help you with TCFD compliance. Our aim is to guide you and interpret the legislation, keeping you informed and compliant. From resource efficiency and clean energy, through to your carbon compliance, our goal is to simplify your sustainability journey.

Get in touch today to find out more information on future-proofing your organisation.

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These changes will impact every business differently. So, it is essential that every business understands the effects the new rules will have on their bills, before they enter into their next electricity contract.

Here are some important points you should know about TCR and how it will affect you.

What is the TCR?

The TCR is an Ofgem-led project that assesses how network charges are set and recovered. It was launched to address concerns that the current mechanisms used to recover Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges could lead to inefficient use. It is hoped that the TCR changes will help consumers avoid detrimental effects, and distribute the costs more fairly – particularly for those that consume energy during peak periods.

For customers that are metered half hourly, electricity transmission costs run according to Triads. Triads are the three half-hour settlement periods in the winter with highest system demand. National Grid determines these peaks to set electricity charges, and they are calculated retrospectively in March of each year.

Now Ofgem has introduced new rules, following concerns that the current system distorts the market and is detrimental to businesses of all sizes. It also comes amid concerns that more savvy businesses may try to avoid Triad periods, and not pay their share towards maintaining the grid year-round.

How will this affect you?

Triad periods usually provide larger businesses with an opportunity to make savings through flexibility, by reducing consumption during peak periods. Even those who aren’t able to be flexible in their usage can mitigate the impact of Triads by increasing their energy efficiency. However, under the new system there is less incentive for Triad avoidance and, where it remains, the benefits will be significantly reduced.

TCR changes introduced in April 2022 now mean that non-commodity charges will no longer be based upon peak-time consumption and will instead be based on a standard flat rate. All meters will be sorted into bandings and charges applied to each banding. These bandings will be reviewed every five years.

For some, the TCR will increase their energy costs, as they may fall within a higher banding, but this can be rebalanced within other areas of their budget. But those larger energy users who have not previously consumed energy flexibly and who have been hit with high Triad costs could see significant improvements, and reductions in non-commodity costs.

Where does EIC come in?

Keeping track of your energy usage is important at the best of times, but even more so under current circumstances. With these latest changes to electricity charges, keeping track of your energy costs can seem all the more confusing.

Reducing your energy consumption is a simple and effective solution to reducing costs – if you know how. Finding simple ways around constantly rising prices can often be confusing and time-consuming. But it doesn’t have to be.

At EIC, our goal is to help companies navigate the best routes for themselves and their business plan. We recognise that while there is a broad range of reasons as to why energy prices are rising, we can help our clients return their business strategies to normal.

Get in touch today to find out more. Also, keep your eyes peeled for our upcoming blog about how access to data could help your journey towards energy efficiency.

The post What is the Targeted Charging Review (TCR) and how will it affect you? appeared first on EIC.

The plan is heavily focused on long-term supply-side measures and aims to make the UK’s electricity system 95% low carbon by 2030. To achieve this the following targets have been set:

• Increase offshore wind capacity from 11GW to 50GW by 2030
• Increase solar capacity from 14GW to 70GW by 2035
• Increase nuclear capacity from 7GW to 24GW by 2050
• Up to 10GW of hydrogen capacity by 2030

As well as these targets the Government have announced a licensing round this summer for new North Sea oil and gas projects as well as a review into whether fracking technologies are safe. Many of the targets contain the caveats of ’up to’ and ‘subject to affordability and value for money’ which in the midst of a cost of living crisis raises questions about how much of the new capacity will be built.

The graph below shows how the new capacity targets may shape the UK’s fuel mix over the next couple of decades. It is clear that, while ambitious, these targets are very much a long term solution. De-rated margins will be tight in the short-term and we will remain dependent on gas for a number of years. The forecast below is taken from EIC’s Long Term Forecasting Report which provides a 20-year view of future energy costs.

Considering the tight capacity margins over the next few years it is surprising there has been no intention from the Government to reduce demand by including energy efficiency measures in the energy strategy. In the past 10 years domestic installations of cavity wall and loft insulation have dropped significantly due to a lack of Government support. Schemes like these are seen as quick wins in terms of reducing domestic energy consumption which would help to lower bills.

Since the change in planning laws and the removal of subsidies for onshore wind in 2015 there has been a significant drop in the number of new installations. Despite initial hopes for an ambitious target for onshore wind, Boris Johnson has given in to pressure from Tory backbenchers who view wind turbines as an ‘eyesore’. This omission comes despite it being the cheapest method of generation and recent polls providing significant public support. The continued lack of planning and investment in UK energy infrastructure is finally catching up with the Government but it continues to be consumers who pay the price in the shape of increased energy bills. For more information please visit our website.

John Palmer, Director of Flexible Procurement gives his insight into the UK Energy Strategy Review.

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National Grid have published the three Triad dates for the 2021/22 season, which are listed in the table below. For a tenth consecutive year EIC has successfully called an alert on each of these days.

There was a reduction in the number of Triad calls this year with EIC only issuing 17 alerts in total, nearly a third less than the number called the previous winter. This compares favourably with other suppliers who called an average of 25 alerts across the Triad period.

Source: National Grid

Note: Settlement data published on 29/03/22

What are Triads?

Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads. If consumers are able to respond to Triad alerts by reducing demand, then they will be able to lower their final transmission costs.

Mild winter leads to fall in demand

The Triad season started with a long period of mild weather before a cold spell at the end of November and start of December which resulted in the first Triad. Temperatures returned above seasonal normal for most of December with a particularly mild period between Christmas and New Year. The remaining two Triads occurred in January as temperatures frequently dropped below seasonal normal. In contrast, February contained long periods of mild and windy weather which resulted in a drop in peak demand. Across the Triad season 14 weekdays had an average temperature below 3°C, with 10 of these occurring in January. This compares to 24 the previous winter and only six for the 2019/20 winter.

This winter saw peak demand fall by 1.7GW from last year mainly due to the milder temperatures. There was an increase in demand-side response and a decrease in domestic consumption compared to last winter as there were less severe lockdown restrictions. Average demand also decreased and has now fallen by 9.5GW or 19% in the past 10 years. This has coincided with a 30GW decrease in baseload capacity over the same period as a number of coal, gas and nuclear power stations have closed.

It will be interesting to see whether demand continues to fall next year as baseload capacity is projected to decline further. Three coal and one nuclear power stations are set to close by next winter resulting in the loss of 4.7GW capacity. This will be partially offset by the opening of the 893MW Keady 2 gas power station and the 1GW ElecLink interconnector. However, if margins are tight on cold, still days then this will be reflected by a spike in day-ahead prices. With gas and power prices already at record levels there will be pressure on all sectors to reduce demand in the coming months to lessen the impact of energy bill rises.

Triads granted extra year

In May 2021, Ofgem launched a consultation on the Transmission Demand Residual (TDR) part of the Targeted Charging Review (TCR). The minded-to decision was to delay the implementation until April 2023 which means that there is one final chance for consumers to benefit from Triad avoidance over the 2022/23 winter period. The changes to DUoS charges will still be implemented in April 2022.

The TCR aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, sites currently taking Triad avoidance action are likely to face an increase in TNUoS costs from April 2023 as the effect of Triad avoidance is removed. Likewise, sites that have a capacity level set too high are also susceptible to DUoS and TNUoS cost increases as they are potentially placed in a higher charging band.

How EIC can help

With the confirmation that from April 2022 residual charges will be calculated using a capacity-based methodology, now is the perfect time to undertake a capacity review on all of your HH sites. EIC’s Capacity Review service is a fully managed end to end offering. We undertake detailed analysis for each of your sites, outline potential savings and offer clear advice on what action you should take. If we find that your capacity can be reduced by more than 50% it may also be possible to apply for a charging band reallocation which could significantly cut your future DUoS and TNUoS charges.

EIC can also help you accurately budget and forecast your energy prices with confidence with our Long-Term Forecast Report. Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. The Long-Term Forecast Report is a valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend over the next 5, 10, 15 or 20 years. This allows you to confidently forward budget and avoid any nasty surprises. Whilst we can’t prevent the rise of non-commodity charges, we can ensure you are fully prepared for the increases.

Get in touch today to find out more on how EIC can help you future-proof your business.

The post A decade of successful Triad calls for EIC appeared first on EIC.

My role has actually changed quite a bit during those eight years. I started out as a risk management consultant and I was responsible for the trading strategy for all of our clients. I’d support the client-facing teams with meetings. I’d go out and explain what’s happening in the markets and what we were doing with the trading, and make changes to risk management policies.

Then I took over as the manager of the flexible procurement team. I’ve got a team of six flexible account managers and it’s a really good team to manage; they’re really good people. They know what they’re doing and I’m there to support and help out when they need it.

Quite often with customers it’s sitting and working with them to understand what they are looking to get from their flexible energy contract – do they want budget certainty, do they want a market reflective price? So it’s working out what the right strategy is for them.

What do you think has been the impact of the Covid pandemic on the energy sector?

There’s been quite a few changes as a result. The biggest thing in the pandemic was the way that consumption changed, particularly early on with businesses closing down or reducing what they were doing significantly. Because we were pro-active with EIC customers, none of our flex customers were penalised for going outside of their forecast consumptions – as we were able to mitigate that.

For a lot of organisations, people aren’t returning to the office full time. Some businesses are moving entirely to remote working. So that will be a change in the way we use energy. Last winter was a good example. With more people working at home, it changed the profile of energy use over the winter.

“This year we’ve seen the bounce in energy prices, from long-term lows to record highs. This will drive people to look at how efficient they are being with their energy, and how flexible they can be with their demand”

This year we’ve seen the bounce in energy prices, from long-term lows to record highs. This will drive people to look at how efficient they are being with their energy, and how flexible they can be with their demand. There are various schemes to try to make demand flexibility pay off for customers, as well as the opportunity to avoid certain non-commodity charges.

There’s a change in the way we generate our energy in the UK, with the move away from coal generation and closures of some of the nuclear plants. Also the move towards more renewable generation, which typically is wind, wave and solar (which there’s an intermittency to) – could mean our system margins are going to be much tighter in the coming years.

Recently we saw really tight system margins, which meant that day ahead prices went up to over £500 a megawatt hour for electricity. That’s something which is going to become more of an issue for consumers and suppliers to manage; there will be that change in the volatility of market prices.

“The cheapest kilowatt hour is the one you don’t use.”

Procurement will always be important. Buying energy as efficiently and cheaply as possible is always going to be a key part of the puzzle. I think net zero and carbon reduction will become a much bigger consideration for all energy users. It will be about how you can balance your procurement alongside those wider needs of low or zero carbon energy.

What are your predictions for the energy markets over the next year?

That’s a loaded question! At the moment the big thing is obviously wholesale prices and what they might do. I think we are going to be very much driven by weather over the winter, and how much gas becomes available.

I think with Nord Stream 2 coming online, and sending gas from Russia, that might well bring prices down. Certainly if we have a mild winter, prices could come down. But if we have a horrible winter and a shortage of gas, then it will be a case of, when will this stop? Prices can’t stay where they are forever, I think there’s a point where they’re going to come down. It’s just what the drivers are going to be for that.

More generally, it certainly looks like there’s going to be a tightening of what is considered to be a green energy contract. At the moment, a Rego [Renewable Energy Guarantees of Origin] backed electricity contract may not be linked to your electricity in any way. Accusations of greenwashing suggest that there might be a tightening of those regulations. There will definitely be a push towards green contracts. Hopefully green gas will become more established or an alternative option – perhaps hydrogen in the longer-term – which is being looked at as a cleaner way of doing things.

“If we have a horrible winter and a shortage of gas, then it will be a case of, when will this stop?”

I know that there’s a project in Humberside, Zero Carbon Humber, that is looking at how they can capture carbon from a number of carbon intensive businesses including Drax power station as well as other ways to make a net zero industrial cluster in the area. That will be a really interesting project to follow, to see if other areas try to replicate it.

Generally, customers are going to be looking at how they can reduce their energy consumption or generate their own. The cheapest kilowatt hour is the one you don’t use.

What are the pros and cons of flexible contracts, and who would you recommend them to?

I think the benefits are that instead of buying all of your energy on one day, which you do with a fixed contract, you can buy over time. You can sell back energy. Whilst with a fixed contract, if you sign one now, those are the prices and you’re stuck with them for the duration.

If the way you’re using your energy onsite changes then you can reforecast, so you don’t have to worry so much about volume tolerances. In a fixed price contract everything is set up at the time that you sign the contact, so it’s more rigid.

The benefits of flex are very good, but you need to be a reasonably large energy user to do it. With a consumption of more than 2 gigawatt hours annually. You can look at baskets and, if you’re a much larger customer, stand-alone flex contracts. Baskets allow smaller energy users (who may not be able to get a standalone flex contract) to be grouped together in a basket that allows their consumption to be traded together with other organisations.

Do clients need an in-house manager to handle flexible contracts day-to-day?

Having a point of contact to discuss things with is useful but you can have as much or as little information as you want. If you’re someone who wants to see information regularly and know exactly what’s going on, then flexible is a good way to do it, because you’ll be getting a lot of information. We’ll be actively talking to you about what the market’s doing, how it’s moving and what that means for your position.

“We’ll be actively talking to you about what the market’s doing, how it’s moving and what that means for your position.”

We have customers who are really used to the energy markets and energy contracts, but we’ve also got some clients who’ve never done flex before. We can do as much or as little as you want. We can deal with all the trading and we can agree a strategy and walk you through how that works.

We’ve got customers where, initially they wanted to be really involved because we were new to them. It’s then got to a point where they know us, they trust us and they get less involved and leave more to us to do.

If you were in your clients’ shoes, what would you be thinking about when considering an energy purchase?

I would definitely go for a flexible contract, if I was big enough for one. If I was signing a fixed contract, I would sign a shorter contract at the moment and be ready to sign another one if the markets went against me. I’d take a short term position.

“Since 2014, we’ve saved £79 million for clients on flex contracts. Ben Sherbrooke and John Dawson have done a fantastic job.”

For a flex contract, I’d be looking to get things set up and look for a strategy that protected me against the market rising but also gives me flexibility to make some savings if prices fall.

What do you think is the biggest misconception or myth in energy?

The myth that’s been exploded this year is that prices always come down in the summer. That’s been a general assumption, and this year has certainly changed that.

From the flexible procurement team’s point of view, we’ve got a really experienced team. We deal with a whole range of queries – new connections, disconnections, changes of tenancy, site additions and volume queries. The team are very focussed on looking after customers and making sure they have a good experience. That is something that I think we do very well. The customer hopefully knows they can come to us with a query or a problem and we’ll work hard to try and solve that problem for them.

In terms of sustainability, what do you think clients should be focusing on?

The first thing any business should be looking at is reducing the amount of energy they use. That is going to deliver the biggest savings. Projects to replace old lighting or upgrade out-of-date equipment will bring savings on energy contracts.

For companies with the opportunity, onsite generation is something to look at. Solar is becoming more financially viable for a lot of clients and payback times are less now than they were three or four years ago. Alongside solar I suggest battery storage too.

If someone is installing solar I would definitely say consider battery storage alongside it. If your solar is generating electricity during the middle of the day, store that and use it during peak times – because that will help you avoid some of these potential price fluctuations and some of the non-commodity costs that are charged based on when you use your energy. From a green point of view, obviously looking at opportunities to buy green electricity and gas – although green gas is incredibly expensive at the moment. So potentially for some customers, carbon offsetting might be an alternative. And that’s something we can do.

What are your hobbies?

Cycling is definitely one of my main, spare time activities. I’ve got a summer bike and a winter bike. I don’t want the summer bike to get messed up in the winter! I’ve got a carbon fibre summer bike, a Canyon, and a more sturdy winter one with mud guards. I’m a member of a cycling club called ‘Chapter 2’, although we haven’t been out since the pandemic.

What was the one thing you missed during the lockdown?

Cycling with other people was one of the things I missed most. To be honest seeing friends and family, particularly as my best friend lives round the corner from me. It was a shame that we could see each other’s houses, but we couldn’t see each other. I sort of saw my mum, from a few metres away to help with shopping and was able to do more for her during the later lockdowns. I didn’t see my sister for a good six or seven months. I only saw her on video chat because she lives down in Kent. It took a long time to see her – we are very close and we get on very well.

The post In conversation with…John Palmer appeared first on EIC.

There’s been quite a few changes as a result. The biggest thing in the pandemic was the way that consumption changed, particularly early on with businesses closing down or reducing what they were doing significantly. One of the big things we had to do was to react to that and reach out to customers, to reforecast their consumptions.

Because we were pro-active with EIC customers, none of our flex customers were penalised for going outside of their forecast consumptions – as we were able to mitigate that.

“This year we’ve seen the bounce in energy prices, from long-term lows to record highs. This will drive people to look at how efficient they are being with their energy, and how flexible they can be with their demand”

We are going to see a lasting shift in the way people work so, for a lot of organisations, people aren’t returning to the office full time. Some businesses are moving entirely to remote working. So that will be a change in the way we use energy.

This year we’ve seen the bounce in energy prices, from long-term lows to record highs. This will drive people to look at how efficient they are being with their energy and how flexible they can be with their demand.

Generally, customers are going to be looking at how they can reduce their energy consumption or generate their own. The cheapest kilowatt hour is the one you don’t use.

“The cheapest kilowatt hour is the one you don’t use.”

If you can generate your own energy onsite, you will be avoiding a lot of the non-commodity charges.

What are your predictions for the energy markets over the next year?

That’s a loaded question! At the moment the big thing is obviously wholesale prices and what they might do. I think we are going to be very much driven by weather over the winter, and how much gas becomes available. I think with Nord Stream 2 coming online, and sending gas from Russia, that might well bring prices down. Certainly if we have a mild winter, prices could come down.

More generally, it certainly looks like there’s going to be a tightening of what is considered to be a green energy contract. At the moment, a Rego [Renewable Energy Guarantees of Origin] backed electricity contract may not be linked to your electricity in any way. Accusations of greenwashing suggest that there might be a tightening of those regulations. There will definitely be a push towards green contracts. Hopefully green gas will become more established or an alternative option – perhaps hydrogen in the longer-term – which is being looked at as a cleaner way of doing things.

If you were in your clients’ shoes, what would you be thinking about when considering an energy purchase?

I would definitely go for a flexible contract, if I was big enough for one. If I was signing a fixed contract, I would sign a shorter contract at the moment and be ready to sign another one if the markets went against me. I’d take a short term position.

For a flex contract, I’d be looking to get things set up and look for a strategy that protected me against the market rising but also gives me flexibility to make some savings if prices fall.

From a flexible procurement point of view, our trading team is really good. They get really good results for clients. Since 2014, we’ve saved £79m for clients on flex contracts. Ben Sherbrooke and John Dawson have done a fantastic job.

“Since 2014, we’ve saved £79m for clients on flex contracts. Ben Sherbrooke and John Dawson have done a fantastic job.”

What do you think is the biggest misconception or myth in energy?

The myth that’s been exploded this year is that prices always come down in the summer. That’s been a general assumption, and this year has certainly changed that.

In terms of sustainability, what do you think clients should be focusing on?

The first thing any business should be looking at is reducing the amount of energy they use. That is going to deliver the biggest savings. Projects to replace old lighting or upgrade out-of-date equipment will bring savings on energy contracts.

For companies with the opportunity, onsite generation is something to look at. Solar is becoming more financially viable for a lot of clients and payback times are less now than they were three or four years ago. Alongside solar I suggest battery storage too.

What was the one thing you missed during the lockdown?

Cycling with other people was one of the things I missed most. I’m a member of a cycling club called ‘Chapter 2’, although we haven’t been out since the pandemic.

You can read our full interview with John Palmer here.

The post 60 seconds with John Palmer appeared first on EIC.

The installation of LED lighting in business premises throughout the country has shown encouraging results. But if the UK wants to continue to progress as a sustainability leader, more businesses must follow suit.

20% of electricity generated in the UK can be attributed to lighting. As we approach COP26 and net zero targets, it is essential that we cut carbon emissions wherever possible and fully embrace sustainability. And to do this, we must incorporate innovative systems such as LED lighting.

We take a look at some of the benefits of making the switch to LED lighting for the darker winter months, and beyond.

Reduce emissions

Lighting accounts for around 5% of global CO₂ emissions. If businesses across the world made the switch to LED technology, they could save a whopping 1,400 million tonnes of CO₂. And while there are many benefits to implementing green practices, the reduction of emissions and the corresponding impact on the environment are surely at the top of the list.

Before a business can understand how best to incorporate LED lighting, it must first survey its sites and practices. Once these areas of high emissions have been pinpointed, you can then focus on reducing them.

Making the switch to LED lighting can hugely reduce a business’s carbon footprint. LED lights use 90% less energy than a typical incandescent bulb. And traditional lighting loses almost 95% of its energy, through heat production alone.

Benefitting budgets

LED lighting is the most cost-effective and durable option, for both businesses and households around the world. Making the switch to a different lighting system for buildings, possibly on multiple sites, can seem daunting. But the eventual return on investment will not only be beneficial in terms of time and money, but also environmentally.

These bulbs require far less electricity power and have a much longer lifespan. Sometimes even lasting an impressive 20 years. Aside from the environmental benefits, this will also save money for businesses, as they purchase less bulbs.

Boost corporate social responsibility credentials

Becoming energy efficient will also boost your corporate social responsibility (CSR) credentials. By improving green credentials, businesses can attract new potential clients while cutting utility costs and carbon emissions. Transparency is now essential for businesses, as customers around the world place increasing value on the environmental.

By demonstrating broader interests, rather than simply focusing on generating revenue, businesses can attract a loyal customer base. Prioritising the environment and customer wellbeing can also prompt word-of-mouth referrals and entice a broader range of clients.

How can EIC help?

It is within the best interests of every business to find simple solutions, that are both efficient and effective. The energy efficiency and long lifespan of LED lighting holds the potential to revolutionise the lighting industry. Boosting efficiency across the UK, and the world.

At EIC, we provide audits and a number of services that help businesses to decide upon the most effective and efficient solution for them. Our lighting solutions have helped businesses to upgrade their systems and reduce their carbon footprints.

Get in touch today to find out how EIC can help you to integrate effective and efficient lighting solutions into your business.

The post Lighting solutions for dark winter nights appeared first on EIC.

WHAT ARE SCIENCE-BASED TARGETS?

Science-based targets came about as a result of the Paris agreement in 2015. In this legally binding treaty, 195 parties committed to limiting global warming to below 2 degrees Celsius compared to pre-industrial levels. Then in 2018, the Intergovernmental Panel on Climate Change said that global warming should not exceed 1.5 degrees Celsius.

To achieve this, GHG emissions must halve by 2030, and drop to net zero by 2050. A ‘science-based’ emissions target stays in line with the scale of reductions required to meet these objectives. These goalposts track progress and give the private sector a clear idea of how quickly they need to reduce their GHG emissions to prevent the worst impacts of climate change.

In the global race towards net zero, science-based targets will become crucial for business growth across the sectors. Not only do they help tackle climate change, but they boost a company’s competitiveness in a changing market.

A UNITED INITIATIVE

The Science Based Targets initiative (SBTi) was set up by CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC). The group supports companies that have set science-based targets. They have found that the positive effects for these businesses include increased innovation, strengthened investor confidence and improved profitability.

The STBi also:

1. Defines and promotes best practice in science-based target setting via the support of a Technical Advisory Group.
2. Offers resources, workshops and guidance to reduce barriers to adoption.
3. Independently assesses and approves companies’ targets.

WHAT ARE THE BENEFITS OF SETTING SCIENCE-BASED TARGETS?

There are many benefits to setting science-based targets. By significantly reducing emissions, you are not only building a brighter future for the planet but a potentially profitable one for your business.

Here are some of the benefits of setting science-based targets:

• Illustrate excellent CSR – For large corporates there is a growing responsibility to take action against climate change, science-based targets are a way to do this.
• Deliver a competitive advantage – Integrating environmental policies into your business strategy helps your business stand out in a crowded marketplace.
• Involve the whole company – Engage with internal and external stakeholders to help your business achieve or even exceed targets.
• Reduce large costs – Lowering emissions often requires a closer look at your energy portfolio and making your utilities as efficient and low carbon as possible. This can result in significant savings for your business.
• Investor confidence – 52% of execs have seen investor confidence boosted by targets. As TCFD recommendations come into play and climate-related risks become more important, this will only become more prevalent.
• Increase innovation – 63% of company execs say science-based targets drive innovation.

HOW DO YOU SET A SCIENCE-BASED TARGET?

There are three approaches to setting a science-based target (SBT):

1. Sector-based approach – The global carbon budget is divided by sector and emission reductions allocated to individual companies based on its sector’s budget.
2. Absolute-based approach – All companies will equally work towards the same per cent reduction in absolute emissions.
3. Economic-based approach – A carbon budget is equated to global GDP and a company’s share of emissions is determined by its gross profit since the sum of all companies’ gross profits worldwide equate to global GDP.

HOW CAN BUSINESSES GET INVOLVED?

For a business to get involved in the initiative there is a simple 4 step process to follow:

1. Submit a letter to say you are committed to the scheme.
2. Develop your own science-based target within 24 months.
3. Submit your target for validation.
4. Announce your target.

838 companies are currently taking science-based climate action and 343 companies have approved science-based targets.

HOW EIC CAN HELP

Creating science-based targets is essential for businesses of every size as we progress towards net zero targets. To create these targets, a business must first understand its consumption. At EIC we offer a range of comprehensive services that can help you help your business.

We are already partnering with leading UK private and public sector organisations – supporting them to transform their operations in line with ambitious targets. This will help them future-proof their business and save the planet.

EIC can assist in meeting your science-based targets by:

• Establishing your carbon footprint to act as your baseline.
• Provide recommendations to reduce your carbon impact.
• Set your target to reduce your carbon footprint to meet the 1.5°C objective.
• Create an ongoing Carbon Management Plan.
• Create and publish all documentation required for the scheme.
• Work with you to embed the strategy into your business.

To learn more about EIC’s carbon and net zero services, contact us today.

The post Science-Based Targets: everything you need to know appeared first on EIC.

As the world reels from the biggest price rise in electricity and gas in over a decade, our expert analysts take a look at some of the reasons behind the sudden surge and what the future could hold in store.

European storage inventories are well below average

There were strong withdrawals in Q1 2021, as colder temperatures settled over Europe. At the same time, Asia was experiencing similar conditions. Japan had a very cold January along with several outages, which led to an immediate need for LNG to boost gas power generation.

As a result, LNG deliveries to Europe slowed down and the region had to rely on more stored gas. The early part of Q2 2021 saw persistent colder temperatures, low wind and maintenance, leaving little surplus to make its way into storage.

By the time injections started there was already a shortfall and the pace of injections has not been enough to shut down this deficit.

European storage is vital to ensure some security of supply over winter, especially if there are supply issues from other sources. Storage is also needed to top-up supply, when demand is high.

Reduced gas supplies this summer

Part of the reason for the lacklustre injections is the heavy maintenance in many gas-producing regions during this summer. Covid restrictions hampered maintenance schedules last summer and many sites were running strong through the colder winter that followed.

In addition to the shortfall in supply, LNG deliveries to the UK and Europe were drastically reduced, particularly during this quarter. This fall in import volume is due to a marked increase in demand for LNG in Asia this year. This demand growth is largely due to China ramping up its economy post-Covid, as well as other regions replenishing their depleted stock levels.

Weak renewable generation this summer

In recent years, the UK has increased its wind capacity to about 25% of the generation capacity. This summer has seen some of the lowest wind speeds, with the likes of Orsted – who have invested heavily in wind generation – reporting lacklustre returns this summer.

The graph above highlights the drop in wind output, especially in Q3 2021, and the increased need for gas generation. As a result, the need for gas to generate power has been elevated at a time of tighter gas supply.

Supply margins in the UK were extremely tight last week, and as a result, we saw some unprecedented price levels – as shown below in the UK day-ahead power price. System prices were as high as £4,000/MWh at peak times.

Increased cost of substitute sources of power generation

In parts of Europe, there has been an increased reliance on coal and lignite power generation. On the back of various policy moves, the price of carbon allowances in Europe has also surged. This year alone, prices have doubled. As a consequence, it has become increasingly expensive for fossil-fuelled power generation. Gas prices have risen so strongly that it has become more profitable for coal and lignite power generation in Europe (which are more polluting) instead of gas.

The UK and European governments manage the supply of carbon allowances. With a current policy of zero carbon, it is difficult to see governments increasing the availability of allowances.

Russian gas supply

Despite the surge in gas prices across Europe, Russian supply volumes have not responded to demand. In July and August, there was maintenance on both Nordstream 1 and Yamal pipelines that saw substantial declines in Russian volumes, exacerbating the tight gas market.

The domestic Russian gas market is also under relatively tight conditions. Russian domestic storage was heavily drawn last winter and there has been some delay in replenishing them, due to heavy summer maintenance.

There has also been a reluctance to increase flows across the Ukrainian and Polish routes. In the meantime, with the completion of Nordstream 2, a preferred alternative route is ready. But there are some legal hurdles that need to be overcome, denting market hopes for the start of the fourth quarter.

What’s next?

There is a substantial risk premium priced into this winter, given all these factors so far. There is also an underlying uncertainty of how and when these will resolve, in the face of an unknown winter demand.

A mild and windy winter will allow for more wind generation and reduce some of the demand for heating. However, periods of cold and still conditions will see supply margins drop and system prices record high prices once more.

Gas could start to flow through Nordstream 2 this winter. But will this merely displace gas that is currently moving through one of the other routes to Europe? Or will supply increase significantly, once domestic reserves are met?

It is likely that this winter will see an increase in price volatility, with price swings in either direction.

For advice on how your business can respond to changing energy prices, contact EIC today.

This article was written by the Market Intelligence Team

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Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads.

If your electricity contract allows it, reducing your demand at these specific points will result in lower transmission charges. However, knowing when Triads occur is a complex business. To help our clients, EIC provides a Triad Alert service. We have successfully forecast each of the three Triad periods for the last 9 years. By predicting Triads each winter, EIC has saved customers millions of pounds in transmission charges.

Triads granted an extra year

In May 2021, Ofgem launched a consultation on the Transmission Demand Residual (TDR) part of the Targeted Charging Review (TCR). While the results of the consultation are yet to be published, the minded-to decision is to delay the implementation until April 2023. This would create an extra opportunity for consumers to benefit from Triad avoidance over the 2021/22 and 2022/23 Triad periods.

The TCR aims to introduce a charge that Ofgem considers to be fair to all consumers and not just those that are able to reduce consumption during peak periods. From April 2023, the residual part of transmission costs will be levied in the form of fixed charges for all households and businesses, with the latest forecast figures below. For the majority of consumers, these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action, it is likely that their future costs will rise.

Uncertain winter ahead

Gas and power prices have increased significantly throughout the summer due to maintenance issues, a global gas market surge and low renewable output. As temperatures fall leading into winter, gas and power demand will inevitably increase and put more pressure on prices. There are particular concerns around extended periods of cold weather with low wind, which will create tight margins and cause day-ahead power prices to spike. It is during these periods that Triads are more likely to occur.

Last winter saw the first increase in peak demand since 2014/15 and the largest year-on-year increase since 2007/08. There were a number of factors which contributed to this, including lower temperatures, a reduction in demand-side response (DSR) and an increase in domestic consumption. An increase in Covid-19 cases over the winter may lead to a return to working from home, which could again lead to an increase in peak demand. However, if Covid-19 cases remain stable then there could be an increase in DSR as more businesses look to avoid Triads while they still can.

EIC track record of success

EIC has an in-house model which has successfully forecast every triad period for the last nine years. We issue clients with comprehensive alerts advising them when a Triad is forecast, so they can reduce consumption accordingly.

Our Triad Alert Service forecasts the likelihood of any particular day being a Triad and sends alerts before 10am. This gives businesses time to take informed action to avoid high usage during these half-hour periods, while minimising disruption to their everyday activity. In addition, we monitor the market throughout the day and in the event of a significant change we will send out another alert in the afternoon. The daily report can also help you plan ahead with an overview of the next 14 days, alongside a long-term winter outlook.

Calling an alert every weekday would generate a 100% success rate, however EIC recognises the negative impact this could potentially have on our clients. Organisations would incur major damage to revenues if required to turn down their production each day for four months, ‘just in case’. At EIC, our aim is to provide as few alerts as possible. Over the 2020/21 Triad period we called just 14 red alerts, comparing favourably against a supplier average of 20 alerts.

How we can help

We have helped hundreds of clients to avoid these transmission costs by providing them with the tools they need, giving EIC an enviable track record in Triad prediction. Our analysis has found that clients who take direct action to avoid Triads based on our alerts save an average of 20%, which represents an annual saving of £26,000. The Triad season begins on 1 November. Find out more information about our Triad Alert service .

EIC can also help you to accurately budget and forecast your energy prices with confidence, with our Long-Term Forecast Report. Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. The Long-Term Forecast Report is a valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend over the next 5, 10, 15 or 20 years. This allows you to confidently forward budget and avoid any nasty surprises. Whilst we can’t prevent the rise of non-commodity charges, we can ensure that you are fully prepared for any increases.

To find out more about our Long Term Forecast Report or to discuss your Triad concerns, contact us today.

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The summit is likely to be shaped by a new report from the Intergovernmental Panel on Climate Change (IPCC). The report warns that there is now a very small window to reduce emissions before exceeding the emissions limit of 1.5°C, as set out in the Paris Agreement. With this in mind, the gravity of COP26 cannot be overstated.

We look at the expected objectives for COP26, and how these crucial policy shifts could impact businesses across the UK.

Ambitious targets for 2030

So far, the focus has been on achieving net zero by 2050. But countries are now being asked to come forward with ambitious emissions reductions targets for 2030.

According to the new IPCC report, global CO² emissions need to decrease by about 45% below 2010 levels by 2030. Otherwise, if they continue to rise at the current rate, global temperatures are projected to increase by more than 1.5°C between 2030 and 2052.

The UK has a significant part to play in this effort. Despite making up less than 1% of the global population, the UK is historically the fifth-largest contributor of carbon emissions in the atmosphere.

For the private sector, this will most likely result in a greater emphasis on science-based targets. Science-based targets aim to reduce emissions, through concrete, corporate objectives. These shorter-term goalposts are designed to track progress for businesses, providing greater transparency on the road to net zero and beyond.

Prioritising adaptation

The IPCC report warns that even with global decarbonisation efforts, it will take decades for the planet to recover. This doesn’t mean that achieving net zero by 2050 and staying within the 1.5°C limit wouldn’t result in immediate benefits (such as improved air quality). But it could take twenty to thirty years for global temperatures to stabilise.

Critically, some of the damage could be irreversible. According to the report, numerous climate-related weather events will continue to cause disruption for centuries to come. This means that adaptation will be just as important as mitigation efforts.

Adaptation methods involve adjustments to ecological, social or economic systems in anticipation of climate change. These can range from building flood defences and early warning systems to changes in government policy and redesigning communication systems.

These methods can coincide with mitigation methods, which focus on reducing emissions.

Given the current state of play, it makes sense that adaptation and resilience are principle themes at the upcoming COP26 event. These are key considerations for large businesses hoping to thrive in the future.

Reforestation and conservation

UK Prime Minister Boris Johnson has promised new domestic pledges and plans to garner international commitments on “coal, cars, cash and trees”.

He said: “We want COP26, the UN great summit, to commit to restoring nature and habitat and ending the massacre of the forests, because trees are among our best natural defences against climate change. To be net-zero for carbon you must be net-positive for trees and by 2030 we want to be planting far more trees across the world than we are losing.”

The UK has faced criticism in the past for having the lowest levels of tree cover, compared to its European neighbours. Forests currently cover just 13% of the country. To reach its net zero target, the Committee on Climate Change has said that tree cover in the UK needs to rise to 17% by 2050.

Mobilising green finance

According to a new analysis from WWF, the UK government’s committed spending is currently well below the required rates to meet its legally binding net-zero emissions target.

Financing green initiatives is essential to combatting climate change, and mobilising green finance is a key objective for COP26.

Achieving our climate goals will require public finance for the development of infrastructure and private finance for innovation and technology. In this transition every company, bank, financial firm and investor will be expected not only to follow, but to lead change.

How can EIC help your business to prepare?

We can provide a bespoke, adaptable roadmap to net zero for your organisation – ensuring carbon compliance and long-term financial stability along the way. Our comprehensive energy and carbon services help guide organisations towards a more sustainable future.

Our goal is to help companies navigate the transition to a low carbon economy. We recognise that while policy decisions drive decarbonisation, every business has a part to play.

To learn more about our net zero and sustainability services, contact us at EIC today.

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There are numerous advantages to becoming a net zero football club. It provides a significant reputational boost and has the potential to cut long-term costs. It is clear that carbon reduction is quickly becoming a mandatory part of any business strategy.

We look at what it means to become a net zero football club and why it matters.

UN Sports for Climate Action Framework

The UN Sports for Climate Action Framework aims to support and guide sports organisations towards a more sustainable future. Similar to science-based targets, this is a voluntary framework setting out identifiable objectives for those looking to display climate leadership.

The framework sets out five principles for signatories:

1. Promote environmental responsibility.
2. Reduce overall climate impact.
3. Educate for climate action.
4. Promote sustainable consumption.
5. Advocate for climate action.

The Premier League sustainability table

These principles have been reflected in a table published by BBC Sport and the Sport Positive Summit ranking Premier League clubs. In 2020, football teams at the top of this sustainability table included Tottenham Hotspur, Arsenal and Manchester United, amongst others.

Points were awarded for:

• Clean energy (2 points)
• Energy efficiency (2 points)
• Sustainable transport (2 points)
• Single-use plastic reduction or removal (2 points)
• Waste management (2 points)
• Water efficiency (2 points)
• Plant-based or low-carbon food options (3 points)
• Communications & engagement (3 points)

One bonus point was available for each of the following:

• The club actively engages fans towards positive behavioural change that reduces environmental impact in their own lives.
• The club is a signatory to the UN Sports for Climate Action Framework.
• The club tracks and reports on the percentage of fans taking different modes of transport to games.

This criteria demonstrates the level of action football clubs are expected to take beyond simply offsetting their carbon emissions. By including energy, waste and water management as well as social engagement and scope 3 emissions reporting, these principles promote real change.

Where to start

Once you have pledged your commitment to net zero, it is important to spread the word. This can be a valuable boost to your reputation, but it also helps to get staff, suppliers and fans involved in making your business more sustainable.

The next step is to calculate your carbon footprint and map a path to net zero. This is where EIC comes in.

Our carbon team has worked closely with Premier League football clubs, helping them to calculate their emissions, mapping a route to net zero, and supporting them on their journey.

Our extensive list of sustainable services includes:

• Sub-metering and monitoring
• Carbon footprinting
• Carbon compliance and management
• Energy data insights and support
• Support for efficiency measures
• Onsite generation guidance
• Green procurement
• Energy and carbon reporting
• Waste management
• Sustainable water solutions
• Support with installing EV infrastructure

Why become a net zero football club?

For decades, the climate emergency has been met with apathy and reluctance. Now, there is real momentum to take action before it is too late. Unfortunately, some organisations are continuing to do the bare minimum in an effort to appear greener without making significant changes. But this ‘greenwashing’ will not support their transition to a net zero economy. The businesses that will thrive are those that embrace efficiency, reducing consumption and waste from every corner of their organisation.

By doing this, not only will football clubs become part of a net zero future – they can become leaders too.

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Onsite generation can offer businesses various benefits, including self-sufficiency and environmental sustainability – and as the technology becomes less expensive and more efficient, the advantages will only increase. While these green solutions are not suitable for every business, they are becoming more prevalent in this time of economic recovery.

Here are some FAQs regarding the new scheme and how it works:

What is the Smart Export Guarantee (SEG)?

The SEG offers payment to small-scale renewable energy generators for excess electricity that is exported to the National Grid. To do this, suppliers with at least 150,000 domestic customers will be required to provide a minimum of one tariff offer to small-scale low-carbon generators.

Do I need to apply for the Smart Export Guarantee?

If you are a small-scale energy generator with either solar PV, wind, CHP, Hydro, or Anaerobic digestion, installed in England, Scotland or Wales with a capacity up to 5MW (or up to 50kW for micro-CHP), you may fit the criteria for the SEG.

For next steps and more info download our SEG Guide

What if I already get the Feed-in Tariff (FiT)?

If you signed up for FiT before the 31 March 2019 deadline, your payments will continue until your contract runs out. The SEG is mostly for companies or households with new renewable energy installations, or for those who missed the FiT deadline.

There is no FiT subsidy for newly installed renewable energy technologies after this date. Backdated applications will also not be accepted.

What is the difference between SEG and FiT?

Whilst the SEG is replacing the Feed-in Tariff, there are differences between the two schemes. The Feed-in Tariff included both export and generation tariffs, but the SEG only provides the former. In other words, with the SEG you will only receive tariffs for the renewable energy you don’t use. This means that customers may not see the same financial benefit for the renewable energy they are generating as solar panel owners initially did with FiT. (Tariffs will vary across regions depending on network requirements.)

There is also a scheme for renewable heat technologies for both domestic and non-domestic purposes, known as the RHI and non-domestic RHI. This government scheme provides financial incentives for the installation of renewable heat technologies. Eligible technologies include biomass heat, solar thermal and heat pumps.

How do I know if on-site generation is right for my business?

On-site generation can often provide energy security: a worthwhile commodity in a volatile market. It can also help businesses avoid non-commodity costs, which can make up almost 60% of your energy bills.

At EIC, we already support our clients with initiatives that incentivise clean energy use, assisting clients with navigating the transition to a net zero landscape. We can help guide you towards the most efficient and cost-effective energy management plan. This can mean exploring on-site generation options, as well as other sustainable solutions that can reduce your carbon emissions and energy costs.

For businesses that have set or plan on committing to a net zero target, EIC would be happy to engage with you. Our carbon team works with businesses to put together an adaptable and bespoke roadmap, outlining the sustainable steps required to reduce your carbon footprint. Along the way, we will ensure you stay compliant with changing legislation, allowing you to make the most of schemes such as the SEG.

To understand more about our energy and carbon services contact us at EIC.

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A circular economy is based on resource efficiency and would help propel the UK’s path towards net zero. Fortunately, a research programme initiating the country’s shift to a circular economy launched in May. The initiative, encompassing 34 universities and 200 industry partners, aims to ease the transition away from taking, making and disposing.

We take a look at what the circular economy means and how UK businesses stand to gain from this approach.

What is a circular economy?

A circular economy is designed to make resources as sustainable and efficient as possible. This means reducing, reusing and recycling resources as much as possible to extend their value and reduce waste.

The main principles behind a circular economy are:

• Design out waste and pollution.
• Keep products and materials in use.
• Regenerate natural systems.

While it is clear that a circular economy can benefit the UK from an environmental perspective, the advantages of this transformation aren’t just climate-related: UK businesses stand to gain as well.

A 2015 study has shown that a circular economic approach could offer costs savings of over half a billion euros by 2030 in Europe alone. It stands to reason that this approach would also benefit those businesses seeking to make financial savings through increased efficiency.

Why should we accelerate our transition to a circular economy?

Each year, Earth Overshoot Day creeps progressively closer. This is an annual milestone, marking when we have used up the natural resources that can be regenerated in a single year. In 2019 and 2021 it fell on 29 July, the earliest date on record.

This means that until the end of the year, the global economy is operating in what is being called an “ecological deficit”. Humanity currently uses 74% more resources than the planet is able to regenerate each year – the equivalent of 1.7 Earths.

In this global culture of waste and inefficiency, the UK is far from unimpeachable – our own national Overshoot Day fell on 19 May this year. The need to transition to a circular economy is becoming more urgent.

How can I prepare my business for a circular economy?

Think about which resources are critical to your business and how you could use them more efficiently. Here are a few areas to consider:

Utilities & Energy

Utilities are usually an excellent starting point, as most businesses need electricity, water and heating. Investing in metering and sub-metering technology across your sites means that you can track these resources and identify areas of waste. A study from the non-profit Club of Rome concluded that installation services for these types of improvements would be central to realising a circular economy in Europe.

Onsite generation may also be a pragmatic energy option for your business. This sustainable solution offers self-sufficiency and energy stability. Onsite generation can play a significant role on the road to net zero. Not to mention, you can avoid rising non-commodity costs which make up a large portion of energy bills.

Waste Management

Waste management is another easy and pragmatic step for businesses looking to adopt a circular approach. The UK generated 222.2 million tonnes of total waste in 2018. Of that, commercial and industrial waste accounted for almost a fifth (19%). This demonstrates the pressing responsibility on these sectors to adopt responsible waste management practices.

Sustainable Design

In November 2020, the UK government invested £22.5m into five new circular research centres. At the heart of this new funding scheme was the development of sustainable design and disposal principles. These centres will explore and improve the processes of several heavily polluting sectors in the UK.

Sectors under the microscope include textiles, metals, construction, chemical production and electronics waste. Construction alone produces a shocking 154m tonnes of mineral waste per year – enough to fill 30,000 Olympic swimming pools.

How can EIC help?

At EIC, we support the transition to a circular economy by leading our clients towards efficiency and sustainability. Our comprehensive services cover metering and monitoring, waste management, carbon compliance, and even guidance regarding onsite generation.

Whether you are looking to take the first step in becoming more circular, or revolutionising your business to be as sustainable as possible, EIC can help.

To learn more about how we can help you accelerate the shift to a circular economy, contact us at EIC today.

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This comes just months before the COP26 climate conference is set to take place in Glasgow. Consequently, the report is predicted to play a significant role in shaping future policy – much like the IPCC’s last report influenced the Paris Agreement.

This could mean radical change for energy intensive industries over the next decade. Given the urgency indicated in the report, businesses should prepare for this sooner rather than later.

Expect a rise in climate-related risk factors

In the UK’s 2020 Roadmap and Interim report, the government announced its intention to make the TCFD-aligned disclosures mandatory across the economy. This will mean accounting for any business risks related to global warming, including threats posed by extreme weather events.

Over the past decade, we have seen a rise in destructive wildfires, devastating heat waves and flooding on a massive scale. This is already impacting business supply chains, transportation and employee health and safety. In this new report, the IPCC draws a definitive link between global warming and the frequency and intensity of these events. This means that as temperatures continue to climb, these calamities will only worsen, putting businesses at further risk.

The report also indicates that even with the required emission reductions, it could take two to three decades for global temperatures to stabilize. This means that, at least for the moment, extreme weather events must be planned for in the long term.

That the disclosure of these climate-related risks will become mandatory for UK businesses is indisputable. But, it is just as important to mitigate these risks as much as possible now.

Net zero targets will become more important than ever

The IPCC report has been referred to as a “wake-up call”, and this could mean a radical overhaul of energy intensive industries. As the UK government ramps up its decarbonisation efforts, large companies will be expected to follow suit. This means setting ambitious net zero targets.

For big energy users, the route to net zero will not be straightforward. Yet, there are many advantages to becoming a net zero or carbon negative organisation. For one thing, it puts you ahead of the curve when it comes to compliance with carbon legislation. It can also maintain your competitiveness in an increasingly green marketplace (both investors and consumers alike).

Perhaps most importantly, especially in a time of economic recovery, reducing your waste and embracing resource efficiency lays a clear path to financial stability. This circular economy approach is considered key to creating a thriving, net zero future.

Carbon offsetting won’t be enough

Many big energy users have turned to carbon offsetting to reach their emission reduction targets. However, the IPCC report states that the oceans and forests that once served as a buffer by absorbing CO² will become less effective, if emissions continue to rise at the current rate. This means that while it is still crucial to develop reforestation and conservation projects, they are not silver bullets.

Instead, companies will be pushed to reduce their emissions as much as possible before turning to offsets solely as a last resort. In this effort, clean energy methods such as green procurement, onsite generation and energy efficiency will play a large role. Responsible waste management, low-carbon transportation and sustainable product design will also be crucial.

We are running out of time

If there is one key takeaway from this new IPCC report, it is the urgency of our state of affairs. Over the last century, temperatures have risen to 1.1°C above pre-industrial levels. If it continues at this rate, the global temperature is projected to increase by more than 1.5°C between 2030 and 2052. This means that the pathway laid out in the Paris Agreement is slipping out of reach.

The promising news is that scientists now have a better idea of what will work. With more accurate projections and a clearer picture of what the future holds if temperatures continue to rise, we are better equipped to drive change. But this change needs to happen now.

How can EIC help?

Our comprehensive energy and carbon services help guide organisations towards a more sustainable future. We can provide a bespoke, adaptable roadmap to net zero for your organisation – ensuring carbon compliance and long-term financial stability along the way. Our extensive energy management services cover everything from metering and monitoring to controls and carbon footprinting.

Our goal is to help companies navigate the transition to a net zero economy. We recognise that while larger policy decisions will drive nationwide decarbonisation, every business will play an important part.

To learn more about our net zero and sustainability services, contact us at EIC today.

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How do REGOs work?

Renewable energy generators are issued with one REGO certificate for every megawatt hour (MWh) of renewable output. This certificate is then sold with an energy contract to prove to the final customer that a share of their energy was produced from renewable sources.

Why are REGO prices rising?

In recent weeks the cost of REGO certificates has increased dramatically, leading to rising renewable electricity contract renewal prices. There are a number of factors driving the increases, including:

• Lower levels of renewable generation than expected in the UK in the 2020–21 period, reducing the number of REGOs available on the market
• Higher levels of demand for renewable electricity
• End-of-year purchasing by suppliers to meet their obligations
• Uncertainty surrounding the acceptance of European Guarantees of Origin certificates (GoOs) in future
• Increase in wholesale electricity prices that continue to recover to pre-pandemic levels

These factors mean that customers securing renewable electricity contract renewals are likely to see their prices increase.

Are REGOs used for greenwashing?

REGOs have faced criticism for allowing greenwashing. This is because some suppliers buy power on the wholesale market, which is a mix of all sources including fossil fuels and nuclear. They then separately acquire REGOs to label this power ‘green’. Scottish Power and Good Energy have recently called for regulatory reforms to close these “loopholes” in the market.

Despite these calls for reform, a recent Cornwall Insight’s survey found that 74% of participants felt there had been no improvement in REGOs regulations.

How can EIC help?

The sharpest insights are crucial in today’s volatile markets. We work to ensure that our clients are aware of key market movements and are ready to capitalise on every opportunity.

The EIC Market Intelligence team has extensive knowledge of the electricity and carbon markets and the fundamentals driving them. Interpreting this information is a key component of a successful energy management strategy.

EIC can help your business stay ahead of the curve with market insights and smart procurement so you can make energy management decisions with confidence. To learn more, contact us at EIC today.

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How will the plan impact the country?

Transforming the transport sector is essential for achieving net zero emissions in the UK. And could greatly benefit our cities and towns. While some are saying the plan is not progressive enough, Transport Secretary Grant Shapps says it is “just the start”.

“Transport is not just how you get around. It is something that fundamentally shapes our towns, cities, and countryside, our living standards and our health. It can shape all those things for good, or for bad. Decarbonisation is not just some technocratic process. It’s about how we make sure that transport shapes quality of life and the economy in ways that are good.” Shapps said.

“It’s not about stopping people doing things: it’s about doing the same things differently. We will still fly on holiday, but in more efficient aircraft, using sustainable fuel. We will still drive, but increasingly in zero-emission cars.”

Highlights of the plan include:

• End the sale of new petrol and diesel cars and vans from 2030.
• The government’s own fleet of vehicles will transition to electric vehicles from 2027. As an interim step, 25% of the fleet will also change to ultra-low emissions vehicles by December 2022.
• Petrol with up to 10% ethanol (E10) blend will be introduced as standard petrol from September 2021 in the UK.
• End the sale of new petrol and diesel heavy goods vehicles (HBVs) and buses by 2040 (subject to consultation).
• Plan to bring aviation sector’s emissions to net zero by 2050.
• Plan to commit to the 2040 target for domestic aviation and airport buildings and operations in England

EIC’s expert analysis

Victoria Pollard, a Carbon Compliance Manager at EIC, weighs in:

The changes required to transform the transport sector go beyond switching your domestic vehicle to a plug in electric. The shift to low carbon transportation will require a comprehensive review of our public and commercial transport and radical infrastructural change. The transport decarbonisation plan is a progressive stride in this direction.

A ‘modal shift’ is being seen as the most cost effective choice to begin this effort. A ‘modal shift’ essentially means driving gradual changes from one form of transportation to another.  Making petrol more expensive, for example, as a way to encourage the use of public transport. This method can be an effective way to change consumer perception, raising questions like, is there a need for multiple cars per domestic dwelling, or even any cars?

But is a modal shift really viable? There are many options for public transport or zero emission transport out there, but this is usually perceived as more of an inner city option. And while the UK’s size has always afforded easy commuting to various parts of the country, this would not be an easy transition for those living in more rural areas.

This concept also relies on public transportation being able to rapidly change from traditional petrol/diesel to an electrified network, which could prove challenging. Commercial vehicles and long distance public transport like coaches are unsure of how and when they will be able to achieve decarbonised transport options. Electric batteries are not yet seen as an option for these sized vehicles as their charge times are currently commercially unviable.

One thing is clear, the private and public sectors need to work as one to ensure the whole transportation spectrum is considered in the decarbonisation plan.

To learn more about how EIC can help you on your path to net zero, contact us today.

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This was once seen as a fairly ambitious target. Especially considering the previous commitment to an 80% reduction within the same timeframe. However, it has now become clear that achieving net zero by 2050 is imperative to tackling the catastrophic effects of climate change.

How close is the UK to reaching net zero?

To reach ‘net zero’, the UK must significantly reduce its emissions while simultaneously offsetting those that can’t be avoided. In this effort, the pandemic served as a hidden blessing. Thanks to reduced traffic, travel, waste and energy consumption, there was a record-breaking 10.7% fall in the UK’s carbon emissions in 2020. This resulted in a 48.8% reduction in greenhouse gas emissions from 1990 levels, a milestone in the country’s net zero journey.

Yet despite this, the UK is set to breach its fifth carbon budget by at least 313Mt of carbon dioxide equivalent (CO2e) according to research done by Green Alliance. And as workplaces open and travel resumes again, emission levels could return to pre-Covid levels. This could make meeting the sixth carbon budget, which recommends a reduction of 68% by 2030, challenging.

Is this achievable?

A recent report by The National Grid Electricity Operator (ESO) outlines 4 potential scenarios for decarbonisation in the UK. These were designed in part to lay out steps to meet the sixth carbon budget, and 3 of the scenarios see us reaching net zero by 2050. But, while this sounds promising, the report also explains that drastic changes are required to achieve future emissions targets.

The National Grid ESO’s head of strategy and regulation Matthew Wright said, “Our latest Future Energy Scenarios insight reveals a glimpse of a Britain that is powered with net zero carbon emissions, but it also highlights the level of societal change and policy direction that will be needed to get there.

“If Britain is to meet its ambitious emissions reduction targets, consumers will need a greater understanding of how their power use and lifestyle choices impact how sustainable our energy system will be – from how we heat our homes, to when we charge our future cars – and government policy will be key to driving awareness and change. 

“Britain is making significant progress towards achieving net zero. The fundamental changes outlined in our latest FES insight show just how important a coordinated approach will be between policymakers and industry if we’re to capitalise on that momentum.”

What does this mean for businesses?

The UK ramping up its decarbonisation efforts will impact businesses and communities of all sizes. If the recently published Transport Decarbonisation Plan is any indication of policies to come, the general public should prepare for drastic changes. The plan outlines the Government’s approach to decarbonising the highest-emitting sector. It includes bringing the ban on petrol and diesel cars and vans forward from 2035 to 2030. As well as a consultation on zero-emission bus fleets and lorries by 2040.

Other expected changes could include higher energy efficiency standards and extended mandatory carbon reporting. A recent example of this is the extension of mandatory display of annual energy certificates in all larger office buildings. This means that businesses will have to prioritise their energy management in the future. Fortunately, reducing waste and boosting your green credentials often results in both financial and reputational benefits.

How can EIC help?

At EIC we help businesses monitor and manage their energy and carbon with sustainability in mind. Our in-house team can guide you through energy monitoring, carbon footprinting, green procurement and compliance legislation. We are already partnering with leading UK private and public sector organisations – supporting them to transform their operations in line with ambitious targets.

Our aim is to provide you with holistic energy management and sustainable solutions. Helping to carry your business into a green future.

Contact us at EIC for a bespoke net zero roadmap for your organisation.

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What does the proposal include?

Currently, large commercial buildings are required to display an Energy Performance Certificate (EPC) only if their total useful floor area is over 500 square metres, is frequently visited by the public, and an EPC has already been produced for the building’s sale, rental or construction. EPCs measure the building emission rate (kgCO2/m² per year) and primary energy use (kWh/m² per year) for the core HVAC and building fabric assets.

EPCs are valid for 10 years, once an EPC reaches the ten year point and expires, there is no automatic requirement to produce a new one. A further EPC will only be required when the property is next sold, let or modified.

In October 2019, the Government told the Climate Change Committee that it would consult on introducing a new scheme that would rate commercial and industrial buildings based on their actual energy consumption and carbon emissions.

As a result of this, the government launched a new consultation called ‘Introducing a Performance-Based Policy Framework in large Commercial and Industrial Buildings in England and Wales’. This is the first step towards introducing a national performance-based policy framework that aims to reduce energy consumption and emissions.

How does this differ from DECs?

A Display Energy Certificate (DEC) rates public sector buildings over 250m² based on actual energy consumption, so why not simply expand this to commercial buildings? According to the proposal, the new rating framework will look to modernise and go beyond what (DECs) currently offer.

Why the change?

Larger office buildings use over 53% of the energy used by all commercial and industrial buildings. This means that more frequent audits and stricter oversight will help to root out waste and reduce overall consumption. Success from similar policies has already been seen in countries like Australia who reduced consumption by 34% in 10 years with the National Australian Built Environment Rating System.

In this global push for energy efficiency and retrofitting, the UK is falling behind. Since 2016, similar requirements have been mandatory in all non-residential buildings over 500m² throughout the European Union.

What are the benefits of the proposal?

Mandating more frequent energy evaluations will help to identify areas of inefficiency or, at the very least, raise awareness around energy consumption. While retrofitting the UK’s predominantly old building stock is a daunting task, the benefits could be enormous. This initiative alone is predicted to save British businesses over £1 billion annually and reduce carbon emissions by 8m tonnes when completed.

The Government is also considering including waste, water usage and air quality standards. None of these are currently required for either EPCs or DECs, and could lead to further cost savings for businesses.

How can EIC help?

The government plans to introduce the new rating system in 3 phases over the 2020s. The 1^st phase is aimed at the office sector and has been planned to start in April 2022. EIC helps its clients stay informed and prepared for policy shifts such as these. In a net zero economy, staying ahead of the curve will be crucial to business resilience and growth.

As emission reduction targets become more important, energy reporting will become an essential part of managing a successful business or property. EIC can help you stay compliant with fast-changing legislation by streamlining and simplifying any and all of your energy admin. Our energy specialists have extensive experience with EPBD requirements including DECs, EPC and TM44 certification. We can go beyond mandatory reporting and certification to ensure you are as sustainable and energy-efficient as possible.

EIC can help you stay ahead of the curve. To find out more contact us today.

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How does the UK ETS work?

The UK was influential in the design of the EU ETS. So, it came as no great shock that when the UK ETS launched in May 2021, it looked very similar to its predecessor.

The system still works on the ‘cap and trade’ system. This means that a cap is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. The cap is reduced over time so that total emissions fall in line with the UK’s net zero target.

This cap is converted into tradable emission allowances. For each allowance, the holder has the right to emit one tonne of CO₂ (or its greenhouse gas equivalent). After each year, large energy users must give up enough allowances to cover all their emissions or face a fine.

What does it mean for companies that apply?

Facilities with installed combustion equipment above the 20MWth threshold are required to monitor and report their emissions each year. They then must surrender allowances to cover their reported emissions.

A portion of allowances will be issued for free to eligible installations (typically energy intensive industries or aviation). This follows the same approach as the EU ETS. If they are likely to emit more than their allocation, companies can take measures to reduce their emissions or buy additional allowances.

If a company decides to reduce its emissions, it can keep the spare allowances to either use the following year or sell them on. In this way, the ETS helps to monitor emissions from energy intensive industries and incentivises carbon conscious strategies. And it’s been a successful driver of reductions. Between the launch of the EU ETS in 2005 and 2019, emissions from installations covered by the scheme have declined by about 35%.

This is promising progress for the fight against climate change, and the UK ETS is expected to be even more ambitious in readjusting its cap. This will mean tighter restrictions on emission reductions in future carbon reporting, especially for big energy users.

How can EIC help?

EIC has a team of dedicated Carbon Consultants and Data Analysts who provide an all-encompassing UK ETS service. We provide you with guidance and support: interpreting complex legislation and keeping you up to date with any policy shifts. You will be assigned a dedicated Carbon Consultant who will help you navigate the reporting and compliance process with ease.

Our in-house carbon team has extensive experience with reducing energy consumption, costs and emissions for our clients. This means we can keep you ahead of the curve and prepare your business for future reporting requirements.

To learn more about how EIC can help you with reporting for UK ETS, contact us today.

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The programme focuses on encouraging ‘lifelong learners’ to extend their opportunities to learn by utilising time within the work-place. This will become a vital factor in the UK’s pathway to net zero. For a company to reduce energy, costs and environmental impacts, education and teamwork is vital. While utilising renewable energy sources continues to fast track us towards our net zero targets, continuing to educate ourselves allows us to understand the world around us and what it needs to survive.

We take a look at what the national campaign consists of, how it can help in the long term and how EIC can assist you in learning at work.

What is learning at work week?

Learning at work week is an annual event that spotlights the benefits of learning within the work-place. Running from the 17^th-23^rd of May, the campaign aims to stimulate curiosity and deepen connections with colleagues.

This year’s theme is ‘Made for Learning’, which has been split into three strands; human = learning, human = curiosity and human = connecting. The campaign works to show that education can carry on at any age, in any place, and that there is always more to learn. The organisers of the campaign offer several online events and activities, from creative pursuits to numeracy challenges. They are also encouraging work places to set their own educational goals depending on their individual teams.

The highly celebrated week is also the perfect time to teach staff about the importance of sustainability. Following the announcement of net zero targets by many countries across the world, the focus on a green future has never been more prominent. Schools, colleges and universities are working environmental studies into their daily syllabus, so why not work-places?

Setting sustainable aims and objectives or implementing green initiatives allows workplaces to reduce energy bills at no or relatively low-cost measures. By simply educating staff on the beneficial impacts lower energy consumption could have, businesses can reduce their energy bills significantly.

EIC’s energy saving training

At EIC, we understand that education can play a huge part in paving the way for a sustainable future. Our vast experience in energy management and team training allows us to further educate employees on the importance of efficiency.

Through training in sustainable strategies, energy management and efficiency, we are able to provide our clients with a comprehensive list of educational options. These strategies allow companies to learn more about how to reduce energy usage and expenditure. We are also able to visit your organisation to train your staff (or in house trainer) on site.

Our goal at EIC is to integrate sustainability and smart energy usage into every part of your business. This is why we offer an online energy awareness course that provides education on saving energy and water in the workplace. This information comes in the form of a handy booklet, gives simple and effective ways to save energy day-to-day. Actions as simple as turning off lights when you leave a room or powering down computers overnight can make a significant difference. Whether they are big or small, every sustainable measure is helping to reduce emissions and preserve the world around us.

Some of our other available sustainable services include:

• Assessing your businesses situation
• Monitoring your usage
• Setting goals
• Creating communications
• Measuring and displaying results

Get in touch to hear more about our energy saving training and how we can help you towards your sustainable future.

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Installing onsite power storage can be a simple process and technology breakthroughs have made it a viable and cost-effective option for many businesses. However, the benefits of battery storage go far beyond convenience. Developing an integrated battery solution is an effective way to fully optimise your energy capacity. It can enable businesses to become less reliant on the national grid, reduce CO² emissions, and generate additional revenue for your business.

Reduce your electricity costs

Energy use at peak times can be expensive. Especially as it can have a huge effect on the non-commodity costs that you pay each year. Being able to purchase energy when it is at its cheapest and use it when you need it can make a huge difference to your utility bills.

Until battery technology came along, lowering your energy costs involved turning off devices or lowering usage. Battery storage is a far more flexible solution that offers opportunities outside of small-scale savings. When paired with renewable generation technology it can help you avoid non-commodity costs altogether. Or at the very least, help you avoid higher costs in times of peak demand.

Stabilise your energy supply

Having your own storage batteries guarantees a continuous source of power regardless of what is happening to the network. This reduces your reliance on the grid, protecting you from blackouts and local technical faults as well as securing a reliable energy supply.

Get paid to help balance the grid

With battery technology, energy can be stored for later use or sold back to the grid for additional revenue via potentially lucrative demand-side response (DSR) schemes. By becoming a demand-side supplier you are helping to balance the system and smooth out peaks in demand. This sort of initiative is a fundamental part of the government’s ongoing energy strategy. And further similar opportunities are likely to follow as we move towards 2050.

How EIC can help you store power

If your business could benefit from lower energy bills and a more stable supply, a battery setup could be the ideal solution. At EIC, we provide guidance on the installation of onsite generation and power storage.

While these systems can have great benefits on their own, the returns are even greater when working in tandem with other technology. We can offer energy management services that help improve your efficiency and further lower your expenses. If you would like more information on battery technology and want to explore your options, get in touch today.

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Without the correct knowledge, businesses risk prioritising superficially appealing demands to satisfy conscious consumerism. But as businesses around the world pledge to sustainability, indications of greenwashing can often go unnoticed.

Persistent greenwashing can undermine the importance of sustainability. As a consumer, trying to identify eco-friendly brands can be challenging enough. And with added greenwashed businesses, this task can feel overwhelming and next to impossible.

So, what is greenwashing and how can businesses avoid it?

What is greenwashing?

Coined in 1986 by environmentalist Jay Westerveld, ‘greenwashing’ refers to misinformation provided by a business to falsely present itself as environmentally friendly.

More often than not, greenwashing happens due to a lack of knowledge. While sustainability continues to become a more prominent topic of conversation, so does the pressure to comply. This means companies are increasingly keen to exhibit their sustainable credentials, even if they don’t have environmental expertise.

Greenwashing often distracts from significant environmental issues such as climate change and pollution. It can also misdirect environmentally conscious customers towards dis-ingenuine products. This is because it can be hard to differentiate between well intentioned businesses with those that are performatively green. ‘The six sins of greenwashing’, is a list of indicators that can help consumers spot a business that has been greenwashed.

The six sins of greenwashing

No proof: Claims made about a lessening of a businesses environmental impact are not verified by third party certifications.

Vagueness: Broad, insubstantial or convoluted claims such as ‘all natural’, ‘made with recycled materials’ or ‘eco-friendly’, with no further information.

The hidden trade-off: Marketing a product or service as ‘green’ by a narrow definition that disregards other environmental impacts. An example of this was fast food chain McDonald’s switch to paper straws. Although consumers may have welcomed this change initially, it was soon revealed that these straws were still unrecyclable.

Irrelevance: Although the claim may be true, it is unrelated to the company or product.

Lesser of two evils: Touting one good sustainable aspect of the business while ignoring greater environmental harm.

Fibbing: The sin of outright lying, this was seen very clearly in the case of the Volkswagen scandal of 2015. The car company admitted to cheating emissions tests by fitting defeat devices to vehicles in question. This allowed the company to use proprietary software to detect emission tests and in turn reduce levels. Whilst they were knowingly greenwashing their products, in reality they were releasing 40x the permitted limit of nitrogen oxide pollutants.

How can businesses avoid greenwashing?

In the run up to the UK’s net zero commitments, it is within everyone’s interest for businesses to become truly sustainable. Switching to renewables, incorporating low carbon tech and educating staff are some of the ways that businesses can avoid accidental greenwashing.

To promote a sustainable ethos, a business must first achieve sustainability goals. Providing customers with complete transparency not only reassures them of your reliability, but also allows for a wider range of potential clients.

Delivering real change is essential in moving towards a green future. While greenwashing allows businesses to pull in revenue in the short term, it will have serious consequences further down the line.

How can EIC help?

At EIC we prioritise sustainability and transparency. Our expert team are on hand to help your business become as green as possible.

Years of experience allow us to identify the best areas of savings for your business. We believe the future is sustainable and we are dedicated to getting our clients on the right path towards it.

Get in touch to hear how we can help you begin your sustainability journey.

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Environmental awareness days are often marked with a social media post and quickly forgotten. But businesses that embrace real sustainability all year can enjoy significant financial and reputational benefits. As the UK transitions to a net zero economy, this will only become truer.

Companies with ethical and environmental strategies are already favoured by consumers and investors. This makes a sustainable strategy essential for securing future funding as well as growing and maintaining a loyal customer base. Not to mention, energy efficiency and clean energy solutions can provide valuable savings to facilitate further stability along the way.

This Earth Day, why not use the momentum to embark on your sustainable journey? Here are a few ways to celebrate the planet and ensure a green future for your business.

1.  Make a commitment

Companies and communities across the UK are pledging to reach net zero emissions by as early as 2030. This is largely due to recent shifts in policy that have made carbon monitoring and reporting an inevitable part of business practices. Climate-related risks are also beginning to play an important, even mandatory, role in investment decisions. This means large companies will have no choice but to reduce their environmental footprint.

What better day to announce your businesses commitment to net zero than Earth Day? EIC can help your organisation navigate the path to net zero from your initial carbon footprinting onwards. Our team of energy specialists streamline complex energy admin, carbon compliance, and give guidance on clean energy solutions. We go beyond what is mandatory to integrate sustainability into the core of your business.

2.  Embrace small changes

If your business is not ready to commit to a net zero target, there are numerous small changes you can make to save money and reduce your environmental footprint. Simply switching to LED lights can result in significant costs savings, especially for big energy users with extensive office or retail space. This and other efficiency solutions offer emission reductions that will prepare your organisation for future carbon reporting requirements.

Waste management is another important small but impactful change, as is water efficiency. Taking control of your utilities and ensuring there is as little unnecessary waste as possible is the first step towards sustainability.

3.  Switch to green energy

As companies and councils continue to join the race to net zero, energy suppliers are offering more green procurement options. There are different types of energy contracts in various shades of green, and choosing one can be a complex process.

If you are taking this Earth Day to switch to greener energy, EIC can help. Our procurement specialists can help you choose the contract that is right for your organisation and your net zero goals.

4.  Get smarter

Data gathering and analytics is the future of energy management. Smart energy monitoring and building control systems identify areas of inefficiency and waste. And enable you to make changes in real time. This technology is already becoming widely used to help businesses of all sizes control their costs and reduce emissions.

Make a real, impactful change this Earth Day by taking control of your utility usage. Our sister company, t-mac, offers next-generation metering, monitoring and controls solutions. These enable clients to manage their assets and energy consumption in real-time via a single platform.

“By working with t-mac we were able to identify that our immediate solution was to scrutinise the use of in-store equipment to save energy and carbon. Using t-mac’s expert advice and assistance we were able to implement a control strategy and immediately benefited from the energy reduction. To date, we’ve chalked up a substantial reduction in energy usage and carbon emissions across the 1,600 UK branches. We’re confident that the system will continue to be a winner, saving carbon and cost for years to come.” – Nick Eshelby, Director of Property Services at Ladbrokes

5.  Make it a team effort

Making structural changes to your energy portfolio is key. But genuine sustainability requires action on every level. Getting employees involved can help your sustainable efforts and also boost morale.

In August 2020, Reuters commissioned Censuswide to survey 2,000 UK office workers about workplace culture and environmental ethics. Of those surveyed, almost two-thirds (65%) said that they were more likely to work for a company with strong environmental policies.

This proves the rising interest in climate change and social equity is impacting peoples expectations of their employers. And as younger generations enter the workforce, this will only become more prevalent.

This Earth Day, ensure employees are aware of your commitment to environmental action by getting them involved in your sustainable business strategy. One way to do this is through EIC’s staff energy awareness training, which teaches employees how to reduce energy usage. By helping your employees understand how they can improve energy efficiency at work, they’ll learn how to cut their usage and costs at home too, which is great news for the environment.

How can EIC help?

At EIC we celebrate Earth Day every day by leading clients towards a more sustainable energy future. Our in-house team can guide you through energy monitoring, carbon footprinting, green procurement and compliance legislation. Our aim is to provide you with holistic energy management and sustainable solutions that build a green and resilient foundation for your organisation’s future.

To learn how our net zero services can help your business, contact us at EIC today.

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Regulated by The Environment Agency, the mandatory compliance scheme aims to ensure that big energy users are working as efficiently as possible. Businesses that qualify for the scheme must have compliance plans in place to avoid fines and civil penalties.

The first step towards assessing an organisation’s carbon footprint is to conduct an energy audit. Energy audits assess total consumption within a business including buildings, industrial processes and transport usage. This is also crucial for understanding where a business could save money through energy conservation.

Who qualifies for ESOS?

ESOS is mandatory for large UK organisations that meet one of more of the following criteria:

• Employ at least 250 people.
• Have an annual turnover excess of €50 million and an annual balance sheet excess of €43
• Are part of a corporate group containing a large enterprise.

Businesses that qualify must carry out ESOS assessments every four years. While fines differ from case to case, they can include an immediate £50,000 fine or £500 per day for up to 80 working days. Businesses who refuse to comply also run the risk of having their information published online.

What are the benefits of ESOS?

You may be thinking, why should I start thinking about phase 3 so early? Starting work towards phase 3 now means you are able to explore different options before deciding on the perfect one for your business. Becoming more energy efficient now will also mean environmental and financial benefits in the long term.

The two most significant benefits of ESOS lie in the reduction of carbon emissions and lowering of energy bills. If approached correctly, ESOS could bring benefits for both the business in question and the environment, in the form of cost effective savings.

ESOS has been predicted to deliver a total of £1.6 billion in savings to UK businesses between 2015 and 2030. Some of the most common areas in which savings are found include lighting, air conditioning and metering. EIC can also provide intelligent procurement: further simplifying our client’s energy management and reducing their utility costs.

Putting off compliance plans may also leave you vulnerable to price increases. Phase 1 of the scheme more than 40% of businesses were still not compliant 4 months after the deadline. If this were to happen again, in excess of 2,800 firms would be fined and in turn suppliers would be forced to raise their prices again. By identifying areas of carbon reduction, ESOS can also improve your Streamlined Energy and Carbon Reporting (SECR) narrative. While they are separate schemes, information gained from ESOS can be used to manage energy efficiency in annual reports.

How can EIC help with your compliance needs?

Our carbon team have extensive experience with complex compliance legislation and are dedicated to helping you reach deadlines efficiently. Our Lead Assessors and highly trained Auditors are on hand to assist you throughout your compliance process.

We have assisted over 550 clients with their ESOS journey, and in doing so have identified 4.65 million tonnes worth of CO2 savings. This has meant that our clients have avoided approximately £80 million worth of fines over phase 1 and 2.

Whilst balancing other jobs and responsibilities, schemes may seem like a hassle. Fortunately, EIC can help turn that obligation into an opportunity for your organisation.  Get in touch to find out how we can help you start your compliance journey.

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Every business uses electricity but smaller companies and low level energy users can often handle short outages. Unfortunately big energy users are not so lucky. While solar and wind can be powerful contributors to the grid, they can’t meet all our energy needs. To decarbonise energy-intense industries such as industry or aviation, the development of hydrogen and nuclear is essential.

How does fusion work?

Unlike nuclear fission which splits an atom to release the energy and heat we need for electricity, fusion does it by combining two atoms. Under intense heat and pressure, two positively charged hydrogen isotopes are forced together to create a heavier element.  This releases the same heat and energy we see in fission.

While the process is more complicated than fission, the end result is far safer and more sustainable. It produces almost no radioactive waste material and if the system gets overwhelmed it shuts down automatically so there’s no risk of a meltdown. Not to mention, it is 25% of the cost of nuclear and half the cost of wind energy.

Fission power is fuelled by uranium which is mined, refined and remains dangerous for thousands of years after use. The fuel for fusion power is deuterium. This is found in seawater and the earth has a near limitless supply.

Fusion power promises clean, reliable energy and a consistent output day or night whatever the weather. Renewable power will certainly remain a key part of the plan but with the help of fusion power, we could completely eliminate the use of coal, oil and natural gas.

What is the problem?

Currently, efficiency is the big issue. Existing reactor designs have struggled to produce more electricity than they require for operation. This is mostly due to the scale of the designs and the fuel used for testing. Scientists have been working on the project for decades but lately, a lot of progress has been made. Current research aims to have a functioning, economically viable fusion reactor online by 2030.

The progress of this technology is often compared to the advancements made in microchip design. The processing power of a microchip doubles every year, (following a principle called Moore’s Law). Fusion research has followed a very similar trend.

If progress continues at the current pace, scientists hope to meet their targets and bring fusion into the fight against fossil fuels.

What do we do until then?

The main problem with nuclear fission reactors is the cost. Taking an average of 6 years to build and costing billions of pounds they represent a big commitment. Fortunately, we don’t have to wait until 2030 for the next advancement in energy technology. Small modular reactors and hydrogen fuel are getting ready to bridge the gap.

Small reactor, big energy

A popular option amongst energy researchers today is the Small Modular Reactor (SMR). These portable, self-contained reactor buildings are designed to be mass produced so they can be plugged into a power facility to generate electricity. Once used up, they would be returned to the manufacturer or moved into deep storage. SMR technology has made great progress in the last year and researchers hope to have a working model online in the next 5 years.

Hydrogen fuel

Nuclear power stations can also generate the temperatures required for the production of hydrogen fuel. The market for hydrogen has been growing steadily and is likely to maintain this trajectory in years to come. While not as energy dense as most fuels, hydrogen is more efficient than current battery technology and could greatly benefit the growing electric car market.

Where does EIC come in?

EIC are passionate about cutting edge technology. We regularly explore all the latest advancements and choose the best options for our clients. While fusion power may not be an immediate solution, the future for clean energy looks bright.

At EIC, we can help you manage your energy needs and ensure you meet your emissions targets. Our bespoke services can transform your energy strategy and integrate sustainability into the foundation of your organisation.

From procurement to onsite generation, we can help you find the most efficient and cost effective green energy solutions for your business. To learn more about working towards a clean, efficient energy future, contact us at EIC.

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EIC hit all three Triads with only 14 Red alerts issued.

There was an increase in the number of Triad calls this year with 24 alerts issued in total. This compares favourably with other suppliers who called an average of 30 alerts across the Triad period.

Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads. If consumers are able to respond to Triad alerts by reducing demand then they will be able to lower their final transmission costs.

First increase in peak demand for 6 years

This winter saw the first increase in peak demand since 2014/15 and the largest year-on-year increase since 2007/08. There are a number of factors which contributed to this including lower temperatures, a reduction in demand-side response and an increase in domestic consumption. While peak demand increased from last winter, average demand decreased by around 2%.

The rise in coronavirus cases at the start of the winter led to the Government imposing further lockdown measures. This led to a reduction in the number of businesses reacting to Triad calls and reducing demand at peak times. Our analysis has suggested there was up to 1GW less demand-side response than the previous winter. The lockdown also signalled a return to home schooling and working from home which subsequently increased domestic consumption. This increase was mainly driven by lighting and heating which are typically less efficient in homes than in schools and businesses.

The trendline below shows that weekday peak demand over the Triad period increased by an average of 0.5GW for every 1°C decrease in average temperature. Some of the variation in the graph can be explained by the two national lockdowns that were in place over most of the Triad period. Our analysis of the temperature-corrected data has shown that peak demand increased by around 4-5% once lockdown conditions were lifted in December. This coincided with a drop in temperatures leading to the first Triad on 7^th December.

Cold January leads to increase in demand

The Triad season started with long periods of mild weather during November and most of December. Temperatures fell after Christmas which led to the coldest January since 2010 and the second coldest in the past 24 years. This is in stark contrast to January 2020 which was the second mildest in the past 30 years. Across the Triad season eight weekdays had an average temperature below zero, all of these occurring after Christmas. This compares to none the previous winter and only two for the 2018/19 winter.

The graph below shows that the first Triad fell on the only day before Christmas with an average temperature below 2°C, while the second and third Triads occurred during longer cold spells during the start of January and February. Wind generation continued to have an impact on peak demand as embedded generation is not connected to the grid and is instead seen as a drop in demand. All three Triads occurred on days when wind generation was less than 5GW as the drop in demand from embedded wind generation was reduced.

TCR Final Decision

In December 2019 Ofgem published their final decision on the Targeted Charging Review (TCR), although the implementation date has since been delayed by a year due to the coronavirus pandemic. The main outcome of this decision is that from April 2022 the residual part of transmission and distribution charges will be levied in the form of fixed charges for all households and businesses. This means that there is one final chance for consumers to benefit from Triad avoidance over the 2021/22 winter period.

The TCR aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action it is likely that their future costs will rise.

Impact on Consumers

The graph below shows the average % change in DUoS and TNUoS costs across each region and meter type as a result of the TCR. Our analysis has found that most half-hourly (HH) sites will benefit from a fall in costs, however most domestic and non-half hourly (NHH) sites will see a small rise in costs. Southern areas will typically benefit from a larger decrease in costs than northern areas.

Consumers currently taking Triad avoidance action are likely to face an increase in TNUoS costs from Apr-22 as the effect of Triad avoidance is removed. Likewise, sites that have a capacity level set too high will also not benefit from the same level of cost reductions shown below as they are potentially placed in a higher charging band.

How EIC can help

With the confirmation that from April 2022 residual charges will be calculated using a capacity based methodology, now is the perfect time to undertake a capacity review on all of your HH sites. EIC’s Capacity Review service is a fully managed end to end offering. We undertake detailed analysis for each of your sites, outline potential savings and offer clear advice on what action you should take. If we find that your capacity can be reduced by more than 50% it may also be possible to apply for a charging band reallocation which could significantly cut your future DUoS and TNUoS charges.

EIC can also help you accurately budget and forecast your energy prices with confidence with our Long-Term Forecast Report. Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. The Long-Term Forecast Report is a valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend over the next 5, 10, 15 or 20 years. This allows you to confidently forward budget and avoid any nasty surprises. Whilst we can’t prevent the rise of non-commodity charges, we can ensure you are fully prepared for the increases.

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Fortunately, there are many benefits to embracing corporate sustainability beyond ticking boxes. An organisation’s green credentials will only rise in value as the UK races towards its net zero target. Not to mention, at the heart of decarbonisation and sustainability is energy efficiency, which can uncover considerable cost savings.

There are various forces driving corporate sustainability, including a shift in consumer behaviour, policy changes and more ambitious government targets. These forecast a more permanent transformation in the business and finance sectors.

The race to net zero

The real fuel behind the environmental movement at the moment is the global race to net zero. Over the past year, the UK government has introduced new policies and plans to achieve net zero emissions by 2050. This includes new energy efficiency standards, increased renewable generation, hydrogen development, and a ban on petrol vehicles from 2030.

What is clear is that the green wave is coming.  To stay competitive, businesses will have to create sustainable strategies that prepare them for a net zero economy.

EIC can be your partner in this journey, from the first energy audit through to accreditation. Along the way, we help manage all your energy admin and take the stress out of complex carbon legislation. The path to net zero can be difficult to navigate, but our experienced in-house team of energy specialists provide end-to-end simplification. Giving you peace of mind, and your organisation a green, resilient future.

The Task Force on Climate-related Financial Disclosures (TCFD)

In November 2020, Chancellor Rishi Sunak announced plans to make alignment with the TCFD guidelines mandatory in the UK. This will apply to most sectors of the economy by 2025 including listed companies, banks, and large private businesses.

The Task Force on Climate-related Financial Disclosures was established in 2015 by the international Financial Stability Board. It is based on the growing consensus that climate change has immediate effects on economic decisions.

This new step towards mandatory transparency will require a more holistic view of a company’s environmental footprint. It also confirms that investors are growing more aware of climate-related risks and are putting more faith in organisations that plan ahead. For this reason, it can be beneficial for organisations to follow TCFD guidelines, whether they are obligated to do so or not.

Impact investing and the rise of ESG

Environmental, Social and Governance strategies are not new to the corporate sector, but they have become more important in recent years. Now with a heightened focus on climate change and social justice, ESG is becoming essential for securing future investments.

This goes hand-in-hand with the rise in impact investing, which goes beyond mitigating risks and asks – how is your organisation positively impacting the planet? This trend has seen a rise in companies with social or environmental missions.

Why choose true sustainability?

The rise in climate action has led to some companies ‘greenwashing’. This is essentially when a company markets themselves as being ‘green’ without taking real action to reduce their environmental footprint.

There are many benefits to genuine environmental sustainability. The most important being an organisation’s longevity in a changing market.

If the recent shift in policy and finance has taught us anything it is that total transparency will be essential in the future. While ‘greenwashing’ may have some rewards now, it is poor preparation for a net zero economy. And though it may be cheaper in the short term, organisations that are ignoring their energy efficiency are missing out on significant long term savings.

Why choose EIC on your journey to net zero?

At EIC we know that building an environmentally and ethically sound business is not only the smart thing to do, it is the right thing to do. Our in-house team can guide you through energy monitoring, carbon footprinting, green procurement and compliance legislation. Our aim is to provide you with holistic energy management and sustainable solutions that boost your green reputation and financial savings.

Contact us at EIC for a bespoke net zero roadmap for your organisation.

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The world’s industry sector generates one quarter of global GDP every year, as well as a significant percentage of jobs. However, industry also makes up a staggering 24% of global energy related carbon emissions. It is for this reason that the decarbonisation strategy is vital in championing a sustainable industrial future.

The strategy aims to cut two-thirds of emissions by 2050, meaning a 90% cut in comparison to 2018 levels. In addition, three megatons of CO2 are expected to be captured from industry by 2030. If this is achieved, the UK would become an international leader in industrial decarbonisation and manufacturing of low carbon products. But what does this mean for big energy users?

How will the decarbonisation strategy impact big energy users?

Carbon pricing

A carbon pricing tool will be introduced that helps assist businesses take account of their emissions by providing them with investment decisions. These measuring tools could potentially save businesses £2 billion in annual costs.

This project will ensure that businesses are maintaining the correct policy framework in switching to low carbon products. New product standards will also ensure that manufacturers are able to clearly identify their products as low carbon.

Financial benefits

It is imperative that this green revolution comes with economic benefits. Through greater energy efficiency, it is predicted that businesses will be provided with commercial opportunities and the chance to save on costs. These opportunities will be available across not only the UK, but global market.

Transforming industrial processes to include low carbon technology will benefit businesses tenfold. Significant costs will be saved on raw materials following a push for more sustainable practices, such as 3D printing and AI. Following the economic downturn created by Covid-19, finding a green recovery for the economy is vital.

Green links

The revamped decarbonisation strategy is heavily linked to the Industrial Decarbonisation Challenge, in which nine green tech projects will receive a cut of a £171 million grant. Announced last year as a £139 million project, the budget was further raised once the winner’s projects were announced. This challenge was created to support low carbon innovations across nine regions in the UK including Scotland, South Wales, Humber and Teesside.

As part of the Public Sector Decarbonation Scheme, £932 million has already been granted to 429 projects across England. This will fund low carbon heating systems such as heat pumps and, solar roof installations.

The strategy has also seen the emergence of the Infrastructure Delivery Taskforce, otherwise known as ‘Project Speed’. The taskforce will ensure that land planning is fit for low carbon infrastructure. This project will focus on delivering infrastructure that is quick, efficient and sustainable. It could also generate over 80,000 green jobs.

How can EIC help?

At EIC, we provide businesses with comprehensive energy management, as well as next generation energy technology. Our in-house services range from green energy procurement to onsite solar instalment and battery storage.

On the journey towards net zero carbon emissions, it is imperative that the economy has a sustainable Covid-19 recovery. By championing both efficiency and self-sufficiency, EIC are dedicated to finding the most suitable and sustainable solutions for your business. Get in touch to learn more about how EIC can help your business work towards a profitable and environmentally friendly future.

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This is because the energy audit and reporting involved in carbon compliance can gather valuable data. This can then help to unearth hidden financial savings by highlighting areas of inefficiency and waste. Not to mention, sealing those leaks to reduce carbon emissions.

So, while it is often seen as a tedious piece of admin, SECR can help organisations prepare for the UK’s transition to a net zero economy. Smart energy management can also help to build a resilient foundation for any future business.

Here are some of the hidden benefits businesses are privy to if they make the most of SECR.

Getting more out of your energy audit

If your organisation falls within the scope of SECR, your energy and carbon reporting is already a priority. But the data collected has value far beyond mandatory compliance.

Submetering and monitoring provide a window into the performance of your building. Helping to pinpoint any weaknesses and inefficiencies in your systems. This holistic view of your energy use and carbon emissions can help you build a smarter, data-driven sustainable strategy.

With the next-generation technology available today, you can go beyond the data and incorporate smart controls. Our sister company, t-mac, offers Building Management Systems (BMS) that enable real time insights with IoT technology. For big energy users, this is an invaluable energy management tool for streamlining carbon compliance processes.

Ignoring this data after the initial report would mean that you risk wasting time and money on energy admin. It would culminate in nothing more than standard compliance.

Preparing for future Scope 3 reporting

Currently, organisations are mandated to report on only scope 1 and 2 emissions.

Scope 1: Direct emissions from company operations such as company vehicles or factories

Scope 2: Indirect emissions from company operations such as purchased electricity generated by fossil fuels

But it is a long road to net zero, and scope 3 emissions will likely become a part of mandatory reporting before 2050.

Scope 3: Indirect emissions from company supply chains such as shipping, business travel, and raw material extraction

By making the most of your current reporting you can prepare your organisation for future compliance. This gives you an advantage over your competitors and helps mitigate any risks, and costs, involved in last-minute reporting.

Boosting your green credentials

Businesses are waking up to the rapidly evolving corporate landscape and the growing focus on transparency. With climate change now being widely recognised as a global challenge, it is clear that every industry will have to innovate and adapt. Any organisation’s growth and longevity will increasingly rely on its levels of sustainability and environmental, social and governance. Both at a leadership level but also embedded in the corporate identity as a whole.

SECR compliance spans areas like energy management, sustainability, and financial reporting. This challenge can be transformed into an opportunity by establishing open communication between teams and forming a more cohesive SECR team.

When EIC helps a client navigate complex carbon legislation, we go beyond compliance. By establishing a long-lasting sustainable strategy for your team, we help to incorporate green values into every part of your corporate identity.

Beyond compliance, genuine sustainability will become an expectation among employees, customers and stakeholders. While greenwashing is widespread now, with companies cashing in on the climate-friendly trend, this won’t be an option for long. With transparency made mandatory and rising interest from the general public, companies will struggle to hide their skeletons.

SECR can help you begin your sustainable journey by rallying your team around your environmental mission.

How can EIC help?

At EIC, we provide businesses with end-to-end guidance and support for carbon compliance including EPBD, ESOS and SECR. Our dedicated carbon consultants have supported over 300 organisations, many of them are big energy users with complex energy admin. Our goal is to simplify and streamline your energy management from utility connections to net zero guidance.

If you want to understand how to put the findings from your SECR reporting to good use or need to begin the reporting process, contact us at EIC today.

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Step 1: Register

The first step is to register your requirements with the relevant parties. This is a good time to reach out to an energy specialist at EIC. We will guide you through the process, answer your questions and translate the technical jargon.

Step 2: Gather information

Moving forward, we will need some details including an idea of your estimated energy usage and your Meter point numbers. For electricity, you will need the Meter Point Administration Number (MPAN) which you can get from your local electricity distributor. For gas, you will need the Meter Point Reference Number (MPRN). For this, simply call the MPRN enquiry line. Alternatively, you can get this information from any bills you have received if it’s an existing supply.

If this is a completely new supply, you may not have received these yet, so don’t worry if you don’t have them.

At this point in the process, EIC will send a quote for the new connections service needed. If you are happy with it, we will follow up with a contract and dive in. Our goal is to power up your site or business as quickly and efficiently as possible.

Step 3: Infrastructure plans

Next, infrastructure plans will need drafting. This will mean applications, potential site work considerations, supply contracts and arranging for meter installation.

EIC provides peace of mind throughout this process by liaising with all respective parties and gathering all the necessary technical information. This includes location maps, building layouts, meter positions, and utility loading needs. If there are site works to consider, EIC can help provide temporary builder’s supply. We can also coordinate alteration or rerouting of supply with minimal disruption, and meter removals and disconnections.

Step 4: Gas and power supply contracts

If you haven’t already, it is time to secure gas and electricity supply contracts. Having established relationships with a range of reputable suppliers, EIC can shop around for options that best fit your organisation’s needs. Whether you need a single connection or multi-site rollout, we can manage and deliver your power and gas requirements with ease. All the while, providing necessary updates and ensuring open communication and transparency.

Step 5: Meter Installation

After contacting the meter operator (MOP) to arrange the appropriate contracts, it is time to install meters and power up your business. EIC can simplify every aspect of this process and coordinate the design, planning and installation, upgrade or removal of your meters.

Your metering solutions will help decide the efficiency of your space and requires a thoughtful and comprehensive approach. EIC’s services extend beyond meter installations for new connections. We also provide everything from smart submetering to next-generation energy management systems. These solutions can help reduce energy costs and cut carbon emissions. Helping to build a sustainable foundation for your business from day one.

Once the meters are installed, we will make sure that they are registered and live on the national database.

Step 6: Bill validation

Once everything is up and running, it is time to run final checks and make sure you are not being overcharged. EIC helps to ensure the billing is accurate by confirming the first invoice received from the supplier reflects the agreed contract rates.

If we removed, upgraded or altered meters, we ensure the final invoice received from the supplier reflects the closing or opening meter readings respectively.

Step 7: Rest easy

By entrusting this process to EIC, project managers can now rest easy knowing that they have been provided with the most reliable, efficient and cost effective energy solutions.

Moving forward, a sustainable energy infrastructure will be essential for any growing business, especially as the UK transitions to a net zero economy. EIC can help you implement and use intelligent building strategies to cut your carbon footprint and boost your savings. This includes IoT building management systems, green lighting solutions, and carbon compliance services.

To begin, or boost, your sustainable energy journey with EIC, contact us today.

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The EII exemption scheme aims to help big energy users stay competitive in a global market. Qualifying businesses can claim an exemption of up to 85% of their Contract for Differences (CfD), Renewables Obligation (RO), and Feed-in Tariff (FiT) costs. Providing firm financial footing in a post-Covid economy.

Why was the EII exemption scheme launched?

The UK has pledged to achieve net zero emissions by 2050, which will require a transformative shift towards clean energy across the economy. This has resulted in a variety of government schemes which encourage the rise of electricity generated from renewable and low carbon sources.

This initiative has seen success, with renewables accounting for 47% of the UK’s generation in the first quarter of 2020. And even as consumption dropped in Q2, wind power generated electricity continued to rise due to increased capacity. This upwards trajectory is only expected to accelerate, with promising new renewable energy projects on the horizon.

The levies and obligations funding this growth are initially covered by energy suppliers. But, these costs are passed down to domestic and non-domestic consumers in the form of higher energy bills.

This puts energy-intensive businesses at a disadvantage. Especially when competing against their EU counterparts with lower energy costs. The launch of the EII exemption scheme is a solution to this problem and aims to maintain the UK’s position in the global market.

When was the scheme rolled out?

The original solution to the issue of higher costs for EIIs was a compensation scheme launched in 2016. This allowed big energy users to apply for relief from the energy costs they had already paid.

This was then replaced by the EII exemption scheme, rolled out between autumn 2017 and spring 2018. This change of approach is meant to offer energy-intensive businesses more long time certainty and stability as well as higher cost savings.

Who can apply?

To be eligible for an EII exemption, a business must meet five key requirements.

• The business must manufacture a product in the UK within an eligible sector – the “sector level test”.
• The business must pass a 20% electricity intensity test – the “business level test”.
• The business must not be an Undertaking in Difficulty (UID) – the UID guidelines explain that “an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term.”
• The business must have at least two quarters of financial data.
• The application must contain evidence of the proportion of electricity used to manufacture the product for a period of at least three months.

Learn more about applying for an exemption certificate.

Big energy users who do not qualify for the EII exemption scheme should still be aware of rising energy costs. They should explore schemes such as Carbon Footprinting, Energy Audits, Streamlined Energy and Carbon Reporting (SECR) and Energy Savings Opportunity Scheme (ESOS). These can provide invaluable insight into your environmental impact and routes to improve energy efficiency within your company.

Has Covid-19 had an impact on the scheme?

Covid-19 has thrown various sectors of the UK economy into a state of uncertainty and decline. The energy sector was especially impacted by the fall in energy consumption in the first six months of 2020. And resulted in a subsequent drop in electricity prices. This could make it more difficult to calculate a business’ energy intensity and whether it is “in difficulty”. Because of this, the government will be excluding the period from 31 December 2019 to 30 June 2020 from its assessment of whether a business is in financial difficulty or not.

How can EIC help?

Here at EIC, we support big energy users with the management of their energy, buildings, carbon and compliance. As a result, we’re able to uncover actionable insights that allow you to manage and control all elements of your energy bill on both sides of the meter.

Armed with a comprehensive understanding of government schemes and legislation, we can help turn your frustrating admin into rewarding opportunities. We can navigate complex applications such as that for the EII exemption certificate – saving you valuable time and resources.

Contact us to learn more about how EIC can help your business.

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Fortunately, the UK has set out a sustainable recovery plan focused on fighting climate change and revolutionising the energy sector. This green wave will bring with it a range of challenges and opportunities for big energy users across the private and public sectors.

Looking forward

With COP26 around the corner and a 2050 net zero target to consider, the UK’s decarbonisation efforts have increased significantly. The past year has seen announcements like plans for the issue of the UK’s first green bond, a 2030 ban on petrol cars, and mandatory TCFD recommendations for large businesses. These green initiatives culminated in the highly anticipated new energy white paper which maps out a clean energy transformation. Fuelled by the evolution of technology like AI and IoT, the energy landscape is predicted to be more flexible and transparent than ever before.

However, whilst it’s fairly clear what is on the horizon for the energy sector, there is less certainty around the energy market. Will energy prices continue to recover as demand rises post-Covid? Will the increased reliance on renewables make energy prices more volatile? How will Brexit impact the energy market if at all? And how can big energy users find opportunities in the current uncertainty?

EIC’s ‘2021 outlook for big energy users’ report

Our report outlines the upcoming trends for big energy users and how EIC’s team of energy specialists can help businesses stay ahead of the curve.

Download our ‘2021 energy outlook for big energy users’ report

How EIC can help

The UK’s decarbonisation mission will rely upon a changing energy mix, more flexible energy grids, innovative tech, and widespread improvement of energy efficiency. At EIC we like to offer next generation solutions that help our clients prepare for a green future.

Our sister company t-mac delivers compelling metering, monitoring and BMS controls solutions via our in-house team. This is just one of many innovative services that can revolutionise the way you run your business. Allowing you to manage and control all elements of your energy bill on both sides of the meter.

EIC’s services can transform your wider energy strategy to encompass efficiency and self-sufficiency. We can also guide you through compliance with complex carbon legislation, making sure you are working towards ambitious net zero targets.

To learn more about optimising your sustainability strategy contact us at EIC today.

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What are the scopes?

Reporting on Scope 1 and 2 emissions is mandatory for many organisations. Any ‘large’ company must report if they meet the following criteria:

• 250+ employees
• Turnover more than £36m
• Balance sheets totalling over £18m

As well as reporting the emissions themselves, organisations must show the steps they have taken to reduce emissions over the course of the financial year.

The key distinction between Scope 1, 2 and 3 emissions is how directly they relate to your business operations. Scopes 1 and 2 concern direct emissions made by your organisation. Scope 3 takes a holistic view of business operations, including your supply chain, and how embedded carbon emissions can be reduced throughout it.

Firms have typically avoided reporting on Scope 3 emissions unless required to do so. Yet, they are missing out on a range of benefits afforded by going the extra mile in their carbon reporting.

End-to-end control

Conducting a robust analysis of your supply chain’s carbon emissions can provide insights that would otherwise be unavailable. Such as GHG (Greenhouse Gas) emissions and cost reduction opportunities that exist outside of the organisation.

Generally, sources of Scope 3 emissions provide support to your business without existing directly under your control, however, there are a couple of exceptions.

Scope 3 emissions can include:

• Business travel
• Employee commuting
• Investments
• Leased assets and franchises
• Purchased goods and services
• Transportation and distribution
• Use of sold products
• Waste disposal

While many of these represent elements of a supply chain others can be tackled more immediately. Business travel, commuting, investments, and waste disposal are all subject to the influence of your management team.

Choosing to report means you can engage with sustainability culture across all levels of your organisation. Engagement can include a ride-to-work scheme to encourage greener travel options, divestment from fossil fuels, or taking on a waste disposal contractor that can reduce both your costs and carbon emissions.

Thinking globally

After ensuring that your in-house Scope 3 emissions are under control, it is wise to next look to your supply chain and the environmental impact of your business on a global scale.

Despite not being a direct consumer, your firm still possesses the buying power to influence the behaviour of its collaborators and the power to choose who not to collaborate with based on their carbon profile.

In addition, the data you gather in order to report may highlight potential weak points in your supply chain vulnerable to events like pandemics or climate change. Just last year, we saw Brent Crude, the international standard for oil prices, drop to zero. All because of a sudden and unforeseeable fall in demand triggered by the pandemic, and with suppliers losing millions in the process.

Assessing these factors gives you the opportunity to adjust or replace links in the chain to ensure future resilience. Since Rishi Sunak promised that the UK will be a leader in climate risk disclosure, having a strong Scope 3 dataset will help bolster the confidence of future investors.

It is likely that abiding by TCFD (Task Force on Climate-Related Financial Disclosures) regulations will become mandatory for an increasing number of businesses in the future. Securing Scope 3 data now can give you a head start in the process.

Finally, an understanding of your Scope 3 emissions will empower you to choose suppliers whose priorities align with your own brand. Given that 84% of consumers in 2020 stated that being environmentally friendly is important to them, consistency in brand values is becoming more important than ever.

How can EIC help?

EIC offers expert guidance on a range of compliance processes including SECR for all emissions scopes, as well as consultative services for carbon management assisting routes to carbon neutrality, energy management, UK ETS, CCA, and ESOS.

We will provide you with a dedicated carbon consultant, annual and bi-annual energy and carbon reports, and we’ll completely oversee both the compliance process and any energy audits and evidence collection required.

Since we view the goal of sustainability completely, we also offer packages of complimentary services like ESOS and SECR to encourage our clients to do the same.

To find out if one of these packages might suit your organisation, and how our compliance services can work for you, get in touch.

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Switch to LED lights

LED lighting remains one of the best energy-saving technologies for businesses but even more so during the Christmas period. Estimates show that 1/5 of all UK energy is on lighting. Combined with supporting technology, like movement sensors and timers, you could reduce your lighting bill by over 80%.

Check your heating system

Heating systems, especially boilers, are often a part of a building’s infrastructure before a business moves in. This means that data on their age and running efficiency could be a black hole until they are actively investigated. Check your boiler this winter to see if it requires maintenance or an upgrade to ensure every unit of energy used for heating is done so effectively.

Drop passive energy consumption

Vampire energy use refers to devices and appliances that draw power even when they are not in use. Get a checklist in place as soon as possible. Delegate responsibility for each employee to switch off their devices before they leave. Also, you might use a power strip or two to simplify this process in areas where a lot of devices are in use at once.

Self-reliant buildings

Building management systems (BMS) have seen a bumper of a year thanks to the pandemic and recent lockdown measures. The ability to remotely manage and monitor your utility usage has never been more valuable. Scheduling programs for light, heat and air flow can be integrated into such a system to help support your energy efficiency.

Aside from energy usage, the right BMS can also protect other utilities from the ravages of winter – frozen pipes included.

Intelligent metering

Alongside BMS, a robust metering set-up can provide a more comprehensive view of your utility usage to better inform policy. Using sub-meters in different areas of a site can also give insight into sources of waste or inefficiency. These can then be addressed before they exact a financial toll during the colder months.

Use curtains wisely

As strange as it might sound, curtains can actually provide huge benefits to a business. While open they allow for natural light to fill the office space, so you can dial back on electricity use. Granted daylight is at a minimum at this time of year, but when it gets dark outside, the curtains provide insulation and help retain residual heat.

Draft-proofing doors and windows during the holidays is also a great way to improve heat efficiency on your real estate. Given that SMEs are estimated to overspend on gas heating by as much as 30%, any improvement seems worthwhile. Also, doing this during the Christmas break will minimise disruption for employees.

Building performance

The introduction of widespread EPC use, and its requirement when leasing new buildings, means there is increased pressure to build and maintain better than we have been. However, there’s plenty of reason to go above and beyond EPC guidelines. Improving your insulation, installing double-glazing, or even just draft proofing your premises can yield significant savings on your energy bills.

Onsite generation

EIC has been shouting from the rooftops about onsite generation for years. Could your own rooftops be suitable for solar panels? If so, you could enjoy reduced energy bills and even a passive income stream. As we step closer to net zero 2050, you will be improving your carbon profile as well.

Conduct an energy audit

Like a smart meter, an energy audit will give you a clearer picture of energy usage in your business. Identifying the points of weakness, such as outdated equipment or inefficient behaviour, means you can develop individual solutions that will improve efficiency system-wide.

Make use of gadgets

Tablets use up to 70% less energy than laptops. If you have or are considering a ‘Bring Your Own Device’ policy, now is an excellent time to action it. You might also consider providing these devices to staff given how much energy it could save you.

Rethink your kitchen etiquette

As the temperature drops, making hot drinks and food become more tantalising, your staff kitchen will be working overtime. Domestic kettles are one of the biggest energy drains in homes and the same is true in office kitchens. Put up posters encouraging your staff to be more environmentally conscious. Such as only boiling enough water for the drink they make or filling a flask in the morning that can last the whole day.

Hibernate

The holiday season and continuing Covid restrictions will leave a lot of offices empty. During this time consider putting together a shutdown list. This will ensure non-critical systems aren’t left running and draining power.

At EIC, we have supported businesses in improving their energy efficiency since 1975. We currently manage around 12-TWh of energy for clients each year and provide services to support many of the strategies we’ve outlined here.

We can help you to integrate Smart Metering, Building Management Systems and Onsite Generation into your business. To find out how get in touch.

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Climate-related policy change and litigation are on the rise across the world. It is clear that the involvement of the business sector in reducing global emissions will soon be unavoidable. This means that companies will have to take responsibility for their carbon footprint. Becoming eco-conscious will give a reputational advantage, as well as future security.

There are concerns around carbon offsets being used as a tool for “greenwashing”. This is a term used for a company masking its unethical behaviour with a green veil of traded carbon credits or PPAs. This is a valid concern, and shouldn’t be taken lightly. But as we move further and faster towards a net zero economy, genuine “greenness” will carry more weight.

While there are shades of green when it comes to the carbon market, carbon offsetting projects can facilitate valuable environmental and social projects. The benefits of which can extend above and beyond the initial reduction in carbon.

How do carbon offset projects and credits work?

Every tonne of emissions reduced by an environmental project creates one carbon offset or carbon credit. Companies can invest in these projects directly or buy the carbon credits in order to reduce their own carbon footprints.

Carbon credits are tradeable on the market and can be controversial in how easy they are to attain. However, the concept is the same: a company is more or less investing in a green project in order to balance their own emissions.

Four main types of carbon offset projects

Forestry and Conservation

Reforestation and conservation have become very popular offsetting schemes. Credits are created based on either the carbon captured by new trees or the carbon not released through protecting old trees. These projects are based all across the world, from growing forests right here in the UK to replanting mangroves in Madagascar, to “re-wilding” the rainforests of Brazil.

Forestry projects are not the cheapest offset option, but they are often chosen for their many benefits outside of the carbon credits they offer. Protecting eco-systems, wildlife, and social heritage is significant for companies offsetting their carbon emissions for the corporate social responsibility (CSR) element.

There is some grey area in forestry offsetting. In the past, it has been difficult to distinguish just how much carbon is being reduced through forestry projects. Fortunately, thanks to emerging new technologies, methods of sustainable reforestation and calculating the benefits have greatly improved.

Renewable energy

Renewable energy offsets help to build or maintain chiefly solar, wind or hydro sites across the world. By investing in these projects, a company is boosting the amount of renewable energy on the grid, creating jobs, decreasing reliance on fossil fuels, and bolstering the sector’s global growth.

Take, for example, The Bokhol Plant in Senegal. This project is one of the largest of its kind in West Africa, providing 160,000 people with access to renewable energy. It also saves the government $5 million a year and creates jobs in the region. Plus, the profits from selling carbon credits are often fed back into local community projects.

Community projects

Community projects often help to introduce energy-efficient methods or technology to undeveloped communities around the world. There are many potential benefits to these projects that far surpass carbon credits. Projects like this do not only help to make entire regions more sustainable, they can provide empowerment and independence that can lift communities out of poverty. This means that projects that were, at one time, purely philanthropic can now provide organisations with direct benefits like carbon credits.

For example, the female-led Water, Sanitation and Hygiene (WASH) project in Ethiopia provides clean water to communities by fixing and funding long-term maintenance for boreholes. How does this reduce carbon emissions? Families will no longer have to burn firewood to boil water, which will protect local forests, prevent carbon emissions and reduce indoor smoke pollution. In addition to the health and environmental benefits, the project is managed by female-led committees that provide work to local women.

The Darfur Sudan Cookstove Project replaced traditional cooking methods like burning wood and charcoal often inside the home, with low smoke stoves in Darfur, Sudan. This works to reduce the damaging health effects and emissions of indoor smoke, as well as the impacts of deforestation. This project also employs women in the region and helps to empower women and girls who now spend less time collecting firewood and cooking.

Waste to energy

A waste to energy project often involves capturing methane and converting it into electricity. Sometimes this means capturing landfill gas, or in smaller villages, human or agricultural waste. In this way, waste to energy projects can impact communities in the same way efficient stoves or clean water can.

One such project in Vietnam is training locals to build and maintain biogas digesters which turn waste into affordable, clean and sustainable energy. This reduces the methane released into the atmosphere. And helps protect their local forests which would otherwise be depleted through sourcing firewood.

When and why are carbon offsets used?

Energy efficiency, clean energy usage, and sustainable business strategies can be very effective in reducing an organisation’s emissions. But there are various scopes to the greenhouse gas emissions that organisations must consider.

Scope 1: Direct emissions from company operations such as company vehicles or factories
Scope 2: Indirect emissions from company operations such as purchased electricity generated by fossil fuels
Scope 3: Indirect emissions from company supply chains such as shipping, business travel, and raw material extraction

Completely eliminating carbon emissions through mitigation methods is not always possible. That’s where carbon offsetting comes in.

How can EIC help reduce your carbon footprint?

It is important to take steps to reduce your carbon footprint as much as possible before considering carbon offsets. Carbon credits should certainly not be used to buy an organisation a clean conscience or create a mirage of sustainability for consumers and/or clients. Carbon offsetting is a valuable tool, and when used to supplement a company’s mitigation efforts, creates a genuinely sustainable and resilient foundation.

At EIC, we offer comprehensive energy and carbon services to help reduce our clients’ carbon footprint in a sustainable way. Our team of experts can help advise on energy efficiency, clean energy solutions, monitoring carbon emissions, and carbon credits.

To learn more about our services contact us at EIC.

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Onsite generation: What do you have to gain?

The immediate boons of onsite generation fall under three categories: energy security, increased flexibility, and a heightened reputation for corporate social responsibility.

Energy security

Energy security can be defined in two ways; the first is the physical security of the resource reaching your business from supply. Fortunately, UK supplies are relatively undisturbed by inclement weather conditions compared with other regions of the world. Despite this, any total loss of energy – no matter how brief – can be costly. This can be avoided by having a safeguard like onsite generation in place.

The second security threat refers more to the commercial landscape than the physical one. Energy wholesale contract prices are subject to change at the best of times. Depending on a variety of factors like peak demand times, supply chain disruption, or, in the case of big oil earlier this year, complete loss of demand.

2018 was a stark example of how sudden and dramatic these price changes can be. In just a six-month period, between March and September, winter electricity contract prices increased by over 40%.

The fact is that the majority of this price hike was due to non-commodity costs like transmission and distribution. These are practically absent when generating onsite, meaning you are less at the mercy of market changes.

Increased flexibility

As with supply security, onsite generation gives you greater control over all aspects of your energy usage. You can scale back your reliance on the grid during high-generation days and, when combined with your own battery storage, even remove your dependence on the grid completely. In a way this gives you the best of both worlds. It removes your attachment to swings in the market but allows you to use the grid as a safety net for low-generation periods.

UK manufacturing has already seen huge gains by combining generation and battery storage technology. A 2018 report from CBS indicated that this sector alone could save over £500m annually by adopting such systems.

Installing your own generation equipment also makes it easier to scale and budget your energy needs as your business grows. Moreover, it improves the value of your business real estate by turning passive roof space into an asset.

Improve your green reputation

Corporate social responsibility is climbing the priorities list of commercial businesses. Onsite energy generation is an excellent way to demonstrate your commitment to reducing your carbon footprint. It also shows your allegiance with a growing section of the energy industry – one that will be centre stage for the global fight against climate change.

Additionally, most UK firms will be required to uphold TCFD standards of reporting the potential risks climate change poses to their functionality. Potential investors will feel confident knowing that you are not only bolstering your own energy supply but actively reducing your contribution to climate change.

Finally, your customers will thank you and new customers will seek you out for reflecting their values. Research conducted in 2020 showed that out of 10,000 global respondents, 50% say they only buy products from brands that ‘try to be eco-friendly’.

Beginning onsite generation and other considerations

At EIC, we provide guidance on the installation and integration of onsite generation into your business model. We recognise the value of such technologies in isolation. However, we also believe that parallel technology working in tandem can release even greater returns for you.

As such, alongside battery storage and onsite generation options we also offer intelligent energy management services. After all, it would be a shame to make savings from your own energy generation and then lose them to inefficiency. To find out more about these services and how they can work for you, get in touch.

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In a recent series of environmental measures from the government, Chancellor Rishi Sunak announced plans to make alignment with the TCFD guidelines mandatory. This will apply to most sectors of the economy by 2025 including listed companies, banks, and large private businesses. This part of the green recovery plan aims to bolster the UK’s position as a global leader for green finance.

“By taking as many equivalence decisions as we can in the absence of clarity from the EU, we’re doing what’s right for the UK and providing firms with certainty and stability.”
– Chancellor Rishi Sunak

Can increased transparency help achieve net zero and a stable green economy? We look at the key points and benefits of the guidelines for the TFCD.

What are climate-related risks?

The Task Force broke down climate-related risks into two major categories:

• risks related to the transition to a lower-carbon economy, and
• risks related to the physical impacts of climate change.

Transition risks include shifts in policy and litigation, market, technology and reputation. Organisations are already seeing this impact with climate-related litigation and policy changes rising. Costs of operation, raw materials, and products are all vulnerable to shifts in policy, technology, and markets. And changes in consumer preferences and customer behaviour must also be taken into account.

Physical risks involve the effects of climate change on the natural world. These are broken down into two categories: acute and chronic risk. Acute risk involves extreme weather events such as wildfires or floods. Chronic risk refers to longer-term shifts in climate patterns. These could affect anything from an organisations supply chain to their employees’ safety.

What are climate-related opportunities?

In light of the potential risks posed by climate change, the TCFD also recommends several opportunities. These are solutions that can reduce risk and provide organisations with long-term stability.

• Resource efficiency: Making your buildings and transportation as efficient as possible by integrating intelligent energy management, reducing water usage and consumption, and recycling.
• Energy source: Implementing the use of clean energy sources through procurement or onsite generation and taking advantage of policy incentives.
• Products and services: Developing low-emission goods or services and/or innovative climate-related products.
• Markets: Having access to new markets and assets and use of public-sector incentives.
• Resilience: Boosting financial and reputational stability by adopting sustainable solutions such as energy efficiency and supporting renewable energy.

What are the recommended disclosures?

There are four recommendations laid out by the task force for disclosures.

• Governance: Disclosure of the board’s oversight on, and management’s role in, assessing and managing climate-related risks and opportunities.
• Strategy: Disclosure of the short and long term climate-related risks and opportunities, their impact on the organisation, and the resilience of the strategy in place to manage those risks and opportunities.
• Risk Management: Disclosure of the organisation’s process for identifying, assessing and managing risks, and how this is integrated into the organisation’s overall risk management.
• Metrics and Targets: Disclosure of the metrics used to assess risks – Scope 1, Scope 2, and Scope 3 greenhouse gas emissions, the risks they pose, and the targets in place to manage risks and opportunities.

What are the benefits of implementing TCFD?

In the future green economy, disclosures like these will be crucial for a company’s sustainability and resiliency. Implementing TCFDs will help companies to identify and assess the risks posed by climate change. They can then address their structural weaknesses and implement mitigation and adaptation efforts to future-proof their business. Organisations that do this will have a competitive advantage over those that don’t when it comes to future funding and investments.

At EIC we are experienced in helping clients mitigate climate-related risks. Through our unrivalled energy management services and cutting-edge technology, we can help with most of the TCFD’s recommendations. From resource efficiency and clean energy to your carbon compliance, our goal is to simplify your sustainability journey. For more information on future-proofing your organisation, contact us at EIC.

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Waste not, want not

David Attenborough has said one thing everyone can do to help save the planet is “don’t waste anything, don’t waste electricity, don’t waste food, don’t waste power”. Unfortunately, this is more difficult than it sounds. Waste is intrinsically wrapped up in the convenience of our daily lives in small but impactful ways.

Thankfully, it’s becoming common knowledge that a wasteful life isn’t a sustainable one, and a wasteful business plan isn’t a profitable one. Since energy is one of an organisation’s largest costs, efficiency is key in building a resilient foundation for the long term success of a company.

Intelligent energy management is a holistic approach to energy optimisation, involving smart metering, identifying inefficiencies and managing energy-saving solutions. At EIC we don’t just find and fix problems, we seek out opportunities that will support sustainable growth.

Data-driven energy optimisation

The energy grid is evolving, and systems will have to adapt as we move towards a flexible energy landscape. Data-driven energy optimisation could be the key to business profitability as well as deep carbon reductions.

Gathering and understanding data through advanced metering provides insight into how energy is being used and possibly wasted. Identifying these areas of inefficiency is essential for finding solutions that reduce consumption and lower costs. This provides businesses with savings they didn’t know were there, a crucial service in uncertain times such as these.

At EIC we offer a range of services that can revolutionise your utilities. From installing sub metering and innovative lighting solutions to our next generation smart building controls. These systems integrate our clients’ critical energy systems in a single, remotely-managed platform. This means businesses can manage their buildings in real-time, saving valuable time, money, and hassle.

How can we achieve net zero through energy optimisation?

As carbon and climate change risk reporting is made mandatory for companies across the UK, reducing carbon emissions will become a top priority. Whilst carbon capture has been a large part of this conversation, energy efficiency cannot be overlooked as a powerful and cost-efficient decarbonisation tool.

“Energy efficiency is not just about saving energy, it’s about tackling economic, environmental and social issues at the same time.” – Harry Verhaar, Philips lighting

If mitigation methods such as energy efficiency were more widely adopted, they could provide stable carbon reductions across the UK. Over time, this would reduce our reliance on fossil fuels as well as future carbon capture and storage efforts. Not to mention carbon offsets and credits which have their varying degrees of ‘greenness’.

This isn’t to say that capturing carbon won’t have a pivotal part to play in decarbonisation. But these methods can’t be solely relied upon as a silver bullet. Especially not when there are mitigation methods that offer businesses sustainable savings and future economic stability.

The whole package

At EIC we offer comprehensive sustainable energy management. Our goal is to completely optimise our clients’ energy usage, going beyond monitoring and finding sustainable, cost-efficient solutions. These services include green energy procurement and exploring decentralised energy options such as onsite solar generation and battery storage.

Generating your own renewable energy supplies in tandem with battery storage can significantly cut your emissions. As well as generate additional revenue through Demand Side Response (DSR) schemes.

We can also help maximise your CO₂ savings and simplify the compliance process so that you don’t get tied up in tricky legislation.

“In this next phase of the energy and carbon markets’ evolution, it will be imperative for UK businesses to get ahead of the legislative curve to maintain and drive profitability. This will mean adopting energy management solutions that pair upstream procurement strategies with downstream optimisation and sustainability strategies.”

Transforming your wider energy strategy to encompass not only efficiency but self-sufficiency will become vital in a recovering economy. And reducing waste of any kind will also be vital in protecting a healing planet. Contact us to learn more about how we can help you build a sustainable future for your organisation.

The post Energy management: a profitable path to net zero appeared first on EIC.

Doubling down

Climate risk disclosure describes a voluntary process whereby large organisations would assess how the effects of global warming could influence their practices and success in the near-midterm future.

The purpose of these disclosures is to better prepare both companies and their investors for unforeseen circumstances due to climate change. On Monday, Rishi Sunak announced a roadmap that would see these disclosures become mandatory for a wide range of organisation types.

This roadmap dictates that the fulfillment of new criteria will arrive gradually over the next five years. The FCA will publish the first set of rules at the end of 2021.

The FCA’s decision most immediately affects financial institutions with a premium listing. It will foster investor confidence as the UK tries to rebuild its economy. Banks, building societies, insurance companies, and occupational pension schemes worth more than £5bn are among the types of organisations affected. They will be expected to provide their reports by late 2022.

The roadmap then stipulates how these requirements will be extended across other sectors leading up to 2025.

The UK is the first G20 country to introduce mandatory climate disclosure and it’s an interesting gambit from the FCA. Obviously, the hope is that investors will recognise the long-term risk of climate change and that the shift will bolster their confidence in UK finance.

If this is the case, the disclosures will advertise the UK as a financing powerhouse despite climate change uncertainties.

“Mandating climate disclosure in alignment with the TCFD recommendations will increase the critical mass of data needed by investors and other stakeholders to accelerate measurement and management of a broad set of environmental issues…”

-Paul Simpson, chief executive of CDP

Green funding and future intelligence

Unlike mandatory climate risk disclosure, green bonds are not a new concept. The UK will be following countries like Germany and Sweden in opening this new avenue for green investment.

The bond becomes available in 2021 as a part of the government Covid-19 stimulus package. The announcement came after vocal support from a group of major UK investors. Collectively, the 30 individuals that lent support for a green bond manage over £10 trillion in assets.

Sunak also announced that the UK would deliver a universal framework for determining the sustainability of different economic activities. The intention is to create objective criteria to judge which projects should be deemed appropriate to benefit from the bond.

The takeaway from both these announcements is that the value of data on carbon emissions and usage continues to grow. Current plans for disclosure only include financial institutions. However, the momentum of action on climate change suggests that more and more companies will need to disclose.

Our metering service can help you build interactive reports on energy usage, as well as identify areas for improvement. Our energy management services include procurement expertise as well as guidance on carbon compliance schemes that can maximise the value of any current or future metering technology you may invest in.

Active engagement with your carbon footprint and its reduction demonstrates a commitment to mitigate climate risk to would-be investors. For further information on these services get in touch.

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We break down what carbon neutral means, why it is crucial in the fight against climate change, and how we can achieve carbon neutrality by 2050.

What does carbon neutral mean?

When we hear the word carbon, we often think of something harmful that needs getting rid of, which isn’t entirely accurate. Carbon, after all, is a part of all living things, and there is a natural cycle that balances the carbon emitted with the carbon absorbed by plants and soil.

The problem is that humans have disrupted this balance by emitting more carbon than can be absorbed. Through the use of fossil fuels, the deforestation of rainforests, massive population growth, overfishing, and harmful agricultural developments, we are essentially poisoning our planet.

Carbon neutral means there’s a balance between carbon emissions and absorption, so to achieve this we have to emit less and absorb more. This can be done through the adoption of renewable energy, carbon sequestration, reforestation projects, and regenerative farming practices. This holistic approach to fighting climate change could put us on a path towards a more sustainable future.

What it means for the energy industry

Achieving carbon neutrality will require action from all sectors of the economy, the most important being the energy industry. Energy production and use is currently responsible for 75% of greenhouse gas emissions in the EU. Large-scale policy will play a large part in propelling the necessary transformation across the energy industry in order to cut and even capture carbon emissions. However, it will take action from every sector within the energy industry, from buildings being made more energy efficient to our energy sources themselves.

This will mean more commitments to renewable energy options in the UK, more efficient utility monitoring and management, as well as improved energy storage options. We will have to move towards an integrated, flexible energy system that exploits local resources and reduces our reliance on imported oil and gas. There are also recent advancements in carbon sequestration and storage that can be joined with energy generation itself which can make zero or low carbon energy options carbon negative.

As with any sector, change in the energy industry requires action on the parts of everyone who produces, invests in, or consumes energy. Every building and organisation can make a difference, and EIC can help.

How EIC is working towards Carbon Neutral

Major changes have to be made in every sector of the economy, from the food we grow to the way we travel. We at EIC are doing everything we can to support the changes needed within the energy industry. By helping organisations monitor and reduce their carbon footprints, navigating tricky compliance legislation, and advising on green energy procurement options, we are simplifying sustainability for businesses.

The post Carbon Neutral: the newest Climate Change war cry appeared first on EIC.

Subsidising Energy Efficiency

Salix Finance is backing the scheme and it combines two major funds. First, the Capital Grant Scheme (CGS) aims to support heat and electricity decarbonisation efforts in certain public sector buildings. The second will help create thousands of jobs within the green development sector.

Under the CGS, public sector bodies can apply for financing for up to 100% of the costs of capital energy-saving projects fitting certain criteria. The criteria are split into four categories, which, in tandem, take a holistic view of decarbonising building heating.

This scheme will act as a non-domestic version of the Green Homes Grant, helping to address the carbon footprint of heating in UK commerce and public bodies.

Since applications to the fund will be subject to Salix’ discretion, organisations must have a robust understanding of their current energy expenses as well as accurate means to estimate the savings they stand to make.

The technologies supported by CGS are all focused on driving down the CO2 emitted in building heating. Naturally, low-carbon heating solutions like heat pumps and heat networks are deemed eligible.

Technology able to reduce heat demand or offset energy from the National grid also qualifies. Solar PV, battery storage, and metering systems fall under this category.

Window closing fast

Organisations can use this fund to subsidise the cost of external support for decarbonisation projects in a variety of ways. This includes the employment of technical expertise in putting together applications for the fund, support for project delivery, and guidance on creating a long-term decarbonisation plan.

However, applications must be submitted by the 11^th of January and any planned projects delivered by the end of March 2021. Organisations should take this timeline into account when considering the scale of any project they wish to undertake.

Four months is a considerably small window for an infrastructural overhaul. That means organisations with a decarbonisation framework already in place will have a head start over those that don’t.

However, that is all moot unless applications are in before the deadline in just over ten weeks’ time. It is important to note that the scheme has been open since September 30^th and that there is no ceiling on how much of the fund individual projects can apply for.

£1bn might sound like a lot, but it is still finite and approvals are on a first-come, first-served basis.

Organisations are already in a race against time and will want to start approaching sustainability specialists as soon as possible.

At EIC, our 360° Strategic Review offers a variety of channels through which you can boost your decarbonisation efforts. Key amongst these is a focus on implementing appropriate infrastructure for your organisation. A comprehensive solution that includes sub-metering, lighting solutions, on-site solar generation and CHP.

For further information on how we can support your decarbonisation journey, contact us.

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In Phase 1 of ESOS, we at EIC identified a total of 527GWh worth of energy savings for our clients, equivalent to £49 million in cost savings. If you act now, you could avoid fines of £90,000 and reap the rewards of a new green plan.

What is ESOS?

The Energy Savings Opportunity Scheme (ESOS) is a mandatory compliance scheme in the UK, derived from Article 8 of the EU Energy Efficiency Directive. ESOS’s aim was to reduce EU energy consumption by 20% by the end of 2020. ESOS occurs in four-yearly phases and introduces regular energy audits that highlight energy savings for large businesses.

Who needs to comply?

Public bodies are not affected. Large organisations that must comply are classified as those with:

• More than 250 employees or
• A turnover of more than £50 million and an annual balance sheet total of more than £43 million

ESOS Phase 2 Updates

The ESOS deadline for Phase 2 was 5 December 2019. Any qualifying organisations who did not complete their assessment and submit a compliance notification by the deadline are at risk of enforcement action. Penalties issued in Phase 1 for compliance failures ranged up to £45,000 with a potential maximum fine of £90,000.

Compliance Notices

ESOS Regulators are currently issuing compliance notices to all UK corporate groups who they believe should have participated but haven’t yet received a notification of completion from.

If you receive this, you must inform the regulators whether you are:

• in the process of completing your compliance, or
• provide evidence you have already submitted your notification, or
• advise that you do not qualify for ESOS

ESOS Submissions

You can find a published list of all businesses who have made a submission via the ESOS notification system as of 1 February 2020 here.

Further evaluation of the effectiveness of energy audits and ESOS can be found here.

ESOS Support

If you need urgent support with your Phase 2 compliance, talk to EIC today. Our dedicated team of ESOS Lead Assessors and highly-trained Energy Auditors will work hard to help you comply as soon as possible, and support you in any conversations with the Environment Agency.

After ESOS Compliance

It’s vital that you don’t let your compliance go to waste. ESOS aims to highlight where companies can make energy improvements, cut wastage and lower costs, use these opportunities to improve your operations and make significant energy savings. The most common areas for energy savings are lighting, energy management through smarter energy procurement, metering, monitoring and controls, and air conditioning.

Reach out

Whether it’s ESOS, SECR, or CCA, EIC will work with you to reach compliance deadlines and targets. Talk to EIC on 01527 511 757 or email info@eic.co.uk if you need any further advice on ESOS or SECR. We’re here to help.

The post ESOS Phase 2 Compliance – Act Now appeared first on EIC.

Public cost, private loss

Due to new and continued lockdown restrictions, 60% of the UK workforce is now performing their roles from home. As a result, commercial enterprises are making significant savings in building utility usage, especially on heating, cooling, and lighting.

Unfortunately, the flip side of that coin is that their employees are now footing larger bills at home. In fact, due to a combination of increased home occupation, and dropping temperatures, energy bills across the country are expected to rise dramatically this winter.

“Energyhelpline.com has predicted a full-time working household will spend an extra £107 on energy due to increased working from home, so it’s important that consumers are on the lowest energy tariff before the cold weather starts to bite.”

Victoria Arrington, spokesperson for Energy Helpline

A recent Carbon Trust report shows that more than 70% of businesses believe that the coronavirus pandemic will lead to a greater emphasis on sustainability initiatives. While corporate social responsibility is clearly increasing, the effect of lockdown on carbon emissions is unprecedented and therefore raises some questions.

As Rishi Sunak’s Green Homes Grant has demonstrated, the energy efficiency of UK housing is sorely lacking. However, there have been new calls for corporate carbon reporting that accounts for the emissions of those working at home. This could force businesses to pick up the tab.

“The coronavirus changes the way we work, so naturally it changes the way companies impact the climate… Firms across the UK must now adjust to this, and we must change the rules on how we report company emissions.”

Amit Gudka, Bulb

Carbon reporting: Over or under

Bulb released a warning to businesses back in June, stating that nearly half a million tonnes of CO2 equivalent may go unreported due to employees working from home.

Ecoact has released a free-source white paper containing formulae for calculating the relative carbon emissions of homeworking. However, this is based on the average expense calculation from Ofgem findings over the past two years.

The problem is that they do not account for the wild variations between corporate and domestic building energy efficiency. As such, they provide an incomplete picture of actual commercial energy usage. The danger is that they may misplace responsibility for some of its costs.

Since the conditions of lockdown are so novel, legislation governing these missing carbon emissions has yet emerged. Will the Climate Change Levy (CCL) take notice for example?

The answer, for now, is unclear. What is obvious though is that commercial firms are on borrowed time to establish a clear data set that can protect them from overpaying for inefficiency that isn’t their responsibility.

The combination of smart metres and a comprehensive invoicing history would be one way to ensure such security. Equipped with this data, businesses could calculate the relative difference in energy consumption pre and post lockdown conditions.

Once a record is established, businesses can then make a case for not paying beyond their normal emissions costs.

Carbon reporting with EIC

EIC provides a comprehensive energy management service that includes Metering and Invoice Validation solutions. Our sub-metering technology allows you to create dynamic and comprehensive reports of your current consumption patterns.

These reports provide a comparative baseline to measure your historic consumption against. Our team can then analyse and validate your records, carrying out over 200 energy checks to guarantee accuracy.

A final word on the CCL, while mandates surrounding work from home emissions remain vague, the CCA still presents an opportunity to save on your own emissions. However, the deadline for new applications is closing fast, and some trade associations require submissions up to four weeks in advance.

Fortunately, EIC also specialises in climate legislation like the CCA and can provide end-to-end guidance and support from the initial submission to evidence collection.

To find out which of these services you can benefit from, get in touch.

The post Paying our way: Carbon reporting during lockdown appeared first on EIC.

If your electricity contract allows it then reducing your demand at these specific points will result in lower transmission charges. However, knowing when Triads occur is a complex business so, to help our clients, EIC provides a Triad Alert service. We have successfully forecast each of the three Triad periods for the last 8 years, saving customers millions of pounds in transmission charges.

Pandemic continues to suppress demand

Winter peak demand is at its lowest point since 1992/93 and is now 14 GW (~24%) lower than the peak of 2010/11. There are a number of factors that have contributed to the fall in peak demand over the past decade. These include improvements to the energy efficiency of appliances, an increase in LED lighting and a rise in embedded generation.

However, in 2020 we can add another significant contributor to demand reduction. The coronavirus pandemic has led to a dramatic fall in peak demand since mid-March. Demand has increased since lockdown ended but is still lower than previous years.

National Grid are currently forecasting peak demand over the Triad period to be around 43-44 GW, slightly lower than last winter’s peak of 45 GW. The winter demand forecast looks to be flatter than previous years, making predicting when Triads will fall far more challenging. It is therefore important to receive Triad alerts from a trusted and reliable source such as EIC.

EIC’s record of Triad season success

EIC has an in-house model which has successfully forecast every triad period for the last eight years. We issue clients with comprehensive alerts advising them when a Triad is forecast, so they can reduce consumption accordingly.

Our Triad Alert Service forecasts the likelihood of any particular day being a Triad and sends alerts before 10am. Businesses can then take action to avoid high usage during these periods, while minimising disruption to everyday activity. We also monitor the market throughout the day and send out an afternoon alert in the event of significant change. The daily report can also help you plan ahead with an overview of the next 14 days alongside a long-term winter outlook.

Calling daily alerts would generate a 100% success rate, however this could have a negative impact on our clients. Organisations would incur major damage to revenues if required to turn down their production each day for 4 months ‘just in case’ and at EIC our aim is to provide as few alerts as possible. Over the 2019/20 Triad period we called just 13 alerts while the average supplier issued over 20.

Triads granted extra year

In December 2019, Ofgem published their final decision on the Targeted Charging Review (TCR). The main outcome of this decision is that, from April 2021, the residual part of transmission charges will be levied in the form of fixed charges for all households and businesses. However, as a result of the coronavirus pandemic Ofgem has decided to delay this by a year. This provides an extra opportunity for consumers to benefit from Triad avoidance before TCR changes arrive in April 2022.

With the TCR, Ofgem aims to introduce a charge it considers fair to all consumers, not just those able to reduce during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action it is likely that their future costs will rise.

How we can help with Triad season

We have helped hundreds of clients avoid these transmission costs by providing them with the tools needed, giving EIC an enviable track record in Triad prediction.

Last year, our customers cut demand by an average of 41% compared to standard winter peak-period half-hour consumption – resulting in significant cost savings. Clients who responded to our Triad Alerts, saved on average £180,000. Our best result last winter saw a client saving nearly £1 million in TNUoS charges.

The Triad season starts on 1 November. Find out more about our Triad Alert service.

The post Challenging Winter Ahead for Triad Season appeared first on EIC.

What is a flexible energy system?

New technology has the potential to turn our passive energy system into a smarter, more sustainable one in the very near future. This means modifying generation and/or consumption patterns in reaction to change in demand or price.

There are three main ways to achieve flexibility in the energy system:

• Interconnection: purchasing power from neighbouring markets at times of peak demand.
• Storage: storing excess energy and using it at times of peak demand.
• Flexibility on the demand side: consumers cut their discretionary power use at times of peak demand for financial incentive.

Until now, flexibility in the energy industry has typically been provided on the supply-side. Now it’s becoming clear that demand flexibility will be crucial for balancing the system in order to reduce costs and decrease carbon emissions. With smart meters that can reduce consumption at peak times and financial incentives, demand flexibility could be an easy and rewarding energy option for consumers and energy operators alike. A report from the National Infrastructure Commission says that £200 million a year could be shaved off the UK’s grid operating costs if just 5% of the current peak demand were met through demand-side solutions.

There are also smaller scale assets that could prove just as effective at balancing the grid, like distributed energy resources (DERs) such as nearby or on-site solar panels, wind turbines, heat pumps or batteries. By reducing demand on the system, there’s less reliance on non-sustainable energy sources during peak demand periods. These smart solutions are becoming increasingly cost effective and in-demand, evidenced by their sustained fall in price and rising investment interest.

Why the UK should lead the world in smart power

Greener policies have seen increased support in recent years, with an emphasis on renewable energy. A strategy set out in another NIC report for 2020 – 2050 recommended 50% of all generation should be supplied by renewable power by 2030, and an entirely zero-carbon electricity supply by 2050.

The question is, how can this level of renewable integration be implemented in a consistent and cost-effective way?

One of the current issues with renewable generation is it is fairly inflexible, so finding more flexibility through demand, interconnection, and storage is key. It could also be the most cost-efficient way to reach net zero. According to an NIC report, Smart Power, a more flexible power system could save consumers as much as £8 billion a year by 2030.

Finding flexibility with EIC

Achieving more flexibility in the energy system is an integral part of EIC’s client commitment. Through a variety of services, including flexible procurement, smart metering, and many years of experience working with carbon monitoring and compliance, EIC goes to great lengths to offer consumers freedom and flexibility. Our goal is to find the bespoke energy package that best suits your business or property, while simultaneously lowering your costs and carbon emissions.

Find out more about our energy management services.

The post Can a flexible energy system lead us to net zero? appeared first on EIC.

What is TM44?

TM44 is the accepted guidance for the UK for judging the efficiency of air-conditioning units. The key role of the guidance is to support inspections to comply with the Energy Performance of Buildings Directive (EPBD). However, they can provide assistance to any building owner or manager desiring further data on the efficiency of their air-conditioning system. The EPBD¹ was initiated in 2003 and replaced a decade later by a recast Directive².

The legislation required that European members devise ‘measures to establish a regular inspection of air-conditioning systems of an effective rated output of more than 12 kW’.

Who needs a TM44?

Not all air-conditioning systems are equal; TM44 focuses on those that use refrigerants for cooling, and parts of other cooling methods such as cooled decks/ceiling slabs or those using aquifers for cooling.

The 12kW figure is a good rule of thumb, making any building owner or manager with a system of that scale subject to TM44. It is important to note that this applies to single large-scale units with an output of 12kW and to individual units that together reach or exceed 12kW.

When is a TM44 necessary?

Inspections timings are relevant here since each mandatory inspection must take place within five years of the previous one. According to TM44 guidance, the initial inspection must satisfy the following criteria:

• Any system that began service on or after 1^st January 2008, must have undergone an initial inspection within five years of the date service began.
• Systems whose output exceeds 250kW must have undergone inspection no later than 4^th January 2009.
• Systems with a service start date prior to 1^st January 2008 and whose output exceeds 12kW must have received inspection by 4^th January 2011.

From 6 April 2012, all TM44 air-conditioning inspection reports have been required to be lodged on the Ministry of Housing, Communities & Local Government Energy Performance of Buildings Register where a report and certificate are generated. Accredited assessors and members of the public may access this site to view and download their TM44 certificates and reports.

Why is TM44 important?

There are several benefits to having a TM44 inspection. Firstly, a company can avoid penalties for non-compliance. These penalties are costly, inviting a £300 fine per offence – meaning either a non-complying building or multiple units inside a single structure whose combined output is more than 12kW, and if an organisation fails to supply a copy of their inspection report within seven days of request by an enforcement authority, they can incur an additional fixed penalty of £200 per building or unit. Enforcement Officers can check at any time whether a building or unit is compliant.

TM44 is an excellent data gathering opportunity about a major source of utility costs, offering insight on how to:

• Improve efficiency
• Reduce electricity consumption
• Decrease operating costs
• Diminish carbon emissions
• Reduce maintenance needs
• Improve controls and settings
• Identify technical flaws

The report will also highlight opportunities such as:

• Improvement to operation
• Improvements to replace less efficient systems
• Replacement of oversized systems (scale of the system relative to cooling load)

When viewed with these gains in mind, TM44 can be thought of a necessary process that yields significant benefits down the line.

Securing your TM44 with EIC

The EIC team were among the first to receive UK accreditation for the delivery of air–conditioning inspections and actively follow any legislative changes so they can keep businesses ahead of the game.

The team can also provide Wrap Reports as standard, offering an overview of essential report findings including reference pictures, additional relevant data and a complete asset list of equipment found.

Alongside this extensive experience, clients will receive additional complimentary intelligence in other areas of sustainable improvement. EIC’s expertise in other fields like Energy Contract Procurement and Intelligent Building Management will position organisations to undertake other sustainable development projects seamlessly, with guidance and security.

For a full breakdown of EIC’s compliance services, and how your organisation can acquire TM44 Certification, get in touch with the EIC team here.

¹(2002/91/EC)

²(2010/31/EU)

³(Statutory instrument 2012 N0 3118)

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What is a DEC?

Display Energy Certificates (DEC) have been a required document in public buildings since 2012. While some structures are exempt, those with floor space of less than 250m², larger buildings fitting certain criteria must comply. These are properties that are occupied by a public authority and frequently visited by the public.

The certificate summarises the energy performance of the building based on criteria known to affect energy demand and usage. These criteria include the type of building under assessment, its total floor area and fuel use.

Accreditors then measure this data against specific benchmarks to determine the building’s overall energy performance. Newer buildings are more likely to have consolidated record-keeping on a building and their HVAC. However, older properties may need to collate this data from various departments and archives.

Since data might be stored in a multitude of locations and formats, this process can be complex and time-consuming. However, the more intelligence that can be sought, the more valuable the DEC becomes in its ability to help identify sources of energy waste.

What are the benefits?

The primary benefit of a DEC is to provide a litmus test for the current energy efficiency of a building. This data can then guide improvement strategies for the structure’s utility usage, thereby reducing their demand and subsequent cost. Only accredited assessors are qualified to analyse and deliver DECs. Part of their service is identifying opportunities for improvement and providing guidance on how to implement these improvements as well.

DECs also communicate your commitment to carbon reduction to visitors, due to the requirement to display them prominently. As consumers become more aware of the effect of their spending habits on the environment, it will dictate the businesses they are willing to interact with. A DEC demonstrates dedication to reduce to or maintain an efficient rating for the building.

Do you need a DEC?

If you are a public authority receiving frequent public visitation, with usable floor space in excess of 250m², then you will need to display a DEC. The validity period of these certificates does vary depending on building size. The DEC of buildings between 250m² -1000m²  remains valid for 10 years. However, buildings larger than 1000m² must renew every year.

Those in need of a DEC or those looking to renew would benefit from shopping around. Ideally looking for a compliance specialist that can offer them the most value with their service.

EIC offers an end-to-end DEC acquisition, starting with a comprehensive site survey if a lack of available data necessitates it. A copy of the accreditation documents will be forwarded to your organisation once the process is complete.

The EIC team pride themselves on providing relief from the complex process of accreditation, allowing business leaders to focus on their own clients and services. To date, EIC has produced over 5,000 DECs and currently manages the renewal process for over 600 sites.

Each of EIC’s EPBD delivery team, have worked within the schemes since their inception, thereby bringing trusted and reliable expertise to your project.

The EIC carbon team provides various compliance services including major carbon-legislative guidance and all EPBD services (EPCs, DECs, TM44). Since these accreditations work in tandem, and share data sets, getting them under one roof can save you some time. While each of these carbon services can be found on EIC’s trusted compliance page, those seeking the DEC offering specifically can find it here.

The post Simplifying Display Energy Certificates appeared first on EIC.

The two-minute warning

After half a year in lockdown energy professionals could be forgiven for falling out of touch with current events. Isolation has left many of us with that post-Christmas, pre-new year feeling of not knowing our days and weeks apart.

That is why EIC has taken the time to put together a small reminder of the now-imminent CCA (Climate Change Agreements) deadline and why it is worth paying attention to.

Climate Change Agreements allow energy-intensive firms to receive reductions on their Climate Change Levy (CCL) obligations, in return for abiding by set energy efficiency targets.

The government extended the CCA for a further two years back in June. Which gives eligible organisations as much as a 92% reduction – on electricity, and up to 83% on gas from payment of the CCL (Climate Change Levy).

The scheme is as potent as it is ambitious. The latest extension alone offers the entire UK business sector approximately £300m per annum in savings.

The scheme is open to new entrants for the first time since 2018 and presents an unequalled opportunity for energy-related savings. However, the time is drawing near to apply for the extension to the scheme, with some trade associations requiring submission up to 4 weeks beforehand.

In addition to this added processing period, the process of assuring compliance can often be complex and long-winded. This latest target carries several charges including an increase in both buy-out prices as well as the financial penalty price for target period 5.

A helping hand

Energy professionals who are now trying to wade against the current of recession to stay afloat may simply not have the time or capacity to undertake the CCA process – thereby risking missing out on this golden opportunity.

EIC demystifies this process, adopting a 360 degree view, assessing the benefits to your organisation and advising of scheme’s requirements. EIC can fully manage the data and reporting requirements of the CCA process, alleviating the burden on your resource, whilst receiving the benefits available. To get started on the CCA compliance process, your organisation can find EIC’s full carbon offering here.

The post CCA Deadline Approaching: 30th November appeared first on EIC.

Energy audits make this process simple. By collecting your energy data and looking at factors such as lighting, heating and air conditioning, audits can help you to identify areas where you could reduce your energy usage. By uncovering these insights, businesses could receive social, environmental and financial benefits.

As energy prices reach record highs, we know that SMEs are becoming increasingly concerned with the obstacles in front of them. And this is only set to increase over the winter period. Getting ahead of the auditing game will bring benefits and help to ease the burden that these companies currently face.

Here are some of the ways energy audits could benefit your business in the long run.

Lower consumption

Not only do energy audits save on costs by identifying where energy is being wasted, they also help businesses to make the move towards a greener future. Without the information obtained through an audit, businesses could be consuming more energy than they need to, wasting money and pushing up their emissions.

Businesses are also facing pressure from stakeholders and government to become greener, as environmentalism takes centre stage in policy making and finance. Energy efficiency is one of the most practical ways to reduce your environmental footprint, and benefits your business – in both the long-term and short-term.

Reduce energy costs

Once you start reducing wasteful energy consumption, you will begin to reap financial rewards. Energy expenses often go unnoticed due to old appliances, inefficient technology or poor insulation. But becoming energy efficient could be as easy as switching to energy-saving light bulbs, or upgrading your air conditioning.

With smart metering you can look at your consumption, create budgets and set targets. Consider installing a building management system, which will enable you to see and control your energy use in real-time. Being proactive with your energy management can save you time and money further down the line.

Longer equipment lifespan

Upgrading to energy efficient equipment will mean that your sites perform better, and equipment will last longer. This is because your appliances won’t need to work as hard to provide the same level of performance.

Keeping equipment up-to-date will streamline your operations, leading to more efficient ways of working. This will enhance the overall productivity of your facilities, which will lead to profitability.

Complying with regulations

Once you have analysed the results of your energy audit, you can set realistic energy efficiency targets and establish a baseline to track your progress. It is essential that you put a strong foundation in place, on the basis of clear audit data, so you can effectively engage with compliance schemes.

Understanding your energy consumption, and associated carbon footprint, isn’t just about boosting your green reputation. Energy and carbon reporting schemes such as Streamlined Energy and Carbon Reporting (SECR) and the Energy Savings Opportunity Scheme (ESOS) are now mandatory for large companies. To stay compliant with these schemes, and prepare for future legislation, businesses should carry out regular energy audits.

At EIC, we understand the importance of keeping up-to-date with compliance. Aside from our auditing services, we offer a full review of your organisation to assess your legal obligations and compliance status. We can provide you with a Compliance Report:

• summarising our findings
• explaining the legislation, and
• outlining your next steps.

Get in touch today to find out more about our trusted compliance services.

Mitigating risk

Mitigating risk is a part of every business strategy, no matter the size or scope. It is crucial for future growth, and provides a level of certainty.

An energy audit provides transparency and assurance, helping businesses to take control of their consumption and costs. And because it can boost compliance and brand reputation, it can also help to secure funding for your business.

Investors are now taking climate-related risks more seriously, and this includes the levels of emissions that your business releases into the atmosphere. The greener and more efficient your business, the more likely you will be to receive financial support from these investors.

How can we help?

We know that a better understanding of your carbon footprint leads to a better reputation, in an increasingly competitive market. Energy and carbon reporting schemes such as SECR and ESOS are mandatory for large companies. But most businesses have to comply with some level of reporting – and it pays to get ahead of the curve.

Carrying out regular audits will help you to comply with these schemes, and prepare for future legislation. Staying transparent and being pro-active is now essential for any business. You will avoid fines for non-compliance, and attract eco-conscious clients to your business.

Whether it be improving monitoring and targeting, introducing compliance regimes or working on smart procurement, EIC can provide the technical expertise needed for enterprises to maximise the benefit of an energy audit.

Get in touch today to find out how EIC can help you incorporate energy audits into your business strategy.

The post Energy audits: what are the benefits for SMEs? appeared first on EIC.

The floodgates open

The impact of COVID-19 has been felt at all levels of commerce, whether it be the radical transition to remote working or exposing the fragility of the fossil fuel sector.

Many organisations have recognised the opportunity that remote communications technology like Zoom and Skype have presented. Building costs account for a huge portion of the average firms outgoings and by reducing the need for space, these costs can shrink as well.

‘The new normal’ it seems could be a boon for all businesses in terms of operation costs, not to mention time saved for their employees. However, as with any paradigm shift, this transition has a great deal of uncertainty attached to it.

A major challenge facing energy suppliers will be in predicting consumption patterns as more people start to work from home. Unpredictable fluctuation will make it more difficult for suppliers to mitigate risk on fixed term contracts. As a result, they will become greatly exposed to imbalance charges and ‘Take-or-pay’ penalties embedded in most standard fixed contracts.

Fixed vs flexible contracts

As a means to protect against these volatile shifts in the country’s energy demand, energy suppliers will increase the price of fixed energy contracts. Doing so will protect against uncertain consumption patterns. Suppliers may also begin to leverage the terms within those contracts to the cost of the firms they are supplying.

Chris Hurcombe, CEO of Catalyst Commercial Services, believes fixed-price contracts may ultimately disappear as suppliers struggle to predict consumption patterns and attempt to insulate themselves from risk.

“Post-Covid, there are too many unknowns for suppliers to price them accurately, so they are doing everything possible to de-risk contracts. Credit requirements are going up and some suppliers are not pricing for certain industries without an upfront deposit or a significant price premium…”

Chris Hurcombe, CEO of Catalyst Commercial Services

Currently, fixed-price contracts levy a 10% price premium compared to their flexible counterparts. Additionally, Hurcombe has predicted a 15-17% rise in 2021,  continuing to 20% the following year.

Non-commodity costs, expected to climb in the near future, now represent the lion’s share of energy bills. As such, they represent the largest risk factor for end-users/client procurement budgets. These ‘fixed’ contracts, which allow suppliers to pass through additional energy charges, may hold a costly surprise for the firms taking part.

Help on the inside

Fortunately, flexible contracts, which EIC specialises in procuring, offer means to reduce or avoid some of these charges. They also afford adaptability in a changing commercial landscape. As volume consumption forecast becomes difficult and budget certainty key for the survival of companies, flexibility will become crucial.

The UK commercial and industrial sectors consume 185TWh annually, approximately £27bn worth, so the potential savings here are gargantuan. Savings of such magnitude can’t be ignored in an economy approaching its deepest recession since 2008’s financial crisis.

EIC can secure you a flexible energy contract to take advantage of these savings. The key markers that EIC looks for when engaging suppliers include contract features and functionality, transparency around price-fixing mechanism and competitiveness of the supplier’s account management fee.

Using these criteria means EIC can effectively guide your market position despite the fluctuations that a post-COVID future promises.

Existing EIC clients were collectively under budget to the tune of £65.7m between 2014 and 2018 for electricity and gas. One pharmaceutical client enjoyed 78% in annual savings over a 36 month period.

Find out more about how to recruit EIC’s expertise into your negotiations.

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In the UK, innovation in the field of hydrogen power continues. Earlier this year, the UK Business and Energy Secretary set out the country’s first-ever ‘Hydrogen Strategy’. The aim is to drive forward commitments laid out in the Prime Minister’s ‘Ten Point Plan’ for a green industrial revolution.

In recent months it has become clear that hydrogen power, much like solar and wind, will revolutionise the UK energy market. Government analysis suggests that 20-35% of the UK’s energy consumption is likely to be hydrogen-based by 2050. This strategy could be crucial for the UK, as the country works towards net zero targets.

So, how will the UK’s ‘Hydrogen Strategy’ impact the UK and its businesses?

How is hydrogen power being implemented in the UK?

As the UK strives towards its 2050 net zero targets, it plans to cut 78% of carbon emissions by 2035. To achieve this, the country must work on reducing waste, increasing efficiency and switching to sustainable power sources – such as hydrogen.

Hydrogen power could also assist with plans to decarbonise. Earlier this year, London mayor Sadiq Khan introduced the first double-decker hydrogen bus fleet in London. The buses joined over 500 electric buses in the UK as part of the Go-Ahead London fleet, continuing London’s acceleration towards the goal of zero emissions by 2030. Steps like these ensure that the UK remains at the forefront of environmental progress.

The creation of secure, good quality green jobs should help to unlock local economic growth across the country. This strategy aims to create 9,000 green jobs and unlock £4 billion worth of investments by 2030. Hydrogen could play an important role in decarbonising energy intensive industries, including transport.

The impact of hydrogen power on business

Businesses around the world are working towards sustainable targets, whether that be their own science-based targets or adhering to government regulations. For this reason, businesses should ensure that their processes incorporate green energy and sustainable practices.

The strategy intends to accelerate the use of hydrogen within four key industry sectors:

• Power
• Industry
• Transport
• Building

Businesses operating within these sectors could receive funding from the government. This finance will be used to develop technology and support businesses, as they make the transition to hydrogen power. Aside from these sectors, hydrogen will help to reduce carbon in heating systems, heavy machinery and even cement.

Embracing new and innovative energy sources also provides businesses with a chance to get ahead of the curve. Switching to renewables could save time, reduce emissions and boost efficiency. This could also mean developing at a faster rate than competitors. Boosting your green credentials, this green innovation could also open up your business to a broader and more sustainably-aware client base.

Where does EIC come in?

The government must now seize the initiative and provide the necessary funding and support to make hydrogen happen. Firms looking to adopt a long-term view of their energy and heat usage could certainly benefit from our services.

EIC’s combined heat and power solution have saved businesses up to 40% on energy costs. EIC’s carbon management team are also on hand to help deliver a comprehensive net-zero strategy for your business. We are focused on helping our clients to take their first step towards their sustainability targets. Our vast range of comprehensive services help businesses to better understand their energy consumption, carbon reduction measures and greener procurement options.

Get in touch today to find out how EIC can help you understand the benefits of switching to renewable energy.

The post The age of hydrogen appeared first on EIC.

The Kyoto Protocol

Two years after the 1992 UNFCCC (United Nations Framework Convention on Climate Change), the Kyoto Protocol emerged as an extension to the conventions primary treaty.

The UNFCCC’s objective is to:

“Stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”

The extension took effect in 1997 and was as much political as it was scientific, viewing the climate crisis from a purely mathematical perspective. The consensus was that industrially developed nations were far greater contributors to climate change than rural and agricultural ones.

CO² emissions would not be divided equally between the committed nations but rather based on their industrial activity. Subsequently, the EU and its member states committed to binding emission reduction targets which remain in effect today.

Following Kyoto, the EU established EPBD in January 2003 to ensure sufficient CO² reductions from European buildings. The primary objective is to incentivise widespread improvement of their energy efficiency. The beauty of this that its criteria apply more to industrially developed nations due to their carbon intensity.

What legislative requirements are covered by EPBD?

The UK governments interpretation of embedding EPBD recognises 3 streams of certification, required by both the private and public sectors:

• DECs (Display Energy Certificates) – required by publicly-owned or funded buildings on an annual or ten yearly basis
• TM44 / Air Conditioning Inspections – required for all buildings with installed comfort cooling
• EPCs (Energy Performance Certificates) – required for both domestic and non-domestic new builds, majorly refurbished, sold or let out. The certificates are valid for 10 years from issue and underpin the MEES standard, whereby a building cannot be sold or let with an energy rating below E.

Building better

As lockdown restrictions ease, and the ‘Build Back Better’ initiative gains momentum, compliance with EPBD will only become more relevant.

The most recent recast of EPBD, in 2010, focuses on new builds and major renovations thereby adopting a long term view of the situation.

EPBD also protects consumers, it requires disclosure of efficiency measures within a property to buyers, to inform them of running costs.

The requirement led to the widespread introduction of Energy Performance Certificates (EPC), one of the major successes of EPBD to date. First introduced in 2007, the UK national database now contains energy performance information on a staggering 40% of homes.

Last year marked the EPBD deadline for all member states to have NZEBs – or Nearly Zero Energy Buildings. The criteria for an NZEB is simply that it has a very high energy performance, made possible by quality insulation and on-site renewable generation.

Since Zero Carbon Homes was scrapped in 2016, EPBD is one of the few legislations that targets the energy performance of buildings.

The fervour in reaching net-zero means that this legislation is here to stay and so firms should be asking how they could ensure they are taking part.

Upgrading for EPBD

Improving the energy performance of a structure needn’t be a complex process, however, it must be an informed one.

EIC’s approach to structural efficiency is twofold, assessing pre-existing assets using integrated metering and monitoring technology. Next, EIC adopts an end-to-end approach, carrying out initial certification, devising and implementing improvements. Finally undertaking a certificate review to demonstrate progress.

Depending on site limitations, EIC can consult on the installation of on-site generation, with a particular focus on solar generation. Thereby lessening a structure’s energy consumption, lowering your utility bills and improving its overall energy profile. View full details of these services, as well as testimonials from past clients.

The post EPBD: What you need to know appeared first on EIC.

Recharging capital

It began with grassroots environmentalism, then government mandate and finally, major financial institutions have started supporting a green future in earnest. Support in the form of loans and bonds for sustainable economic development and innovation, specifically solar storage options.

One such investment occurred last Thursday as the European Investment Bank (EIB) issued a €350 million loan to Northvolt for its lithium battery plant.

The site is based in Northern Sweden and is intended to produce the most environmentally-friendly battery storage packs to date. Using 100% renewable energy and locally-sourced materials, it will soften the characteristically high environmental cost of the Lithium-ion batteries it produces.

The cells will be used mainly in cars, which are responsible for 12% of the EU’s current carbon footprint.

Northvolt has already secured a €2bn supply contract with BMW and Volkswagen is interested in collaborating on a similar factory in Germany. The latter of these two is no surprise after VW unveiled plans to convert its Emden production plant to electric vehicle production.

Lofty ambitions

The gigafactory will have an initial production capacity of 16 GWh per year and be the first of its kind.

Both the investor and supplier share similarly ambitious intentions moving forward as well. Northvolt plans to scale capacity to 40GWh annually while, back in May, EIB stated its intention to increase green investment financing to over €1bn by the end of the year.

China still dominates the solar battery market, of course, producing more than five times that amount in 2019 alone. However, Northvolt and EIB have just set an important precedent and other banks are now joining the green investment fray.

“I believe that EIB financing support for Northvolt has been a textbook example of how our financial and technical due diligence can help crowd in private investors to visionary projects,”

Andrew McDowell, VP EIB

The COVID-19 lockdown has wrought chaos in several energy markets, most notably West Texas Intermediate – which went negative for the first time in April.

Projections show global growth shrinking to -3% after such dramatic losses in this market, as well as many others. Fortunately, the immediate crisis of COVID-19 has not blinkered business and political leaders to the looming threat of climate change.

Despite these losses, April saw a 272% increase of ESG (environmental, social, governance) bonds compared to April last year.

Green investment rush

Finally, investment in green infrastructure has become vogue among Europe’s financiers and firms should take notice. Last week Sadiq Khan promised £1.5bn to upgrade London’s water and gas networks and prepare for more electric vehicle use.

Beyond our shores, Danish investment bank, Saxo, is already making predictions about renewable technology taking over the global market.

“Governments will increase investments and subsidies for ‘green’ industries, starting a new mega trend in equity markets… We believe that these green stocks could, over time, become some of the world’s most valuable companies”

Peter Garnry, Saxo Bank Head of Equity Strategy

Renewable technology rewards boldness and expediency with huge ROI over time. However, the endorsement of institutions like BlackRock and EIB helps reduce risk profiles, making it more attractive to investors.

EIC have championed firms renewable interests for over 40 years, buying and managing approximately 12TWh of energy each year.

The EIC sustainability offering provides carbon compliance, utility management and procurement advice. Combining this expertise under one banner, you and your investors will have all your bases covered when outfitting your firm for a low carbon future.

The post Private investment, public gain: Green investment after lockdown appeared first on EIC.

Favour the bold

The path to net zero is fraught with obstacles and among these is the carbon intensive nature of the mainstream construction sector. Materials like concrete are extremely resource intensive to produce.

While often offset on a citywide scale, some firms are beginning to focus on the buildings themselves and work sustainability into their initial designs.

Blazing the smoke-free trail are Norwegian architects Snøhetta, who will design exclusively carbon-neutral buildings over the next decade.

The aim is then that from 2030 onwards, Snøhetta will focus on creating carbon-negative designs.

Carbon negative structures either generate more energy than they consume, or sequester more carbon than they produce. The figure includes expenses from initial  construction and materials, as well as operation and decommissioning.

Elusive costs like these are problematic, with 85% of building emissions generated by materials and construction, before the structure is ever used.

“For the next 10 years, we have the ambition of having projects on the table that will become CO2 negative in the cradle-to-cradle definition… This means we have to understand the embodied energies and all the materials used.”

-Snøhetta co-founder Kjetil Thorsen

Balancing the books

Since less intensive materials suited to large scale construction are not yet widely available, balancing through generation will be key.  Solar is central to Snøhettas plans, with structures taking about 60 years to hit carbon negative with embedded generation. The architect recently completed its Powerhouse Brattørkaia project, which boasts an identical timeline for net negative. The Powerhouse also sports a cutting edge ‘wedge’ shape designed to maximise exposure to the sun’s rays.

While this may seem like a life sentence for business leaders, it is refreshing that groups like Snøhetta are beginning to think in terms of multi-generational gains.

Bywater Properties are leading a similar development project aimed to create the lowest-carbon workplace in London. The office, named ‘Paradise’ for the road it occupies: Old Paradise Street. Supermarket, Iceland has already secured the majority of this space, planting a green flag for the brand in the minds of its customers.

My generation

It is no secret that the attraction of short-term gains have significantly contributed to the environmental challenges we now face.

However, vision extending beyond the next board meeting can help transform the UK and global economy to reach net zero. Carbon negative buildings are a part of that vision.

Unfortunately, that can feel exclusionary to firms that have already established their sites and do not have the luxury of completely retrofitting them.

The complex, modular nature of structures does mean that while carbon negative may not be feasible, ‘carbon-light’ might be possible.

Intelligent building control is one of the most effective ways to improve your carbon profile. Primarily because it streamlines the carbon-producing elements of a building, mainly utility consumption, and shrinks carbon footprint as a result.

A holistic ally in carbon reduction is the addition of green spaces to working environments, since these also sequester carbon.

On-site generation further reduces your reliance on the grid and the subsequent sequestered carbon in meeting demand – particularly across long distances.

Other benefits include improved energy supply security, added leverage in procurement talks and a better carbon profile for crucial legislation.

EIC understands that intelligent building design and frugality around resource-use work in hand in glove. As such, EIC offers a comprehensive carbon service combining building management, intelligent procure and compliance acumen.

Marriage of these three pillars means unlocking the full potential of sites, and leveraging for the benefit of all. EIC’s full offering is on its services page.

The post Success is negative: Carbon negative office spaces appeared first on EIC.

A brave new world

The build back better campaign received a large, public endorsement from Chancellor of the Exchequer Rishi Sunak this week, who pledged in the Summer Economic Update that £3bn would be committed to the new green economy. While this is only a drop in the proverbial bucket of the £160bn Covid-19 recovery package, it has been met with great enthusiasm from both business leaders and the public.

An E.on survey conducted earlier this year, polling 500 UK-based business leaders, demonstrated that 72% felt that the pandemic has given them cause to re-evaluate their organisations priorities regarding the environment.

During the announcement, the Chancellor revealed the two major fields of improvement to be energy efficiency in public structures and a £2bn Green Homes Grant for those not in social housing. The remaining £1bn will be invested in improving the carbon usage and profile of public sector buildings through measures including double or triple glazing and smart energy meters.

“Improving the energy efficiency of buildings is crucial for reducing our emissions…. this announcement of £3bn is a welcome first step… This funding needs to be part of a comprehensive plan to improve the whole of the UK’s building stock, creating tens of thousands of jobs for the long term, not here-today-gone-tomorrow.”

UKGBC chief executive Julie Hirigoyen

Sunak also announced that £50m worth of funding would be used to support trials into early-stage energy efficiency and flexibility technology for the UK’s least efficient sectors.

The majority of respondents to E.on’s survey believe that the primary responsibility for the UK’s green revolution lies with business leaders, and the UK public, it seems, agrees.

Dancing in the dark

One of the unforeseen gifts of the pandemic has been a heightened awareness both of our potential effects on each other within our society but also the affect that our species is having on the planet. It is no secret that human behaviour is partially responsible for large-scale disease outbreaks and as a result, consumers are becoming ever more cautious about which companies to whom they declare allegiance.

The Capgemini Research Institute has also conducted a recent survey that showed almost 70% of respondents are concerned the effect that their spending habits are having on the natural world. The institute also reports that 80% have altered spending habits in the last year in response to social and environmental issues.

However, while there is clearly a market trend developing in favour of sustainable business practices, ‘greenwashing’ and a lack of transparency threaten to shake consumer trust on a mass scale. Six in ten business leaders consider their clients to be well informed of their sustainability efforts but over half of consumers have stated difficulty in confirming corporate sustainability claims.

“…when baked into an organization’s mission and purpose, sustainability has the potential to entirely change an organization’s relationship with its customers and partners… As businesses focus on transformation in the wake of the pandemic, they should put sustainability at the heart of their efforts.”

Capgemini’s VP for consumer goods and retail Kees Jacobs said.

Getting a head start

Legislation will be one of the major lynchpins in the UK’s approach to a green economic recovery, however clearly signposted legislation could also help to bolster consumer trust.

SECR stands as not only an ethical benchmark for firms that are invested in a cleaner economy, but also a declaration of intent to consumers. Compliance to such legislation demonstrates to consumers that emissions reductions is a company-wide objective and therefore representative of your brand as a whole.

The palatability of SECR is also a major benefit, while it is a complex piece of legislation; the objective is simple and easily explained to non-energy professionals. Employment of the strategies necessary to ensure compliance, be they energy efficiency measures, supply chain reorganisation or on-site generation raises a green flag to would-be clients.

Fortunately, each of these listed strategies is covered under EIC’s carbon management team, who are able to utilise over four decades of experience to create a bespoke carbon strategy for your firm. The EIC services page contains full details of its compliance offering.

The post Summer Economic Update appeared first on EIC.

Rowing together

Last month the International Emissions Trading Association (IETA) announced its 2020s forecast for the price of carbon emissions, expected to rise to  €32 per CO2 tonne equivalent.

The IETA, in a report published last week, also outlined several ways in which international carbon trading, spurred by the increased price, could aid the fight against climate change.

The report outlined that some countries and firms were better equipped than others to reduce and replace carbon-intensive practices. Infrastructure, resources and trade exports are among the variables that can impede or hasten an organisations ability to stay within allotted carbon allowances while remaining soluble.

The trading of such allowances frees individual states and firms up to offset one another’s emissions in order to achieve the collective goal of limiting global temperature rise.

Moreover, it is effective; the European Union’s Emissions Trading System (EUETS) reported a drop of 29% in emissions from stationary structures when comparing 2018 to 2005, thanks largely to such ‘cap and trade’ schemes.

Cap and trade is not a novel concept, it has been suggested as a market-led solution to polluting industry for years. During his presidency, Barack Obama met with a lot of criticism for introducing a bill in support of such schemes with pundits calling it a “sledgehammer to freedom”.

The concern was not unjustified since it was predicted that Carbon intensive industry would simply be undercut by foreign interests able to offer more competitive energy rates to consumers.

However with international cooperation now being actively encouraged, the attraction and probability of price gouging between domestic and international firms is likely to reduce.

The price is right

Alongside the proposed price rise has emerged a surge of concern that, while ambitious, the UK will fall behind on its own national targets unless an even higher charge is established.

The IETA’s forecast would mean an increase on the €27 price that was in effect from June 2018-19 however, think-tank Carbon Tracker believes this would still fall short of the targets stipulated in the UK’s Green New Deal.

A report released by the Zero Carbon Commission has estimated that the IETA’s price would need to be increased by almost 100% to €60 by 2025 to stay within established carbon budgets.

“We need to introduce a stronger, more consistent carbon price signal across more sectors of the economy if we want to accelerate the transition to a low-carbon economy.”

Sam Fankhauser

Assuming that Fankhauser’s perspective is adopted in the UK, carbon allowance trading promises to become a lucrative venture for firms that are able to significantly reduce their carbon emissions ahead of time. Any shortfall between emissions and allowance could be traded with more carbon intensive firms, thereby effectively doubling the value of carbon emissions saved.

Intelligent utility management, on-site generation and smart procurement are all methods to increase the gap between emissions and allowance and, subsequently, its potential value in cap and trade. EIC offers all of these services as well as over forty years of direct experience in integrating and applying them to the benefit of its clients.

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Ada Lovelace

Born in 1815, Ada Lovelace is best known as the first computer programmer for writing an algorithm for a computing machine in the mid-1800s.

Ada showed her gifts from an early age. At her mother’s insistence, she had an unusual upbringing for an aristocratic girl in the mid-17^th century: she was tutored in maths and science even though such subjects were not standard fare for women at the time.

From then on she showed a talent for numbers and language, learning from Mary Somerville, a Scottish astronomer and mathematician, and one of the first women to be admitted to the Royal Astronomical Society.

When she was 17, she met the father of the computer, Charles Babbage. Babbage was a friend and mentor to Ada, giving her first look at his difference machine and asking her to translate an Italian article on his analytical engine. She not only translated the original text, but she also added her own thoughts and ideas on the machine.

Ada described in her notes how codes could be created for the device to handle letters and symbols, as well as numbers, theorising a method for the engine to repeat a series of instructions – a process that is now known as looping, used in computer programming today. Her work was published in an English science journal in 1843, giving her the title of the first computer programmer.

Lynn Conway

Lynn Conway was born in 1938 and is known for her pioneering work in developing and disseminating new methods of circuit design.

Lynn studied physics at MIT and earned B.S. and M.S.E.E. degrees at Columbia University’s School of Engineering and Applied Science in 1962 and 1963 respectively. In 1964 she was recruited to work for IBM Research in New York where she soon joined the architecture team tasked to design a supercomputer, the IBM’s Advanced Computing Systems project.

Whilst there, she made exceptional contributions to computer architecture, including the invention of multiple-issue out-of-order dynamic instruction scheduling, a paradigm used in most high-performance CPUs to make use of instruction cycles that would otherwise be wasted.

Unfortunately, Lynn was fired from IBM for undergoing gender transition in 1968. After this, she had to restart her career, advancing quickly to become a computer architect at Memorex.

She then went on to work for Xerox PARC in 1973, where she invented scalable design rules for VLSI chip design, became the principal author of the famous Mead-Conway text Introduction to VLSI systems, and launched a revolution in microchip design in the 80s. She also invented and demonstrated an internet e-commerce infrastructure for rapid chip prototyping, which lead to many major startups of the decade.

Marissa Mayer

Yahoo!’s former president and CEO, Marissa Mayer studied in Stanford and went on to graduate with a B.S. in symbolic systems in 1997 and an M.S. in computer science in 1999, both degrees focusing on artificial intelligence.

Upon graduating, Marissa soon joined Google as their 20^th employee. She started out writing code, supervising small teams of engineers, and developing and designing Google’s search offerings. She quickly advanced to Director of Consumer Web Products, overseeing the search engine’s well-known layout. She was also one in three people responsible for Google AdWords.

In 2002 she started the Associate Product Manager program, an initiative to recruit new talents and cultivate them for leadership roles. In 2005, she became Vice President of Google Search Products and User Experience until 2010, when she was asked by the then CEO to head the Local, Maps and Location Services, where she secured Google’s acquisition of survey site Zagat.

Marissa left Google to become CEO of Yahoo! in 2012 and remained there until 2017. She now has her own company, Lumi Labs, that focuses on artificial intelligence and consumer media.

International Women In Engineering Day is not only a day to celebrate outstanding women, but it’s also an international awareness campaign that aims to raise the profile of women in engineering, focusing attention on the amazing career opportunities available for girls in the industry.

Ada, Lynn and Marissa were leaders in their field and pioneers in cutting edge technology. Much like them, we aim to be great forerunners in energy consultancy.

Here at EIC we combine technology with consultancy know-how to deliver energy intelligence for our clients. Our end-to-end solutions are shaping the way businesses buy, manage and control their energy and comply with client legislation.

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Laying a foundation

During the Spring Budget announcement, Chancellor Sunak made it clear that while the economy would be strained during and after lockdown, its recovery could not come at the expense of UK climate goals.

Little over a month after the budget announcement, the Department for Business, Energy and Industrial Strategy (BEIS) proposed an extension to the Climate Change Agreements (CCA) scheme.

No doubt, this move was designed to engage with businesses that already fit the criteria of the scheme but were unable to join it previously and in doing so allow them to benefit from the reduced CCL cost and the environment to benefit from reduced carbon emissions.

2017 saw the Government aim its sights at a 20% improvement in commercial and industrial energy efficiency by 2030, this goal has informed the consultation with that target being upheld in regards to the extension.

The popularity and effectiveness of the scheme are undeniable, with recent analyses demonstrating that 80-100% of businesses were participating in most eligible sectors.

A consensus of this magnitude inspires hope for the UK’s climate goals, given that, of the UK’s total greenhouse gas emissions, 25% are business-driven. An evaluation for the 2017 Clean Growth Strategy also showed that up to 22m tonnes of CO2 could be saved through investments in energy efficiency technology.

An open forum

The BEIS has made clear that facilities that do meet the current criteria would now be able to join the scheme for the first time since its initial closure in October 2018.

The Target Period being proposed, in addition to remaining in line with periods 1-4 of the scheme (running from the 1^st January 2021 until 31^st December 2022), will be supported by a variation of the certification period. Initially planned to end in March 2023, it would be pushed back to June of the same year to allow participants to gain certification for CCL discounts between April and June 2023. The added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

The CCA’s closing in 2018 had shut out new entrants to the scheme; however, businesses fitting the eligibility now have an opportunity to recoup up to 92% on electricity and 83% on gas CCL charges.

Applications to the CCA can be long-winded and complex, however, the return on an initial investment of time is huge. Especially considering that an average energy-intensive business the added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

Based on these figures, the opportunity presented by Sunak and the BEIS has the potential to dramatically change the landscape of the UK energy industry post-COVID-19. Alongside legislation like ESOS, MEES and SECR, the CCA calls for expertise rather than direct action. EIC oversees the entire CCA application process and subsequent management of the service following approval of the application. We will be able to show the fiscal savings based on individual business’s energy consumption and ROI against our typical fees.

EIC offers a comprehensive range of compliance services as well as ancillary strategies that can help improve your carbon profile while reducing utility costs.

The post Pause for thought: CCA extension consultation closes appeared first on EIC.

Mapping the future

News that the UK will postpone its hosting of the UN climate change conference (COP26) was not unexpected, given the necessity for social distancing that COVID-19 has imposed, however it did raise concerns over the UK’s determination to enact a green recovery post-lockdown.

While the UK track record may, in part, justify some of these concerns, individual safety is not the only benefit of such a delay to talks, for one the nations taking part will need a clear idea of the state of their respective economies once lockdown ends before committing to new policy. 

And from a psychological perspective it might be argued that due to the all-consuming nature of the pandemic when it comes to public and government attention, the conference would not receive the attention necessary if it went ahead this year.

How far we’ve come

Despite the conference now being slated for Q4 2021 (-12 November), Alok Sharma gave a speech last Friday that reasserted the UK’s ambitions and responsibilities with regards to the 2050 net zero target and how the race to zero was already hastening its completion.

The UK, in collaboration with Chile and the U.N., are already leaders of the Climate Ambition Alliance – representing over half of global GDP – however Sharma insisted in his speech that “…we must go further”.

Sharma outlined some of the UK’s major achievements in reducing carbon emissions in the last thirty years:

• Since 1990 the UK economy has grown by 75% while simultaneously reducing carbon emissions by 43%
• In the same time, the UK has two offshore wind turbines able to power 2,000 homes, as of 2020 the UK is leading nation for offshore wind capacity
• Globally, the cost of solar and wind power have dropped by 85% and 49% respectively
• Over two thirds of the worlds nations can now generate renewable energy cheaper than coal

While details of the path forward remain scant – not surprising given the reasons for postponement – Sharma made it clear that liberating capital to fund green initiatives and widespread support for electric vehicles would be crucial to the UNFCCC’s success.

Approximately 1,000 business leaders, representing revenue totalling in excess £3.5tn have committed to the scheme including British motor giant Rolls Royce. According to the United Nations Framework Convention on Climate Change UNFCCC, around 75% of these businesses have already developed strategies and targets aligned with the 2050 target.

Dr. Alison Doig, international lead at the ECIU (Energy & Climate Intelligence Unit) recently commented on the danger of complacency in the opening stages of such a race. 

“This is not, however, about pushing climate action to some date in the future; no entity can reach net-zero in 2050 without starting now… participants will have to present delivery plans, including setting interim targets for the next decade, by the time COP26 opens in Glasgow next year.”

Clean energy was the first element of the British economy that Sharma cited when referring to the need for green growth after lockdown, making it a pressing issue for business leaders looking to get a head start on net zero. EIC provides comprehensive  support and advice to businesses in the procurement, management and generation of alternative energy sources. Each service forms an element of the robust energy management service that EIC offers.

The post COP26’s race to zero begins appeared first on EIC.

Technology vs culture 

The majority of your utility belt will be focused on the technology that you are currently using or could utilise in future however there is also a short section on the culture within your business and how that can factor into your success.

Heating and Ventilation 

Comfortable ambient temperature has become something of an assumption, commercially speaking, however the technology behind it often remains unexplored except to establish its basic controls for the user. Given that air conditioning alone can account for up to 30% of a site’s energy consumption, this is a significant oversight that, sadly can be solved very simply.

Sealing off or switching on 

A common method of controlling indoor temperatures is by sealing buildings, preventing windows being left open, however this can actually exacerbate the overall costs trying to be mitigated. It means air conditioning will be working overtime during hotter periods but also that air circulation may take a dip, meaning higher concentrations of CO2 and dampened performance from staff as a result.

IoT connectivity across sites can use occupancy monitoring and responsive temperature and air quality control to mitigate these issues. The provision of real-time data streams means that you can control individual spaces across large sites, maintaining utility usages that are responsive to demand and need.

Casual is smart 

Enstating a casual dress code during acutely hot or cold weather conditions means that staff will be able to offset their own demand on heating or cooling, not to mention be more comfortable in their work. 

Dig for victory

Planting trees is also a relatively cheap and environmentally friendly way to offset heating costs, since they provide shade and fresh oxygen as well as absorbing latent humidity in the air.

Lighting 

Intelligent lighting control can save 30-50% on energy costs automating this utility according to occupancy and respective demand means that you will not have spaces unnecessarily drawing power that isn’t being utilised. 

Let the sunshine in 

Not always an option depending on how sites are initially designed, however by using automated lighting, you can schedule lights to power down during daylight hours and reactivate once night falls. 

Using what you have 

The installation of LED bulbs for better efficiency and a longer lifespan can be an added boost to light use efficiency without being disruptive to pre-installed equipment, motion sensors are another low-impact option that help ensure that light is never wasted.

Professional culture 

As social creatures, culture is effectively the software that our communities run on, understanding this means that you can leverage your professional culture to become more energy efficient with a minimum of cost.

Empowering your team 

The use of environmental posters can help remind team members that their actions have weight in something larger than themselves. Small adjustments like the use of power strips also make it easier for them to adopt the positive habits that will be the foundation of your new professional culture. 

Communicate that computers should be shut down at the end of the day rather than left in standby, especially before the weekend. It has been estimated that a company with 200 PCs could save £12,000 annually this way. 

Breaking ranks 

2020 has demonstrated many things, among them our ability to work remotely and effectively and how doing so can help foster trust between managers and staff members. Encouraging this way of business means you can reduce or re-purpose the amount you are spending on office space and its attached utility costs. The same can be said of meetings that might’ve taken place on-site, by using video technology to bridge these physical gaps you reduce the occupancy on your own sites and the utility usage along with it.

Measure for measure 

Meters and sub-meters are essential tools in understanding the energy needs of a site as well as what areas have the highest concentration of usage. Armed with this information you are better equipped to make policy decisions pertaining to both technology and culture within your utility management. The Carbon Trust has found that a site meter can save 10% in energy costs while sub-metres, which allow you to pinpoint areas where demand is highest, can offer a further saving of 30%.

Going the extra mile

There are a number of additional features that can be added to the design of many sites to both off-set and reduce utility costs including on-site solar generation & storage, combined heat and power and demand side response schemes.

EIC can create a comprehensive and all-inclusive package for your business that oversees all aspects of utility management from metering & monitoring to IoT empowered devices that keep you connected to site data 24/7.

Open architecture technology affords access to all your vital business systems, meaning EIC can communicate with, control and report on any aspect of any site including heating, lighting and ventilation. Our services page contains full details of our offerings.

The post EIC’s Utility Belt: Tips for more effective utility management appeared first on EIC.

Kindness to all

The theme of kindness could not have been more appropriate for this year’s Mental Health Week UK, with so many struggling under the emotional, financial and medical burdens of COVID-19 and the subsequent lockdown.

Indeed, kindness, solidarity and generosity are things that have been in great demand as a result of the widespread concerns wrought by coronavirus. Despite the added pressure felt simultaneously by the commercial energy sector, it’s proponents have responded with a magnanimity seldom anticipated by their customers.

Orsted

Danish renewables supplier, Orsted, has promised more than £165,000 to various health and charity organisations across the UK to help support them through the crisis, beneficiaries include Guy and St. Thomas’ Hospital and Liverpool University Hospitals NHS Foundation Trust. Duncan Clark, the supplier’s UK region head, impressed the importance of solidarity between companies and their customers:

“Across the UK, the current situation is having a profound effect on families and communities.. It is at times like these that we must come together to do what we can to support each other.”

Duncan Clark, Orsted

British gas  

Big six supplier British Gas stated their allegiance to customer welfare early on in the lockdown by announcing that vulnerable customers would be issued with 2 weeks of discretionary credit for electricity. The support will be pre-loaded onto keys or cards while gas customers will receive £5 credit, British Gas is also offering a remote version of the same service for those customers with smart meters.

Emergency measures 

Emergency credit limit for gas and electricity has been extended across the board by many major suppliers in the UK,  with E.ON raising the limit tenfold from £5 to £50 and nPower raising emergency credit limits from £7 to £45. 

Hands across the oceans

The trend of solidarity hasn’t stopped in the UK, energy companies across Europe are taking up the cause of customer support during the challenges of COVID-19. Italy was infamous for being one of the worst affected European countries and taken as an omen to be heeded by other EU states, domestic energy giant ENEL has answered with vigour. The supplier has donated €23m to support Italian healthcare professionals by funding hospitals, beds and machinery and president Patrizia Grieco framed this move as an act of duty from ENEL.  

“We are an Italian multinational with strong ties with the territory. It’s natural but also a duty to aid the territories where we operate and the communities we work with every day.”

Meanwhile in France, multinational ENGIE, has also contributed to Italy’s fight against the virus by providing free electricity and technical assistance on the construction of new medical units. 

A kinder world

The primary beneficiary of the lockdown measures however, might be an unexpected one, with the slowing of economic activity and the subsequent drop in emissions, the planet is receiving a long overdue dose of kindness from our entire species.

COVID-19 may have given us an opportunity to reflect on our current practices as well as a vision of what the world could look like with better, greener behaviour from us. 

EIC are champions of sustainable business practices through an end-to-end approach that can support you from initial procurement of your utilities, through to maximising their efficiency with IoT in order to faster deliver a sustainable commercial culture.

The strides EIC is taking to help the UK build a green commercial sector and reach climate targets are myriad and you can find out how to engage with them on our website.

The post Alone, together: Mental health during lockdown appeared first on EIC.

The wild blue yonder

Lockdown, while effective, has been a source of ongoing financial and emotional strain for many in the UK and businesses are no exception. However, there have been a number of benefits to this economic slowing that perhaps are going overlooked.

Chiefly, air pollution, in proportion with industrial energy demand, has dropped significantly. Combined with the severe oversupply of Oil and faltering resilience of fossil fuels generally, this has given solar generation the opportunity to enjoy a moment in the sun. 

However, solar is not a recent arrival to the energy scene, existing theoretically since at least 1839 thanks to French scientist Edmund Bacquerel. Bacquerel’s work was groundbreaking because it was the first time that solid material with no moving parts had been used to convert sunlight directly into electrical energy.

A guiding light

Since 1839, we’ve come a long way and furthest perhaps in the last five years, during which time the costs of solar have halved while storage options have improved consistently with the introduction of graphene and vanadium technology.

The conditions of lockdown have demonstrated that renewable energy sources are likely to be the most resilient to the supply chain disruptions that a major crisis can create. 

In fact, EU solar generation jumped by 28% year-on-year, between March 28th and April 26th of this year compared to 2019, breaking generation records while doing so. 

Energy security is a basic necessity for the survival of any business and, as such, will be a subject of great scrutiny throughout lockdown and in its aftermath. Novel technologies like on-site generation will become more attractive, not only for their resilience but for the savings that their flexibility offers. 

The use of on-site photovoltaics can also improve a company’s carbon profile while providing a measure of protection against supply failure. 

EIC manages around 12TWH each year and with over 40 years industry experience, we are able to create bespoke energy solutions for your needs. We can help you engage with on-site generation, saving you as much as 20% on your energy usage or 40% when combined with on-site battery storage. Better still, in times of plenty, you’ll be able to sell excess energy back to the grid and further offset energy costs. 

Our solutions page contains full details of our on-site generation and storage offerings, as well as further information on the compliance service we provide that can be bolstered by such technology.

The post Here comes the Sun appeared first on EIC.

Forging a path

Yesterday, Prime Minister Boris Johnson announced proposed easing on several lockdown measures and made it clear that an exit strategy from COVID-19 was being developed to prevent further infection and revive the UK economy.

While the lion’s share of Johnson’s speech was devoted to these adjustments, he reiterated that maintaining social distancing would be critical in ensuring their success.

The next steps, beyond decreased restrictions on travel and exercise, will be in allowing non-key workers to return to work if their role was site-restricted but to remain working at home if possible. Thus the first sparks of economic resurrection appeared.

COVID-19 has ushered in one of the greatest economic cooling periods in modern history, in combination with geo-political tensions it has brought the oil industry to its knees and exposed many of the frailties in existing energy infrastructure.

In his speech, Johnson expressed the gravity of COVID-19, describing it as follows:

“The most vicious threat this country has faced in my lifetime…. [of a] kind we’ve seen never before in peace or war.”

However fears are now circulating that we will see a retreat away from renewable energy sources as both governments and investors move to revitalise that sector, perhaps at the cost of UK climate targets.

An opportunity in disguise

The CCC, among others, have stated that there is no reason that the economic recovery plan cannot be inclusive of UK climate goals. 

“Recovery means investing in new jobs, cleaner air and improved health. The actions needed to tackle climate change are central to rebuilding our economy. The government must prioritise actions that reduce climate risks and avoid measures that lock-in higher emissions.”

Lord Deben, CCC Chairman

Historically, Lord Deben is correct, perhaps the most dramatic green energy success story in recent history is that of the United States. Immediately after the 2008 financial crisis, the U.S. prioritised funding for clean energy which generated 900,000 jobs in a five-year period.

According to a recent insight from the International Renewable Energy Agency (IRENA), in excess of 17m jobs could be generated globally by 2030 through similar investment now-effectively doubling that work force.

Additionally, IRENA have calculated that this model could yield a global GDP gain of approximately $98tn by 2050, returning in the range of $3 to $8 on every dollar spent.

“Things have changed markedly since the last global economic downturn a decade ago – renewables are now cheaper than the alternatives” 

Richard Black, director of the Energy and Climate Intelligence Unit

The global picture shows many benefits to leveraging COVID-19 for the purposes of green transition however these gains are logistical as well as financial. As Fatih Birol, head of the IEA, implied, renewables have also proven far more resilient during this crisis:

“Only renewables are holding up during the previously unheard-of slump in electricity use…”

Fatih Birol, head of the IEA

Upon this rock

The responsibility now falls to the UK government to create and enact policies that reflect its commitment to carbon neutral and to an economy for the future instead of simply offering life support to fossil fuels.

Despite not presenting a comprehensive strategy, the prime minister did comment on the UK’s green trajectory while responding to questions after the announcement. Johnson declared the UK’s resolve in meeting net zero by 2050, pandemic or not, saying “…we know we can do it”.

Although COP26, this year’s proposed Glasgow climate talks, are unlikely to go ahead, the UK is still considered a global leader in the fight against climate change, however actions taken now will dictate the fortitude of both our economy and reputation in years to come:

“The UK now finds itself in a unique position to ramp-up climate action at home and supercharge the international response to climate change abroad…” 

Baroness Brown of Cambridge,CCC Adaptation Committee chair 

Thankfully, while the costs of climate inaction are all too apparent, the benefits of a green transition are more and more becoming a matter of consensus, as Richard George of Greenpeace UK states:

“…200 top economists told us that transitioning to a low-carbon economy was the most effective form of economic stimulus… Now the UK government’s climate advisors have reinforced that message… the debate is over.”

The question then becomes how individuals and businesses can contribute to, and take advantage of, this new green trajectory?

No doubt new legislation will be introduced to further incentivise greener business practices, and the Energy Transitions Commission (ETC) has made suggestions along those lines in a strategic document. 

One such suggestion is that the second wave of financial support to UK businesses be conditional on their commitment to climate-friendly policy and practices. 

Leveraging the pandemic in order to pressure businesses into adopting sustainable practices may seem extreme however it is in order to prevent a much greater catastrophe and as such might be viewed as both timely and reasonable.

That being said, legislation and compliance will likely become the government’s major tools in achieving carbon neutral within the industrial and commercial sectors. As such, the value of compliance becomes even more pronounced, particularly given the need to reduce costs during and after a period of low income.

Carbon management then, becomes a vital priority as businesses and management professionals try to anticipate and navigate this possible transition. Not unlike the lockdown itself, social responsibility and personal accountability are at the heart of Carbon management and EIC will develop a bespoke plan for your business that reflects that. 

Combined with in-house compliance and IoT empowered facility management services, EIC can integrate many of the elements of your carbon strategy into a single cohesive framework for the benefit of your shareholders, team members and clients.

The post A road map for change: UK climate goals post COVID-19 appeared first on EIC.

CCA: How and why

The climate change agreements initiative was established to incentivise the continued and effective implementation of energy efficiency strategies among the most energy-intensive industrial sectors.

CCA encourages businesses to streamline their energy usage by offering a 93% reduction on electricity, and a 78% reduction on other fuels accrued as a result of the climate change levy (CCL).

Since its inception in 2013, approximately 700,000 tonnes of carbon emissions have been prevented each year, with businesses using up to 2.3 TWh less energy or enough to power 140,000 homes.

The need for such legislation becomes painfully obvious when framed in the context of energy wastage, in the City of London alone businesses are losing £35m each year this way according to a Green Alliance think tank report.

Originally, the initiative was due to conclude in March 2023 however Chancellor of the exchequer Rishi Sunak announced in the spring budget that there would be a consultation on a possible two-year extension to the initiative.

The show goes on

While 9,000 facilities across the UK are already benefiting from the CCA, this extension is estimated to be worth as much as £300m annually in CCL discounts, for the businesses already taking part in the scheme as well as new beneficiaries that would now be able to apply.

It works by encouraging businesses to make improvements to site energy efficiency over an eight-year period. In return, businesses would receive a discount worth as much as £300m annually on CCL bills.

Given the financial uncertainty that COVID-19 continues to inspire, and cooling attitudes towards sustainable development and practices, the news of an extension is welcome on all fronts.

“Extending the Climate Change Agreement scheme will give businesses greater clarity and security at a time when they need it most. This extension will save businesses money while cutting emissions…”

Energy Minister Kwasi Kwarteng

The consultation will cover proposals for the addition of a new Target Period, from 1 January 2021 to 31 December 2022, an extension of certification for reduced rates of CCL for participants 31 March 2025 and finally, to re-open the scheme, allowing eligible facilities not currently participating to apply to join.

Businesses that had previously missed the opportunity to join the scheme now stand a chance of taking advantage of these savings whilst contributing to a greener economy.

However, it should be noted that the criteria of eligibility for the scheme is not under review, rather the extra time will allow businesses to implement strategies that make them eligible in time for the levy discount to bear fruit.

The new gold rush

The extension proposed, if approved, presents a significant opportunity to both current beneficiaries and newcomers to the scheme, provided they have the reporting mechanisms in place, to adhere to the scheme.

Businesses that wish to take advantage of this opportunity in future will need to ensure that they are fully compliant with the scheme as soon as possible, in order to reap the most benefit.

EIC’s expert team of carbon consultants and data analysts are dedicated to offering your business a comprehensive CCA service from initial assessments through data analysis to actionable strategy.

The post The green gold rush: CCA extension proposed appeared first on EIC.

Setting the scene

The percentage of the labour market now working from home (WFH), due to the lockdown imposed to fight the spread of COVID-19, is unprecedented with Finder estimating that 60% of the UK’s 33.7 million labourers are now working remotely.

Most commercial enterprises are being forced to reevaluate the way their staff perform their roles and the limitations imposed by location and direct proximity to colleagues and management. 

While WFH has demonstrated some obvious benefits, time saved by cutting out commutes for example, there are still many roles that require working from site.

Additionally, many employers will choose to return to a state of normality for logistical reasons like communication and conferencing that suffer novel limitations when used remotely. 

One of the upsides of COVID-19 will be an increased awareness and respect for the effect of working environment on productivity as well as on employee health.

Making informed decisions

Air quality, temperature and humidity are fluctuating qualities of an internal environment while lighting is more static.  However, they can each be directed according to need, tracked for data analysis and there is evidence that all of them affect productivity in the workplace.

“System design and the deployment of correctly implemented controls are the single biggest components to ensuring environmental conditions are correctly maintained.”

-Mark Longley, Head of Operations Solutions, t-mac

Air quality

The widespread attraction of commercial air conditioning is that it can provide a stable and consistent utility cost to weigh against air quality control, meaning that windows can be ‘sealed’ to prevent costly and unpredictable heat loss. 

Unfortunately, a lack of CO2 monitoring can lead to saturation in the internal environment which, in turn, can impair the cognitive functions of your team and lead to a drop in productivity. 

A 2015 report from Harvard University, titled “Economic, Environmental, and Health Implications of Enhanced Ventilation in Office Buildings”, demonstrated that:

“The public health benefits of enhanced ventilation far exceed the per occupant economic costs… Even with conservative estimates, the increased productivity of an employee is over 150 times greater than the resulting energy costs.”

Ironically too much CO2 can often trick the brain into thinking that temperatures are uncomfortably high-meaning that air conditioning can actually be counterproductive to its original purpose if it is unable to respond dynamically to your needs.

“I don’t think our field has done a good job of reaching out to the real estate developers, managers, and owners of businesses that can make this change… I don’t think it’s acknowledged that changing these factors can make a difference.”

-Piers MacNaughton, Harvard

Temperature control

A discussion on air quality control necessitates one on temperature regulation since the two are often confused with one another. System-wide temperature control has been a standard in modern work and living space for decades, however its adaptability leaves something to be desired. 

The current fluctuations in British weather are an expected side effect of climate change however the thermal regulation of most offices isn’t equipped to respond to wide swings in temperature or humidity ranges-both of which affect our perception of temperature.

Additionally, recent reports have demonstrated human productivity is extremely sensitive to changes in temperature:

“The results show that performance increases with temperature up to 21-22 o C, and decreases with temperature above 23-24 o C. The highest productivity is at temperature of around 22 o C. For example, at the temperature of 30 o C the performance is only 91.1% of the maximum”

A collaboration between the Lawrence Berkeley National Laboratory and Helsinki University of technology, the report also stated:

“There is an obvious need to develop tools so that economic outcomes of health and productivity can be integrated into cost-benefit calculations with initial, energy and maintenance costs.”

Lighting

Finally, the internal lighting systems a business utilises can have a dramatic affect on productivity since they have a direct relationship with their staff’s circadian rhythms, the aspect of our biology that tells us when it is time to be engaged and time to rest.

Psychological studies have also shown that people’s mood and productivity can be affected by the ‘temperature’ of light as well i.e. whether light feels warm or cold to look at.

“There is growing evidence for a link between lighting conditions, shift-work and biological health conditions: an area likely to receive more attention from researchers in future.”

–Lighting, Well-being and Performance at Work, by Professor Jo Silvester and Dr Efrosyni Konstantinou

Closing thoughts

All that being said, the key question is how to obtain the data and control necessary to make these systems work for you rather than just being extra columns on the expense report. 

Considering these elements as potential assets rather than liabilities might seem counter-intuitive but when the application of something has the power to affect productivity this dramatically, it is only a liability while it is not under our control.

As Jones Lang LaSalle’s 3-30-300 rule posits, for every dollar or pound spent on utilities like lighting and heat, you are likely to spend a hundred on people so why not make those costs go further by making what you spend on utilities count towards your people too.?

The recent SECR deadline also served as a sobering reminder of the importance of effective utilities management and regular reappraisal of existing practices. 

Intelligent building management will continue to grow more and more sophisticated, allowing greater adaptability to the needs of clients, staff and business owners, and EIC can help you to leverage this technology to increase both your staff’s productivity and your bottom line. To find out more click here.

The post Clarity of vision: Intelligent buildings appeared first on EIC.

A battle of morale

Since it first began its initial spread, COVID-19 has subjected the planet to a level of disruption unrivalled since World War Two. However, the advantage to be claimed here lies in how much the pandemic has exposed our systemic fragility and the areas in direst need of adjustment and future development.

First of all, assurance should be prioritised both to customers and to shareholders, the UK is privileged in its possession one of the most robust energy supply services in the world and as such concerns for supply are minimal.

The National Grid have reported that in 2019, the majority of the UK’s annual electricity consumption broke down as 21% commercial, 30% domestic and 26% industrial. Obviously these will be subject to change over the coming weeks, as self-isolation and working from home become the norm, however the current estimation is that there is an “extremely small” chance of the grid becoming overwhelmed.

Using Italy as an example, electricity and gas use are actually expected to decrease rather than increase.

The economic uncertainty that COVID-19 has brought, means that staff as well as shareholders are worried, about job security, financial stability and their own health as well as that of loved ones.

Staff engagement during this crisis will be essential to maintain morale as well as to ensure that team members are receiving whatever added support they may need under the circumstances to continue to communicate and collaborate effectively.

Remote communication and conferencing have, thankfully, become increasingly commonplace in recent years and can now be leveraged to maintain employee relations. Consider which technologies, be they apps or direct software might best serve you and your team’s needs.

How EIC can help

Beyond staff logistics, there are also considerations to be made about site-bound resources, equipment may need to be powered down or put into stand by for quick reactivation when lock-down ends, lighting and lock timers may need to be adjusted etc.

Additionally, if you are already employing automatic utility data capture, perhaps the system you are using needs to be adjusted or paused to prevent inconsistent results being track and integrated in future analyses. Are staff periodically visiting site and will they have specific utility needs that must be accounted for?

EIC are specialists in providing thorough, accurate and applicable building management services that can be controlled entirely from a single, remote platform. The functions included in our bespoke packages range from lighting and ventilation control to critical systems like fire, security and CCTC.

The integration of these separate elements allows you to formulate a building-wide strategy that reflects all its needs without getting bogged down in a torrent of data. Further information about the solutions we offer can be found on our services page.

The post COVID-19: Advice for Energy Professionals appeared first on EIC.

The Nuts and Bolts

The UK’s Streamlined Energy and Carbon Reporting Policy (SECR), is a piece of government legislation that came into effect April 1^st of last year. It seeks to consistently highlight the carbon footprint of companies, whilst encouraging long term strategies that are congruent to UK carbon emissions goals.

To that end, the SECR requires companies to provide a detailed report which includes items such as their carbon emissions and energy efficiency/carbon reduction behaviours implemented to redress their overall carbon footprint.

Established as the Carbon Reduction Commitment (CRC) was ending, last year’s regulations will affect approximately 11,900 companies in the UK, considerably increasing the range of influence that the CRC originally enjoyed.

The scheme affects businesses described as “large organisations” within the Companies House terminology. Therefore businesses which have at least a turnover of £36 million, balance sheet of at least £18 million, or 250 or more employees, will be within this category.

SECR works in cooperation with the pre-existing legislation the Energy Savings Opportunity Scheme (ESOS).

Year 1 – Act Now

Since the SECR came into effect on April 1^st 2019, it means that we now sit on the eve of the first regulatory deadline, with the first trench of qualifying businesses financial year ending in March 2020.

For businesses which also qualify for ESOS, the SECR scheme is a useful tool to provide the necessary data sets required for compliance, making the journey smoother.

As such, we felt that the timing was right to remind our readers of the combined ESOS and SECR package that we offer. The fusing of the two services is designed to remove unnecessary stress and inconvenience with the promise of a dedicated Carbon Consultant.

Finally, EIC also offers a 10% discount to any clients that sign up for a 4-year joint service package, our website contains further details on all of our services and we invite you to find out more should they appeal to you.

The post SECR: Why use EIC? appeared first on EIC.

There was a significant reduction in the number of Triad calls this year with EIC only issuing 13 alerts in total, nearly half the number called the previous winter. This compares favourably with other suppliers who called an average of 24 alerts across the Triad period.

Triads are three half-hour periods with the highest electricity demand between the start of November and the end of February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads. If consumers are able to respond to Triad alerts by reducing demand then they will be able to lower their final transmission costs.

Lowest peak demand for 27 years

Peak demand is at its lowest point since 1992/93 and is now 14 GW (~24%) lower than the peak of 2010/11. There are a number of factors that have contributed to the fall in peak demand over the past decade. These include improvements to the energy efficiency of appliances, an increase in LED lighting and a rise in embedded generation.

Embedded wind output peaked at 3.4 GW during the Triad period. As embedded generators are connected to local distribution networks, this displaces a similar amount of demand from the transmission network. Therefore, peak demand is typically higher on days with low wind which increases the risk of a Triad occurring. This trend can be seen in the graph below which shows that for every 1 GW increase in embedded wind output there was an associated drop in peak demand of 0.9 GW.

Mild January leads to new record

For the first time since the Triad methodology was implemented, all three Triads have occurred before Christmas. This is mainly due to the mild and windy weather conditions experienced so far in 2020.

In terms of temperature, we’ve seen the mildest January since 2007 and second mildest in past 30 years. Across the Triad season only six weekdays had an average temperature below 3°C with only one of these occurring after Christmas. This compares to 17 the previous winter and 23 for the 2017/18 winter.

Wind generation increased throughout the Triad season with a pre-Christmas average of 6.5 GW significantly lower than the January and February average of 9.2 GW. As the weather conditions in November and December were generally colder and calmer, this increased the probability of Triads occurring during this period. Subsequently, all three Triads fell before Christmas on days when temperatures were below 4°C and wind power was less than 5 GW.

Demand response results in March peak

Peak demand on 5^th March was higher than any day within the Triad period which can be seen in the graph below. The weather conditions on this day were demand supportive with an average temperature of 4°C and wind power around 5 GW. In comparison, on the 20^th and 21^st January weather conditions were similar, however peak demand was around 1.7 GW lower. This demonstrates the effect that Triad avoidance has had on reducing peak demand over the past few years. It also suggests that peak demand may start to increase after next winter without the incentive to consumers of reducing transmission costs. The elimination of a number of embedded benefits for generators is expected to limit the growth in embedded generation which will also have an effect on peak demand.

Demand response also led to a Triad falling between 4:30pm and 5pm, which is the earliest occurrence in 22 years. This Triad was, in fact, missed by one supplier who advised consumers to reduce demand between 5pm and 5:30pm. As some businesses are only able to reduce demand for short periods, the largest volume of demand response is typically seen between 5pm and 6pm. This has the effect of flattening the evening peak and increasing the risk of the peak half-hour falling either side of this window, as was the case on 17^th December. All 13 Triad alerts issued by EIC covered the correct HH period, comparing favourably to an average success rate of 78% across other suppliers.

TCR Final Decision

In December, Ofgem published their final decision on the Targeted Charging Review (TCR). The main outcome of this decision is that from April 2021 the residual part of transmission charges will be levied in the form of fixed charges for all households and businesses. This means that there is one final chance for consumers to benefit from Triad avoidance over the 2020/21 winter period.

The TCR aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. For the majority of consumers these changes will lead to a reduction in transmission costs. However, for those who are currently taking Triad avoidance action it is likely that their future costs will rise.

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Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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The clock change accelerates the seasonal trends towards lower demand during the warmer, lighter summer months.

Historically, the scale of peak power reduction following the clock change has been around 10%. However, early forecasts show an expected 5% drop in average demand for the week following the change. An unseasonably mild winter has kept demand levels depressed in general this year.

The advent of demand management and significant developments in energy efficiency and IoT controls have made the UK consumer more proactive when it comes to when and how they use electricity. It can be seen in the graph that overall demand, before and after the clock change, is trending downwards.

The role of renewables

The increase in wind and solar capacity in recent years has contributed to the overall demand reductions. Higher volumes of on-site renewable capacity allow more generation to be provided off-grid as homes and businesses generate their own electricity supply during windy or sunny spells. This reduces demand on the national transmission system. The high levels of solar availability during the summer season were a particularly strong influence on demand levels this year as on-site solar panels increased embedded generation, reducing demand requirements for the transmission network.

Renewables continue to deliver a growing percentage of the UK electricity mix. The 2019 share for wind, solar, hydro and bioenergy electricity sources was 31.8%, up from 27.5% in 2018.

How clock change impacts behaviour

The graph above shows how the peak demand changes before and after the clock change. The earlier evenings cause an increase in electricity demand as consumers use more sources of light and heat. Post-change, a longer day-time means that less lighting is used through the day and also has the effect of pushing daily peak demand to later in the evening.

The graph shows that over the last five years before the clock change, peak demand occurs at around 6.30pm in the weeks leading up. However, once the hour is gained peak demand occurs later in the day, at around 8.00pm on average.

The impact of coronavirus

As the COVID-19 situation has developed it has become increasingly clear that there will be an impact to demand levels. The graph below shows the effect of the temporary closure of schools and some businesses, with peak demand forecast to fall around 1GW on average week-on-week. The combination of the further closure of offices and the clock change will likely see demand drop heavily over the coming week.

React to changes in real-time

How can you best react to changing demand patterns and sources of generation? How can you ensure time-consuming but critical processes affected by the clock change are carried out efficiently?

With IoT-enabled controls, your business can access all the key information about your sites usage on a single platform. This allows you to make instantaneous changes to multiple sites at the touch of a button.

One of our multi-site clients previously spent three weeks making adjustments ahead of the clock changes. This involved engineers attending each site and changing multiple systems. With our system we could make the same changes in a matter of seconds.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

The post Stay ahead of changes as the clocks spring forward appeared first on EIC.

Below, we highlight key announcements:

Carbon reduction schemes

The government announced a Carbon Capture and Storage (CCS) Infrastructure Fund to establish CCS in at least two UK sites. One by the mid-2020s and a second by 2030. CCS is a technology that involves the capturing of carbon dioxide emissions created by fossil fuels during energy generation. The CO₂ can then be transported and stored safely.  There are currently no operational commercial CCS facilities in the UK to date. However, there are a small number of pilot projects currently in development.

The Chancellor also announced a Green Gas Levy, designed to help fund the use of greener fuels. This is in effort to encourage more environmentally-friendly ways of heating buildings through a new support scheme for biomethane. In addition, the Budget stated that the government will increase the Climate Change Levy (CCL) that businesses pay on gas in 2022/23 and 2023/24 (whilst freezing the rate on electricity). It will also reopen and extend the Climate Change Agreement (CCA) scheme by two years.

Further announcements saw the Renewable Heat Incentive (RHI) scheme extended for  two years until March 2022. This is alongside a new allocation of flexible tariff guarantees to non-domestic RHI in March next year. The government said these efforts would “provide investment certainty for the larger and more cost-effective renewable heat projects”.

Electric vehicle infrastructure

Road transport is currently responsible for approximately one fifth of all UK emissions. To reduce this the government has announced investment in electric vehicle charging infrastructure with aims that “drivers are never more than 30 miles from a rapid charging station”.  The government will invest £500 million over the next five years to support the rollout of a fast-charging network.

The government is still considering the long-term future of incentives for zero-emission vehicles alongside the 2040 phase-out date consultation. In the meantime, £403 million will be provided for the Plug-in Car Grant, extending it to 2022/23, with a further £129.5 million to extend the scheme to vans, taxis and motorcycles. In addition there will be an exemption of zero emission cars from the Vehicle Excise Duty (VED).

Natural environment

The Budget has announced a Nature for Climate Fund, which will invest £640 million in tree planting and peatland restoration across England, representing the coverage of an area greater than Birmingham over the next five years. Additionally, the announcement of the Nature Recovery Network Fund and the Natural Environment Impact Fund will each provide avenues for environmental restoration and sustainable development.

Future reading

In the build-up to the COP26 Climate Summit, to be hosted in Scotland later in the year, HM Treasury will publish two reviews. One into the economic costs and opportunities associated with reaching Net Zero and the other into the economics of biodiversity.

In summary

Reactions to the Budget have been a mixed bag. It’s been cited as simultaneously the greenest modern Budget to date and a missed opportunity regarding the larger climate picture. The government has announced a number of positive policies that will begin to pave the way for the Net Zero transition. However, the decision to freeze fuel duty for the tenth year in a row and investment of £27 billion into new roads will be regarded as counter-productive to ambitious targets.

Stay informed with EIC insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

The post Budget 2020 appeared first on EIC.

Compliance Notices

ESOS Regulators are currently issuing compliance notices to all UK corporate groups who they believe should have participated but they haven’t yet received a notification of completion from.

If you receive this, you must inform the regulators whether you are;

• in the process of completing your compliance, or
• provide evidence you have already submitted your notification, or
• advise that you do not qualify for ESOS

ESOS submissions

You can find a published list of all businesses who have made a submission via the ESOS notification system as of 1 February 2020 here.

Further evaluation on the effectiveness of energy audits and ESOS can be found here.

ESOS support

If you need urgent support with your Phase 2 compliance, talk to EIC today. Our dedicated team of ESOS Lead Assessors and highly trained Energy Auditors will work hard to help you comply as soon as possible, and support you in any conversations with the Environment Agency.

After ESOS compliance

It’s vital that you don’t let your compliance go to waste. ESOS aims to highlight where companies can make energy improvements, cut wastage and lower costs. Use these opportunities to improve your operations and make significant energy savings. The most common areas for energy savings are lighting, energy management through smarter energy procurement, metering, monitoring and controls, and air conditioning.

SECR

If your business complies with ESOS, it’s highly likely you will need to comply with Streamlined Energy and Carbon Reporting (SECR) too. SECR was introduced in April 2019 as a framework for energy and carbon reporting. Its aim is to reduce some of the administrative burden of overlapping carbon schemes and to improve visibility of energy and carbon emissions for large UK organisations.

SECR can also help businesses on their first steps to meet the UK’s 2050 Net Zero target. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations. They will also need to report any energy efficiency actions they have taken within each financial year. If the coronavirus is likely to cause a delay to your accounts, there is guidance here.

Talk to EIC on 01527 511 757 or email info@eic.co.uk if you need any further advice on ESOS or SECR. We’re here to help.

The post An update on ESOS Phase 2 appeared first on EIC.

Majestic has a strong commitment to continuous improvement in sustainable development, helping clients streamline their energy consumption, become more sustainable and manage the cost of utilities efficiently. Across our group of companies our people address the relationship between environmental stewardship, social responsibility, industry expectations, housing services, and business operations.

Our first fundraising initiative is to raise £20,000 and send 10 intrepid adventurers to Cambodia in November 2020 to work alongside a community in Battembang to build a much needed home for a local family. Our team of volunteers will get a rare glimpse of real communities and families, and a huge feeling of satisfaction that their trip will leave a lasting legacy of hope.

Peter Dosanjh, Majestic’s Chairman, says:

“Our vision is for a partnership which ‘builds thriving communities’ so we are thrilled to announce Habitat for Humanity GB will be our charity partner for 2020 and beyond. Each project we become involved with here in the UK and around the world will provide opportunities for employees to invest their time, energy and skills. Whether it’s fundraising in the office or physical labour helping to build homes, I know we will experience a great sense of achievement together. With our group of companies largely supplying utilities to buildings and homes we decided it was time to dedicate our charitable efforts towards something closer to home, quite literally! Habitat for Humanity, like us, believe that a good home is one of the most important things you can have in life.”

www.habitatforhumanity.org.uk/majestic-group/

Tum Kazunga, CEO at Habitat for Humanity Great Britain, adds:

“There is an ongoing struggle in the world to eradicate housing poverty. Millions of people wake up every day without a decent place to live in. With partnerships such as the one with Majestic Group, we are able to get one step closer to our vision of a world where everyone has a safe place to call home. Supporting builds, such as the one in Cambodia, enables us to tackle the housing crisis in areas which would otherwise struggle to cope on their own.”

Habitat for Humanity Great Britain is an affiliate of Habitat for Humanity International network, an international development charity. Habitat for Humanity supports the most marginalised and vulnerable, helps families access finance and fight for land rights for women, upgrade urban slums and informal settlements, improve access to water and sanitation, and help communities become more resilient in the face of natural disasters. Working in nearly 70 countries, since 1976 they have helped over 20 million people.

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How does t-mac work?

t-mac’s IoT technology seamlessly connects building hardware systems with dynamic software. This enables users to remotely manage utilities including electricity, gas and water, as well as heating and ventilation systems.

It works by connecting and continually monitoring meters, sensors and equipment, and shares real-time performance data via a single online platform. This provides users with the ability to fully manage their utility use and machinery. The system can also serve as an early warning device and flag faults or energy inefficiencies.

Wates Sustainable Technology Service Partner

t-mac was recently named as a partner with Wates as part of the Wates Sustainable Technology Service (WSTS) initiative. The initiative supports customers of the Wates Group – one of the UK’s largest privately-owned construction and property services companies – in achieving their sustainability goals. The WSTS helps identify and implement sustainable technologies that comply with regulations, lower carbon emissions and improve building performance.

EIC Intelligent Building Solutions

EIC installs and delivers t-mac hardware and software solutions as part of our Intelligent Buildings offering. t-mac solutions range from simple metering and monitoring to complex Building Management Systems (BMS) controls.

You can find out more about our Energy Intelligence solutions by downloading our free guide in the resource section of our website here.

The post t-mac Relaunch appeared first on EIC.

Short-term gas contracts, notably the Day-ahead and front-month markets, fell heavily again last week, with losses of around 9%. The driving force in the gas market remains the very healthy fundamentals, lower than expected demand and risk of oversupply. A brief spell of below average temperatures and low winds had no price impact, while declines accelerated again when temperatures climbed at the end of the week and wind output surged to more than 13GW as Storm Ciara arrived in the UK.

Flexibility within the gas supply network is minimising the impact of higher demand across the winter, particularly from LNG sendout, which rose above 100mcm again last week. Nineteen tankers are now booked for February arrival. Record low LNG prices across the global market are contributing to a substantial oversupply. Asian LNG prices have more than halved year-on-year as Chinese demand tumbles amid fears over the spread of the Coronavirus.

Higher heating demand this week is likely to be offset by continued high winds, reducing the use of gas for power generation. March and April gas prices are down to 22p/th while the Summer 20 contract has halved in value since the start of winter, falling from 46p/th to 23p/th. Longer-dated gas contracts moved higher, with gains of 3-4% across the week. This was in line with a rebound in the crude oil market, which bounced off one-year lows amid ongoing speculation over the spread of the Coronavirus. Fears over lower demand from the virus has weighed on commodity prices for the last few weeks.

Power

Day-ahead power prices ended the week below £30/MWh for only the third time in ten years as the UK experienced very high wind levels at times last week. Day-ahead prices started the week higher, rising to £37/MWh as weather conditions were cooler with wind output dropping below 2GW. However, as Storm Ciara reached the UK at the end of the week, wind generation jumped to peaks of more than 13GW. On Saturday wind generation averaged 12GW across the day. The strong renewable availability reduced the share of gas in the fuel mix, with CCGT burn halving from 16GW to 8GW in one day.

Higher levels of embedded generation from the strong winds also affected electricity demand. After peaking at 45GW early in the week, peak demand fell to 42GW by Friday. Wind output is forecast to remain consistent around 12-13GW for the first few days of this week. Power prices for Tuesday have dropped to £28/MWh, testing 13-year lows for the prompt market. The
continued declines in the gas market is reducing the cost of gas-fired generation, and driving the front of the power curve to new lows. March 20 prices fell 5% week-on-week with the Summer 20 market hitting new lows at £33/MWh. The rest of the electricity curve saw little change, drawing some support from gains in longer-dated gas contracts and the oil market.

The post Weekly Energy Market Update – 10 February appeared first on EIC.

A required capacity of 44.2GW was made available to bidders representing a total 59GW of derated capacity. The final result saw National Grid ESO procure 45.1GW of capacity.

The T-3 auction is the first since the reinstatement of the CM in October 2019. Two further auctions are scheduled for this year; a T-1 auction commencing 6 February and a T-4 auction to start 5 March.

The Market was originally suspended in November 2018, following a ruling from the European Court of Justice that the design of the scheme was biased against small-scale, clean energy units and therefore should not be eligible for State Aid approval. However, the ensuing investigation carried out by the European Commission reconfirmed its eligibility, enabling the Market to be restored.

Capacity Market consultation launched

Following the recent reinstatement of the Capacity Market the Department for Business, Energy and Industrial Strategy (BEIS) has launched a consultation on proposed changes to the scheme. The government hope to implement improvements to the CM’s design to reflect recent market and regulatory developments.

In summary, the government proposes to:

• Allow all types of capacities to apply to prequalify to bid for all the agreement lengths available in the Market, provided they can demonstrate they meet relevant capital expenditure thresholds.
• Reduce the minimum capacity to participate from 2MW to 1MW.
• Legislate the government’s commitment to procuring at least 50% of the capacity set-aside for the T-1 auction.
• Incorporate any new capacity type into the CM that can demonstrably contribute to the generation adequacy problem.
• Establish a reporting and verification mechanism for the carbon emission limits to be applied to the Market.
• Remove the exclusion of plants with Long-term STOR (Short-term operating reserve) contracts from the CM.

The consultation will conclude on 2 March 2020.

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Gas prices fell heavily again last week with contracts across the curve falling to new lows. Price drivers for the market are unchanged with the extent of oversupply and strength of fundamentals continuing to weaken prices. Balance of Winter and Summer 20 prices fell 7% across the week, with losses continuing today. The Summer 20 contract has dropped nearly 40% in the last three months. The oversupply is being driven by record storage stocks in the UK and Europe. Unseasonably mild temperatures so far this month, coupled with very high wind levels have depressed demand.

Meanwhile record LNG imports have balanced the gas system with minimal use of storage withdrawals or Interconnector imports from Europe. Price falls this winter have been strongest for the Summer 20 contract, which anticipates very limited injection demand and an inability to absorb excess supply during the milder months. The strength of losses in short-term contracts have now brought down the rest of the curve with seasonal 2021 contracts down 5% across the week, breaking below their previous December lows.

Gas demand has risen sharply today with consumption rising around 80mcm from last week, as temperatures briefly drop to below seasonal-normal levels. Lower wind output of under 5GW this week is also increasing gas for power generation. However, the demand is being comfortably met by supply, notably from LNG, which has risen to more than 130mcm to match the higher demand. This underlines the strength of flexibility within the gas supply system. Milder, windier conditions are returning at the end of the week.

Power

In the power market, contracts on the curve are following the gas market lower, reflecting the declining costs of gas for generation. Very high winds pushed Day-ahead power prices to new lows of £32/MWh but the prompt has risen across the week in anticipation of higher demand from lower winds and colder temperatures this week.

Wind generation across the week was consistent at over 8GW, reaching highs of 14GW as Storm Brendan swept across the UK. Power demand is expected to rise this week as temperatures have dropped to below seasonal-normal levels with wind output as low as 2GW. However, the extensive gas supply flexibility offered by record storage stocks, LNG and Interconnector imports is weighing heavily on prices.

Prices across the curve are down 3% week-on-week. However, the losses in the power market are more gradual than the corresponding gas contracts. This is the result of price support from rising carbon prices, protecting the power curve from further losses. Carbon costs pushed above €25/tCO2e last week, to new highs for the year.

The post Weekly Energy Market Update – 20 January appeared first on EIC.

Gas prices on the curve moved lower week-on-week, with the market close to the record contract lows seen at the end of December. However, price movement was more volatile after gains of as much as 10% in the aftermath of the US air strike in Iran. Those gains had been fully reversed by the middle of last week. Concerns over supply disruption in the region, and possible LNG exports from Qatar eased, with the strength of fundamentals within the market returning to focus as the biggest price driver.

Declines across the gas market seen since October have accelerated in recent weeks as the extent of oversupply in the system became more apparent. After reaching eight-year highs in December, LNG imports continued to flood into the UK in the first half of January. Gas demand levels have been unseasonably low amid above average temperatures and very strong wind levels. The record low levels attracted some buying interest, while reduced LNG sendout and Norwegian imports via Langeled left the system undersupplied on some occasions. This provided some price support with the market bouncing off those lows late last week, with a continued modest recovery today. However, prices remain close to historical lows, with the fundamental outlook for the gas market remaining highly bearish. Losses were strongest on the front of the curve with the February market and Summer 20 prices down 7% week-on-week.

Prolonged above average temperatures are forecast in January while the UK and Europe is set to end winter with record levels of gas in storage which will affect injection demand during the milder summer months. Storage withdrawals and Interconnector imports have been largely untouched throughout winter, but can provide substantial supply flexibility and spare capacity as required.

Power

Power prices have mirrored movements in the gas market. A bounce across the energy mix in the aftermath of the US air strike in Iran has been reversed with contracts pushing back towards the lows seen at the end of December. The very low cost of gas-fired generation, particularly this summer, is weakening electricity contracts.

The February power market fell 5% across the week with seasonal power contracts for 2020 down 4%. Elevated carbon prices, which remain above €24/tCO2e are underpinning the power market, slowing the extent of declines relative to gas. However, the downward pressure on electricity prices continues, with very high renewable availability providing further bearish signals.

Day-ahead power prices rose across the week as demand increased from their holiday lows. However, at £36/MWh, the prompt market remains highly depressed, below the trading range seen during most of the summer season. Furthermore, while electricity consumption rebounded to 45GW last week the outlook for consumption remains very weak because of the near-record levels of wind generation.

Forecasts of up to 14GW of wind generation throughout the coming week is driving down demand. The high levels of on-site embedded generation from wind is reducing demand on the transmission network. Peak power demand this week is forecast at just 43.0GW, a drop of 4GW compared to the same week last year. The high winds are expected to continue until Friday as Storm Brendan sweeps across the UK. Weather conditions are set to shift next week as winds drop and temperatures cool from current above average levels.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

The post Weekly Energy Market Update – 13 January appeared first on EIC.

Gas prices on the curve rebounded last week, bouncing off contract lows reached between Christmas and New Year.

Prices across Europe pushed to new lows after a new transit supply agreement between Russia and Ukraine was agreed, avoiding supply disruption.

The Summer 20 market dipped below 30p/th, down 10% since Christmas. However, contracts across the curve have rebounded since Friday, following supply risks linked to escalating tensions in the Middle East. A US air strike has killed a top Iranian military general. Tehran has vowed “severe revenge” with the risk of disruption to the region’s vast oil supply providing some price support.

LNG may also be affected by a possible new conflict with the US and Iran previously rowing over access to the Strait of Hormuz, a crucial supply route for tankers. Strong gains in the oil market – which is testing highs of $70/bbl – provided support to longer-dated gas prices, delivering in 2021. While there may be further volatility as the situation develops, fundamentals remain bearish, with oversupply capping prices around their pre-Christmas lows.

LNG imports were at their highest since April 2011 in December, while thirteen tankers are already confirmed for January arrival. Interconnector imports remain untouched and a storage overhang is inevitable as lower demand during the holiday period meant 3TWh of gas was injected into storage.

UK gas reserves are over 95% full and at record highs for the time of year. Demand forecasts for January are also price depressive with above average temperatures expected for at least the next two weeks while wind generation dominated the fuel
mix, providing a third of UK power in the last week after averaging over 10GW a day. With energy demand in the short-term expected to be low the risk of oversupply and an inevitable storage overhang is still weighing on gas markets.

Power

Power prices pushed lower during December led by Day-ahead and balance of winter contracts that reflect the oversupply in the gas market and lower cost of gas-fired generation. Electricity demand fell heavily over the Christmas holiday period, driving Day-ahead power prices to lows of £32/MWh, not seen since early October.

While consumption has picked up as schools and businesses return to full operation, power demand maintains a significant reduction to previous years. Very high wind generation over the last week has reduced the use of fossil fuels, while the gas burn being utilised is at a low cost level.

Wind has provided a third of UK electricity so far this month, leading the fuel mix with average output of 10GW a day. The strong renewable availability is forecast to continue this week as the UK benefits from windy, mild weather conditions, which are providing downward pressure to prices. This is the reverse of the cold, low wind scenarios that risk higher prices
during the winter season.

Across the curve, power prices followed the gas market lower over the holiday period, hitting new lows at the end of December. The market has rebound marginally since Friday following the escalating tensions in the Middle East. However, the scale of movement in power, both lower and in the rebound have been more gradual than in gas. The continued elevation in carbon prices, which are holding above €24/tCO2e are helping to underpin the power market. Week-on-week electricity contracts remain down with the Summer 20 contract under £40/MWh.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

The post Weekly Energy Market Update – 6 January appeared first on EIC.

Their Manifesto promised that the first Budget in 2020 will prioritise the environment and contain investment in research & development, decarbonisation schemes, new flood defences, electric vehicle infrastructure and clean energy. The Budget date is to be confirmed, but will likely take place in early Spring.

White Paper

The Department for Business, Energy and Industrial Strategy (BEIS) intend to release an Energy White Paper, which is expected in Q1 2020. It will detail the country’s strategy to achieving net zero emissions by 2050.

Energy Secretary, Andrea Leadsom, has said that BEIS are currently evaluating a number of different approaches. This will include decisions on renewables, nuclear levels and the role of carbon capture, usage and storage.

The White Paper is expected to yield further policy indications on a range of energy and environmental issues that are currently unclear.

COP26

The 26th session of the Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) is scheduled to take place 9-19 November 2020 in Glasgow.

The UK will host the main COP summit, which will enable world leaders to discuss actions to tackle climate change and serve as a spotlight on how far the government’s climate policy decisions have come. Claire Perry, the previous Minister of State for Energy and Clean Growth, will preside as the UK nominated president for the event.

Second Balancing Services Charges Taskforce

Ofgem formed the first Balancing Services Charges Taskforce, in collaboration with the Electricity System Operator, back in November 2018. The main goal of the Taskforce was to investigate the future direction of Balancing Services Use of System (BSUoS) charges.

The Taskforce found that the BSUoS charge does not currently provide any useful forward-looking signal. This makes the charges hard to forecast, reducing the influence of the charge on user behaviour.

With this information, the Taskforce assessed whether individual elements of BSUoS have the potential for being charged more cost-effectively and hence could provide a forward-looking signal. However, whilst it was concluded there were theoretical advantages to options suggested, it remained that the implementation would not or could not provide a cost-reflective and forward-looking signal that would drive efficient and effective market behaviour.

The first Taskforce concluded that it was not feasible to charge any of the BSUoS components in a more cost-reflective and forward-looking manner that would effectively influence behaviour to help the system and/or lower costs to customers. The group recommended that all costs included with BSUoS should be treated on a cost-recover basis.

Taskforce key deliverables

The new Taskforce will aim to assess who should pay BSUoS charges, how these charges should be recovered and how principles from the Targeted Charging Review can be applied. In order to achieve this the Taskforce has compiled five deliverables:

1. Consideration and assessment based recommendation as to who should pay balancing services charges
2. Investigation and recommendation for recovering balancing services charges, including collection methodology and frequency
3. Produce interim report providing detailed reasoning and any relevant analysis behind the initial conclusions
4. Consult on the interim report providing an opportunity for stakeholder comment
5. Issue a final report including consideration of stakeholder consultation responses providing a final recommendation on who should pay, the design of balancing services charges and potential timescales for implementation

The final report, containing the recommendations to Ofgem, is scheduled to be published in June 2020.

Electric Vehicle Smart Charging consultation response

On 15 July 2019 the Government published a consultation on Electric Vehicle Smart Charging. This was to seek views on the outline of the current approach and objectives for the implementation of smart charging systems for electric vehicles (EVs).

The Government believes that the encouragement of consumer uptake and innovation is necessary to meet future targets. To this effect, the Government’s overall aim is to maximise the use of smart charging technologies to benefit both consumers and the electricity system, whilst supporting the transition to EVs.

The consultation states that without government intervention, it is unlikely that smart charging will be taken up at the rate required to achieve the full potential benefits. This could lead to the risk of varying standards and inadequate protections for the grid and consumers.

The long and short-term plans for smart charging

The Government provided detail on both short and long-term plans for smart charging. The approach for Phase One of the project would see new non-public charge points required to have smart functionality, compliant with the British Standards Institution.

Phase Two is a work in progress, as the Government seeks views on what the long-term approach for operational requirements should be, with some potential options. The consultation proposes that a decision should be made between 2020 and 2022.

A potential response to the consultation is expected in 2020 and would dictate the rate and method of rollout of new EV infrastructure across the country in the future.

Review of Default Tariff Cap

The initial default tariff cap came in effect on 1 January 2019. It was designed as a temporary cap on standard variable tariffs and fixed-term default tariffs. In accordance with the licence requirements, Ofgem run an update progress twice a year. This is so the default tariff cap reflects changes in the cost of supplying energy.

On 7 August 2019, Ofgem updated the cap levels to come into effect for the third charge restriction from 1 October 2019 to 31 March 2020. A fall in wholesale costs saw the level of the cap reduce from £1,254 to £1,179 for this period.

The default tariff cap is intended to be a temporary measure, with an upcoming review next year on whether it is still fit for purpose. The cap will remain in place until at least the end of 2020. The government will be able to choose whether to extend the cap beyond this, up to a maximum of 2023.

Dermot Nolan, Chief Executive of Ofgem, said, “The price cap requires suppliers to pass on any savings to customers when their cost to supply electricity and gas falls.

He added, “This means the energy bills of around 15 million customers on default deals or pre-payment meters will fall this winter to reflect the reduction in the cost of the wholesale energy. Households can cut their bills further in time for winter, and we would encourage all customers to shop around to get themselves the best deal possible for their energy.”

CCC to publish Sixth Carbon Budget

The Committee on Climate Change (CCC) is scheduled to publish its recommendation on the level of the Sixth Carbon Budget in September 2020.

The Sixth Carbon Budget, required under the Climate Change Act, will provide ministers with advice on the volume of greenhouse gases the UK can emit during the period 2033-2037. The Budget will set the path to the UK’s net-zero emissions target in 2050, as the first carbon budget to be set into law following that commitment.

CCC Chairman, Lord Deben, advised the Government of the Committee’s intention in a letter to the Exchequer Secretary to the Treasury, Simon Clarke MP.

The letter sets out the Committee’s expectations for the Treasury’s planned review of how the costs of the transition to a net-zero economy by 2050 can be funded and distributed fairly.

The Committee called on the Treasury to conduct the review in its May 2019 advice to Government on setting a net-zero target for the UK. The Committee sees the review as crucial in ensuring a successful transition and recommend that the review is a key input to next year’s spending review and budget, and longer-term policy direction.

Lord Deben’s letter also recommends that the Treasury review develops a plan for funding decarbonisation and examines the distribution of costs for businesses, households and the Exchequer.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates, you can find us on Twitter and LinkedIn.

The post UK Energy Policy in 2020 appeared first on EIC.

SECR, Streamlined Energy and Carbon Reporting, was introduced in April 2019 as a framework for energy and carbon reporting. Its aim is to reduce some of the administrative burden of overlapping carbon schemes and to improve visibility of energy and carbon emissions for large UK organisations. Given the timing of its introduction, SECR could also help businesses on their first steps to meet the UK’s 2050 net zero target. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations they will also need to report any energy efficiency actions they have taken within each financial year.

We believe it’s time to focus on SECR. The good news is, if your business complies with ESOS, you’re in a much stronger position as you may have much of the data you require already to hand.

Who needs to comply with SECR?

The scheme affects UK quoted companies and ‘large’ unquoted companies and LLPs. These are defined as those meeting at least two of the following; 250 employees or more, annual turnover of £36m or more or an annual balance sheet of £18m or more.

What the scheme requires

For SECR, companies are required to report the following:

• Scope 1 (direct) and Scope 2 (indirect) energy and carbon emissions (electricity, gas and transport as a minimum).
• Previous year’s figures for energy and carbon. At least one intensity ratio (e.g. tCO₂/turnover).
• Detail of energy efficiency action taken within the reporting year.
• Reporting methodology applied.

When will you need to comply?

Compliance will be based on your financial reporting year. Therefore, if your financial year is 1^st April – 31^st March, your first energy and carbon disclosure data collection will be for the period covering 1^st April 2019 – 31^st March 2020. This must be submitted in your Director’s Report after March 2020.

Take a look at our chart to see when your SECR deadline will be.

What happens if I don’t comply?

Whilst there are no fixed penalties specified, as there are in ESOS, there are still consequences for non-compliance. Not meeting the reporting requirements of SECR can result in accounts not being signed off. Missing the filing deadline could lead to a civil penalty. So it’s important for organisations to fully align communications between their energy and finance teams and to get a head start where possible.

Save time and hassle

There are similarities with SECR and ESOS when it comes to required data for each scheme, this can be used to your advantage. We offer a combined ESOS and SECR compliance package for businesses at a discounted rate. If you’d like more information on this or any of our services, call +44 1527 511 757 or email us.

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This trend has been reflected in the released manifestos. Each party recognises the climate emergency and is dedicating space to energy and the environment.

Conservatives

The Conservative Manifesto

The Conservative party would maintain their current energy tariff cap policy. It also intends to introduce measures to lower energy bills further. In this effect, there would be a £9.2 billion investment in improving the energy efficiency of homes, schools and hospitals. The party would also support the creation of more environmentally friendly homes.

They state that their first Budget would prioritise the environment with investment in decarbonisation schemes, electric vehicle infrastructure and clean energy. They would also consult on the earliest date they believe appropriate to begin phasing out sales of new petrol and diesel cars.

There are aims to increase the capacity of the offshore wind industry from it’s current 8.5GW to 40GW by 2030. They would also help introduce new floating wind farms. Alongside development of renewables, the Conservatives would also support gas for hydrogen production and nuclear energy.

The moratorium on fracking in England would remain in place. This is unless the Conservatives believe there is scientific evidence that the practice can be carried out safely.

Further investment would include a £1 billion fund to develop “affordable and accessible clean energy”. £800 million to build the first fully-deployed carbon capture storage cluster. There would also be £500 million to help energy-intensive industries transition towards low-carbon technologies.

You can read the full manifesto here

Labour

The Labour Manifesto

The Labour party has committed to a ‘Green New Deal’. The aim is to achieve the majority of required emissions reduction by 2030.

Labour would create a Sustainable Investment Board, involving the oversight of the Chancellor, Business Secretary and Bank of England Governor. They would co-ordinate with trade unions and businesses to deliver investment to necessary areas. The Office of Budget Responsibility would be asked to incorporate climate and environmental impacts into its forecasts so as to properly evaluate decisions made.

They would also seek to bring the energy and water systems into public ownership. They believe this would allow the acceleration and co-ordination needed to upgrade networks at the speed and scale needed to transition to a low-carbon economy.

Labour’s plans would see:

• A new UK National Energy Agency responsible for the national grid infrastructure and the oversight of the country’s decarbonisation targets.
• Fourteen new Regional Energy Agencies to replace the existing District Network Operators (DNOs) responsible for decarbonising electricity and heat.
• The supply arms of the ‘Big Six’ energy companies would be brought into public ownership to continue to supply households while helping consumers reduce their energy demands.

As part of Labour’s ‘National Transformation Fund’ £250 billion would be dedicated to investment in renewable and low-carbon energy and transport, biodiversity and environmental restoration.

Labour aims to deliver nearly 90% of electricity and 50% of heat from renewable and low-carbon sources by 2030. To this effect they would build 7,000 new offshore wind turbines, (this equates to around 52GW) 2,000 new onshore turbines, “enough solar panels to cover 22,000 football pitches” (roughly 157km2) and new nuclear power. Labour would also trial and expand on tidal energy and invest in hydrogen production.

The party will aim to upgrade almost all of the UK’s 27 million homes to the highest energy efficiency standards. They state that this would reduce the average household energy bill by £417 per year by 2030. It also aims to tackle fuel poverty. All new homes would be required to meet a zero-carbon homes standard.

The Labour party would introduce a Climate and Environment Emergency Bill to set out new binding standards for decarbonisation and environmental quality. In addition, they would introduce a new Clean Air Act in line with World Health Organisation (WHO) limits for fine particles and nitrous oxides. The party would aim to end new sales of conventional petrol and diesel vehicles by 2030.

You can read the full manifesto here

Liberal Democrats

The Liberal Democrat Manifesto

If elected, the Liberal Democrats would immediately implement a ten-year emergency programme designed to cut emissions substantially. They would then phase out emissions from remaining hard-to-treat sectors by 2045 at the latest.

The party has identified that their first priorities upon entering government would be:

• An emergency programme to insulate all Britain’s homes by 2030, cutting emissions and fuel bills and ending fuel poverty.
• Investing in renewable power so that at least 80 per cent of UK electricity is generated from renewables by 2030 – and banning fracking for good.
• Protecting nature and the countryside, tackling biodiversity loss and planting 60 million trees a year to absorb carbon, protect wildlife and improve health.
• Investing in public transport, electrifying Britain’s railways and ensuring that all new cars are electric by 2030.

Specifically, they would aim to accelerate the deployment of renewable power, providing more funding and removing the current government’s restrictions on solar and wind and building more interconnectors to improve security of supply. The party aims to reach at least 80% renewable electricity in the UK by 2030.

The Liberal Democrats would also seek to cut energy bills and reduce fuel poverty by providing retrofits for low-income homes to improve energy efficiency standards. They would introduce a zero-carbon standard to all new homes and non-domestic buildings by 2021. The party would also increase minimum energy efficiency standards for rented properties.

There would be a focus on investment in carbon capture and storage facilities and support to companies on cutting emissions. The party would also pass a new Clean Air Act, based on WHO guidelines.

You can read the full manifesto here

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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Background

Ofgem has two main projects that serve as a review of transmission, distribution and balancing charges to facilitate a transition to a more effective network. These are:

• The Access and Forward-looking charges review is looking at the ‘forward-looking charges’. This sends signals to users about the effect of their behaviour and encourages them to use the networks in a particular way; and
• The Targeted Charging Review (TCR). This examines the ‘residual charges’ which recover the fixed costs of providing existing pylons and cables, and the differences in charges faced by smaller distributed generators and larger generators (known as Embedded Benefits).

Specifically, the TCR has evaluated two elements of network charges within the Significant Code Review (SCR) process. These are reforms to how residual charges are set and the non-locational Embedded benefits.

Decision on Residual Charges

Ofgem has decided to implement a fixed residual charge for final demand consumers. These will be levied for transmission charges in 2021 and distribution charges in 2022. These are characterised as a series of fixed bands, including a single fixed charging band for domestic consumers and a range of fixed charging bands for non-domestic customers.

For transmission charges, charges for non-domestic consumers will use a series of fixed charging bands set for all of the country.

Changes to distribution charges will see domestic consumers pay a single residual charge set for each licensed area. Non-domestic consumers will be charged on the basis of a set of fixed charging bands also set for each distribution area.

Bands for non-domestic customers will be determined by a consumer’s voltage level. Where further segmentation is required, further boundaries can be defined based on agreed capacity for larger consumers with readily available data, and net consumption volume for smaller consumers.

The series of fixed charging bands will be published at a national level and will then be set for each Distribution Network Area. Ofgem will review and revise these charging bands and their boundaries as appropriate so that the outcome of such reviews can be implemented alongside of new electricity price controls.

Ofgem believes this to be the strongest option of those considered, as it is the least avoidable leading to minimised harmful distortions. The regulator received feedback from stakeholders supporting its view that the option would help achieve a positive balance across the charging segments.

Decision on ‘non-locational’ Embedded Benefits

The key purpose of the review of Embedded Benefits was to reduce harmful distortions which impact competition and the efficiency of the electricity market. In order to meet this objective, Ofgem has outlined a three-step process to achieve a full reform:

1. The implementation of partial reform in 2021, to deliver the benefits to consumers by removing the two Embedded Benefits (the Transmission Generation Residual which will be set to zero and the offsetting of suppliers’ balancing services charges by reducing the Suppliers net imports at the Grid Supply Point) which cause harmful distortions.
2. The launch of a second taskforce to consider the application of the TCR principles to balancing services charges.
3. The second taskforce’s work and resulting modifications should deliver reforms to balancing services charges.

Implications for Triad

Ofgem has decided that the reform to transmission residual charges should be implemented in 2021 and distribution residual charges in 2022. The regulator believes that this is an appropriate compromise between addressing the largest distortions within the market to deliver consumer benefits, while reducing the distributional impacts on consumers.

A preferred implementation option of April 2021 for transmission residual charge reforms will eliminate the incentive for Triad avoidance in the following winter periods. This leaves one final Triad season to take place over Winter 20/21.

How this may affect consumers

Through the TCR residual charging reforms, Ofgem aims to reduce the distortions caused by the current system. This encourages network users to take measures to lower their contributions to residual charges.

Where residual charges incentivise behaviour – such as load reduction which reduces the share of charges paid for by that user – this results in an increase in the share to be paid by other network users. This in turn increases the incentive for other users – who then pay an increased proportion of the residual charge – to take action to reduce their charges.

It is Ofgem’s view that all final demand users who benefit from the electricity network should pay towards its upkeep in a fair manner.

Under the final TCR decision, Ofgem expects the cost of maintaining the electricity grid to be spread more fairly. As a result, the regulator says that consumers will save £300m yearly, from 2021, with £4bn-£5bn in cumulative consumer savings up to 2040.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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Last week saw UK gas and power demand rise to their highest levels for the winter so far. This was driven by a significant increase in domestic consumption as households ramped up their heating to combat the cold.

Minimum temperatures in London dropped to minus 2 degrees, the lowest since early February. In parts of Scotland, temperatures overnight reached lows of minus 10 with another cold spell forecast for next week.

Year-on-year gas demand

Overall gas demand reached 350mcm. This is the highest since early February, with domestic gas consumption rising to over 240mcm as households increased heating use. Year-on-year gas demand was 100mcm higher as November 2018 saw the UK enjoying a late heatwave with a prolonged spell of above average temperatures. This kept gas demand under 250mcm.

LDZ Gas Demand

The increase is even more prevalent in LDZ gas demand. This has averaged 190mcm/d so far in November, the highest in more than five years. Domestic gas demand in November is so far 45% higher month-on-month. It’s 20% higher than the same period in November 2018.

October gas demand was also the highest in over five years with consumption up 20% since 2017. As a share of overall gas demand, LDZ has also climbed strongly in recent months. Domestic use accounts for over 70% of the country’s overall gas consumption.

Gas is also playing an increased role in the electricity sector, which adds another element to this winter’s higher gas demand. Demand from power stations reached 78mcm last week, the highest since January. Electricity generated by gas power plants has averaged 14.9GW per day in November. This is the highest since January and an increase of 2GW on November 2018. This is despite a continued trend of reduced electricity demand from 2018 to 2019. Lower wind output, which is on average 1.5GW lower year-on-year is contributing to the increased gas use for electricity generation.

The last time domestic gas demand was close to this high was in 2016. Front-month gas prices climbed nearly 30% as temperatures dropped in early November. In November 2018, front-month gas prices averaged 50p/th – 25% higher than the current Dec 19 contract.

However, so far this winter, gas prices across the curve have moved lower, breaking below a long-standing trading range. The December 19 gas contract has fallen 20% since the start of October, while the Summer 20 prices are at their lowest level in over 18 months.

High demand no match for supply flexibility

If demand is higher then why has the price reaction been muted or even bearish? Increased gas demand from home heating and the electricity sector during the last three weeks of cold temperatures have seen very little price support. This is because the impact of the increased consumption has been entirely offset by the levels of spare and flexible gas supplies available to the market. This is notably from an influx of LNG tankers and record high levels of gas in storage. Supply levels are persistently matching fluctuations in demand with flexibility from Norway, LNG and storage helping to manage the higher demand levels seen recently.

LNG Imports

The UK has enjoyed an influx of LNG arrivals this winter, with Britain an attractive destination for tankers amid an oversupplied global market for the fuel. Fifteen tankers arrived in October, eighteen tankers are booked for November and seven arrivals are confirmed for December. LNG imports for Q4 2019 have already surpassed levels from Q4 2018.

The influx of LNG and flexibility from Norwegian and UK gas flows have left storage withdrawals and Interconnector imports struggling to get gas onto the grid. Both sources offer around 150mcm of combined gas supplies which can be attracted to market when required. It is this extent of spare capacity available to the gas system which has kept prices so depressed, in spite of rising demand levels.

Gas Storage Withdrawals

Storage withdrawals had averaged 8mcm/d for the winter and colder temperatures last week lifted that withdrawal rate to around 40mcm/d. The potential for sendout is over 90mcm/d across the country’s seven facilities.

However, even with last week’s increased withdrawals – which have seen reserves declining at 0.4TWh per day – stocks are still at record highs for the time of year. European storage stocks are also at all-time highs, after surpassing 1,000TWh in September, with zero net withdrawals recorded so far this winter.

European imports via the Interconnector have been untouched, with gas prices unwilling to increase to a sufficient premium over the European market to encourage deliveries. If the price response was sufficient, however, an additional 60-70mcm per day of gas could be available. This is further strengthening the health of the current gas system and its flexibility in responding to spells of higher demand.

With the extent of spare capacity available, the gas system is able to manage prolonged spells of below seasonal-normal temperatures. It will likely take a severe cold snap, alongside a breakdown in supply or a slowdown in LNG imports to warrant a significant rebound in prices across the energy market.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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Despite sterling competition, we’re delighted to have been crowned Energy Buying Team of the Year. The honour underlines our continued focus on best-practice risk management and flexible procurement trading. Managing energy risk related to flexible energy procurement has been a core part of our business for the last 20 years. In fact, we were one of the very first energy consultancies to support clients with flexible buying strategies and trading.

Commenting on our win, the Energy Awards judging panel said they were “impressed with the great examples of client savings and the logical approach to energy procurement. The quality assured approach to these processes with sound market advice has resulted in great customer feedback.”

A team effort

There are multiple teams working collaboratively to make the flexible procurement service a success. Our Market Intelligence team track and interpret the energy markets so our clients don’t have to. The insights they deliver ensure our energy traders are on hand to buy and sell energy, working in-line with our clients’ strategy and pre-agreed risk management policy framework.

All our clients are fully supported throughout the energy buying process with a dedicated Account Management team. One of the team was recognised earlier in the year as the TELCA Secret Star award winner. By fully managing the energy buying process, liaising with suppliers, creating savings and minimising risk we allow our clients to focus on what they do best – running their business.

Energy trading success

In just one week, our flexible procurement traders locked in a massive £343,000 for our flexible procurement clients. In fact, in a single month – March 2019 – savings topped £771,000. What’s more, calendar year savings have exceeded a staggering £2.1million for the period January – August.

We can help you

Find out more about our flexible energy procurement services here or talk to us today on 01527 511 757 to see how we can help you.

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LNG has been the main game changer with the deluge of tankers flooding in to Europe over the last year. Increased export capacity in the US and Russia has led to the increase in extra imports to Europe. It is also a symptom of the global oversupply in the worldwide market place. The liquid commodity markets and high import capacity make the UK an ideal location to offload any excess supply. LNG terminals are currently operating at 75% of their capacity, with all the extra gas being sold into the NBP pushing prices lower.

LNG imports graph

European imports have been virtually non-existent throughout the winter but more gas could be attracted through these pipes. There is a potential capacity of 94 MCM/d to come over the BBL and the Interconnector. To start attracting this gas the premium over TTF would firstly have to rise above the NBP entry charge of 1.56p/th and then cover the cost of using the pipelines. This means that if prices increase their premium over the continent to more than 2p/th additional gas will start coming to Britain.

Given the competition between supply sources, storage just cannot make it onto the grid, even on higher demand days, and this capacity overhang is weighing on prices.

Gas spare capacity graph

However, the falls in prices for power have been less substantial and purely driven by the falling cost of fuel. Fundamentally the UK grid is seeing some of its tightest conditions in years. With nearly 3GW of coal capacity having retired in the last 12 months. The remaining coal units are now running as baseload and all flexibility is coming from gas. There remains spare capacity but this is the least efficient or most costly plant.

On windless, cold days we are seeing some stress on the system. Currently Monday, 18 November, has a negative margin with 300MW still required to meet anticipated demand. This has pushed power prices to their highest since February at £54.50MWh.

On Wednesday evening we saw the highest demand of the winter so far, of 45.2 GW. The above chart shows where generation was coming from at the peak on the left, with remaining output available for Monday on the right. While this shows the potential generation that could come on at the current price levels, it isn’t expected to on Monday, hence the negative margin.

So far Monday’s price reaction has been relatively muted, but it has occurred at a time when the gas systems oversupply is weighing heavily on the whole energy market. If it was happening amidst different market conditions the price outlook would be very different.

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Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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The Government’s options

The Government has identified two potential trajectories for strengthening the PRS (Private Rented Sector) Regulations. These aim to unlock the economic opportunities of low carbon growth, and deliver important energy and carbon savings:

• The Government’s preferred route is that all non-domestic privately rented buildings achieve a Minimum Energy Efficiency Standard of a B rating, by 1 April 2030. This is provided the measure (or package of measures) required to reach an EPC ‘B’ proves cost effective.
• The alternative option is that all non-domestic privately rented buildings reach a ‘C’ rating by 1 April 2030, if cost effective.

In both cases, the Government recognises that not all buildings will be able to reach the required minimum standard. In this instance the Government proposes that landlords can continue to lease their building (from 2030) providing they can prove that the building has reached the highest EPC band that a cost-effective package of measures can deliver.

The impacts

BEIS estimates that using the ‘B’ rating EPC route, an investment of approximately £5 billion up to 2030 is required. The estimated average payback time would be 4-5 years. Their modelling suggests this will translate to £1 billion in bill savings for business in 2030. This would deliver an overall value of £6.1 billion to the UK economy. The annual benefit to businesses by using this option is projected to be approximately double that of the ‘C’ rating EPC.

Regardless of the option chosen, BEIS proposes that existing exemptions will continue to apply. This means that landlords will be required to carry out upgrades that are cost-effective, with an expected payback on energy savings of seven years or less. If the work cannot meet this criteria then landlords are able to register an exemption, valid for five years.

The proposed timescale

The Government has asked whether a single implementation date of 2030 is appropriate for landlords to meet the determined rating. As an alternative it has been suggested that incremental targets leading up to 2030 could be introduced. This would encourage landlords to improve the EPC rating of their buildings over time.

The consultation is expected to close on 7 January 2020.

Stay informed with EIC insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn. To find out more about our Minimum Energy Efficiency Standard (MEES) solutions click here.

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It also accelerates the seasonal trend towards higher demand during the colder, darker winter months, placing increased pressure on power margins. This can lead to spikes in electricity prices, should supplies struggle to meet the higher demand.

Jump in demand decreases as overall downward trend continues

As forecasts currently stand, the average peak demand for the week following the clock change will be 4.4% higher than the week before. Consumption is expected to rise by almost 2GW as lighting usage increases during the traditionally higher post-work demand period.

However, the forecasted rise in average peak demand in 2019 is lower than in recent years. Notably 2018 which saw the highest percentage change, as consumption rose by almost 4GW week-on-week.

Overall peak power demand has been dampened marginally this year, with consumption after the clock change peaking at 40.6GW on average, 3GW lower than last year. This reduction can be attributed partly to half-term school holidays, which fall on the week either side of the clock change depending on school catchments. Higher renewable levels have also contributed to reductions in demand.

The ongoing trend in reduced energy consumption year-on-year continues, meaning that demand is rising from a far lower base. Improvements in energy efficiency have been helping to reduce electricity use over the last ten years. A large part of the reduction in peak demand has been the use of new technology, resulting in smart and more efficient appliances, able to do more with less.

Expected demand before this month’s clock change is 5GW lower than the highest peak in 2015. Furthermore, the forecasted post-clock change peak is the lowest on record.

The role of renewables

The increase in wind and solar capacity in recent years has contributed to the overall demand reductions. Higher volumes of on-site renewable capacity allow more generation to be provided off-grid as homes and businesses generate their own electricity supply during windy or sunny spells. This reduces demand on the national transmission system. The high levels of solar availability during the summer season were a particularly strong influence on demand levels this year as on-site solar panels increased embedded generation. This reduced demand requirements for the transmission network.

Wind power continues to deliver a growing percentage of the UK electricity mix. By the end of September 2019, the UK’s fleet consists of over 10,000 wind turbines with a total installed capacity of over 21.5GW. Overall wind generation in the UK has so far been 33% higher through 2019 than over the same time period last year.

What happens when there’s no wind?

While high winds have the capability of cutting power demand, one of the biggest dangers to the National Grid electricity network is a high demand scenario, at a time when wind output is very low.

Lighting has a bigger impact on electricity demand than heating, as the majority of home heating is gas-fired. However, during severe cold snaps, electricity demand does spike as additional heating is needed to cope with the very low temperatures. This scenario occurred during the Beast from the East cold snap in February last year. However, robust winds provided high levels of low cost electricity to the grid.

A lack of wind would see supply margins placed under significantly more stress during a similar cold snap this winter. This would require additional supply being provided by gas and coal plant or imports to make up for the increased demand. Such a scenario is likely to require significant price rises in the Within-day and Day-ahead markets.

The National Grid’s Winter Outlook for 2019/20 expects that there will be a sufficient supply margin to accommodate a wide range of security of supply scenarios. However, the organisation’s statistical 1-in-20 peak demand forecast predicts a demand of 499mcm/d, greater than the highest recorded gas demand. This is an unlikely scenario, but demonstrates how a period of high demand and low renewable availability could coincide to increase short-term prices.

An end to the clock change?

There have been proposals dating back to 2015, from members of the European Parliament, to end summer time observance. In September 2018 the European Commission proposed an end to seasonal clock changes, asking that member countries decide by March 2019 which time they would observe year round. The proposal was approved in March 2019, by 23 votes to 11. However, the start date has been postponed until 2021 to allow a smooth transition.

The United Kingdom is due to leave the EU before the reform becomes effective, meaning that it would be left to the government to make their own decision on observing summer/winter time. If continued, Northern Ireland would have a one-hour time difference for half the year with either the Republic of Ireland or the rest of the UK. The House of Lords launched an inquiry in July 2019 to consider the implications of this, with a call for evidence ongoing.

STAY INFORMED WITH EIC INSIGHTS

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn.

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The action follows a highly critical 33 page report publicised in 2018 by the Intergovernmental Panel on Climate Change (IPCC). The IPCC is the United Nations body for assessing the science related to climate change.

The report focused on the impact of limiting global warming to 1.5°C. Limiting warming to 1.5°C rather than 2°C significantly reduces the climate change risks according to Professor Jim Skea, who co-chairs the IPCC.

What’s alarming is the scale of the challenge ahead of us to ensure we achieve these targets and do not allow the situation to escalate further.

Five steps to achieving the 1.5°C have been announced:

1. Global emissions of CO₂ need to decline by 45% from 2010 levels by 2030
2. Renewables are estimated to provide up to 85% of global electricity by 2050
3. Coal is expected to reduce to close to zero
4. Up to seven million sq km of land will be needed for energy crops (a bit less than the size of Australia)
5. Global net zero emissions by 2050.

Paris Agreement

The Paris Agreement brings together nations towards a common cause to undertake ambitious efforts to combat climate change. It was originally signed by 196 countries back in 2016.

In line with the IPCC report its core aim is to keep the global temperature increase this century well below 2°C above pre-industrial levels. In particular, to pursue efforts to limit the temperature increase even further to 1.5°C.

2019 – a watershed year for climate change?

Together with the impact of Greta Thunberg – the 16 year old Swedish activist – there have been a number of key factors driving the climate change movement this year. At Glastonbury festival in June 2019, 2,000 festival goers joined protestors to stage a procession across the site.

At the United Nations Climate Action Summit in late September you may have missed the news that Russia, the world’s fourth largest polluter will finally join the agreement. This announcement was overshadowed by the stirring “You have stolen my dreams” headlines surrounding Greta Thunberg’s appearance. Hailed as “the voice of the planet” she’s already been nominated for the Nobel Peace Prize.

Despite the raised awareness there are real fears that most of the world’s biggest firms are ‘unlikely’ to meet the targets set. Only a fifth of companies remain on track according to fresh analysis by investment data provider Arabesque S-Ray. Of 3,000 listed business only 18% have disclosed their plans.

UK reaction

In reaction to the IPCC report, UN Paris Agreement and other related research findings and movements, the UK public sector is taking positive, proactive steps to mitigate climate change risks.

Councillor Carla Danyer led the charge in Bristol by first declaring a climate emergency and this has sparked a wave of similar responses.

In June 2019, the UK became the first major economy to pass a net zero emissions law. The new target will require the UK to bring all greenhouse gas emissions to net zero by 2050. Net zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage. Other countries setting similar targets include Ireland, Denmark, Sweden and France as well as the US state of California.

Many UK councils, NHS Trusts and universities have publically declared their long term targets. Some aiming for speedier action by declaring net zero 2030 targets. These include Ipswich Borough, Vale of Glamorgan and Telford & Wrekin councils.

Unsurprisingly, Bristol University is one of the leading educational facilities leading the way. To date they’ve cut carbon emissions by 27% and are well on their way to achieving their target to become carbon neutral by 2030. The University of Cambridge, along with others, has set a net zero target of 2038 and has announced it is adopting science-based targets. On one website – climateemergency.uk – 228 councils are listed as having signed up to the targets.

In Boris Johnson’s first speech as Prime Minister, he affirmed the UKs commitment to a net zero future. Johnson proclaimed “Our Kingdom in 2050… will no longer make any contribution whatsoever to the destruction of our precious planet brought about by carbon emissions,” he said. “Because we will have led the world in delivering that net zero target.”

Steps towards a better future

According to the Centre for Alternative Technology (CATs) Zero Carbon Britain research a modern, zero emissions society is possible using technology available today.

Below we’ve outlined some key initiatives that can help the UK achieve its net zero ambitions:

• Businesses implementing science-based targets.
• Improving built environment efficiencies. Upgrading old buildings and ensuring new buildings must meet higher energy efficiency standards.
• A shift to electric vehicles and the continued battery storage revolution.
• Decentralised energy. Home and local energy generation.
• Shift to renewable energy sources.
• New policy.

The Aldersgate Group issued a green policy manifesto to Boris Johnson on 1 August 2019. They are a politically impartial, multi-stakeholder alliance championing a competitive and environmentally sustainable economy. Members of the group include Friends of the Earth, BT, M&S, Tesco, National Grid and Sky. Their green manifesto focuses on 4 key areas for the government to take decisive action and provide greater policy detail:

• Delivering a Clean Growth Strategy Plus (CGS+) that matches the ambition of the net zero target. This should consist of a targeted update to the existing Clean Growth Strategy to increase ambition where required (for example on zero emission vehicle roll-out). Plus it should incorporate concrete policies that accelerate private sector investment to decarbonise priority sectors. These include surface transport, buildings and support the competitiveness of industry during this transition.
• Passing an ambitious Environment Bill that safeguards environmental protections currently enshrined in EU law. They believe it must set ambitious and legally binding targets for environmental improvements in line with the vision of the 25 Year Environment Plan.
• Implementing the Resources and Waste Strategy, through the introduction of detailed regulatory measures and fiscal incentives that drive greater resource efficiency and cut waste across the economy.
• Building on the Green Finance Strategy, to rapidly grow private capital flows into the green infrastructure required to deliver the UK’s net zero target and the objectives set out in the 25 Year Environment Plan.

Our view

At EIC we believe new government policy is one of the most important steps needed to turn sentiment into action. Legislation relating to major energy users such as ESOS and SECR are steps in the right direction but they aren’t enough. Without doubt more effective policy is needed, to not only ensure energy and carbon is measured, but also that carbon reduction strategies are developed and implemented across the UK. Too often business cases for energy and carbon reduction are created and filed, never to be signed off.

The post Climate Emergencies and Net Zero – what you need to know appeared first on EIC.

To help our clients, EIC provides a Triad Alert service. We have successfully forecast each of the three Triad periods for the last 7 years. By predicting Triads each winter, EIC has saved customers millions of pounds in transmission charges.

WHAT ARE TRIADS?

Triads are three half-hour periods with the highest electricity demand between 1 November and 28 February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads.

A NEW LOW?

The 2018/19 Triad season saw electricity demand fall to a new all-time low. Peak electricity demand for the three half hour periods averaged 45.6 GW, with the third Triad occurring as demand was just 45.0 GW.

By comparison in 2017/18 average demand for the Triads was 47.5 GW. Maximum Triad demand has fallen by over 11 GW (~20%) in the last ten years. This reflects an overall trend towards lower electricity consumption. Major advances in technology and energy efficiency for appliances, as well as a move to smarter lighting are contributing to sustained year-on-year demand reduction.

This trend provides an opportunity for an even lower Triad figure this year. Weekly peak power demand during 2019 has so far been lower than its equivalent week from 2018 on two-thirds of occasions.

Greater role for wind

Another factor contributing to the decline in demand is the increase in installed wind capacity over the past decade and the increasing share of the fuel mix secured by renewable generation. The latest BEIS figures from Q2 2019 showed renewables capacity rising 8% year-on-year, with its share of the fuel mix reaching new highs of 35.5%.

Most of this capacity is connected to the Grid so does not impact demand. However, around 6 GW (~30%) of wind capacity is embedded – it is connected to local distribution networks. As a result, it can influence outturn demand. Each MW of embedded wind generation is a MW of demand which otherwise would need to be provided by the transmission network. Therefore on days of high wind generation there may be a reduction in demand, triggered by the extra embedded wind levels. Average embedded wind output has increased by more than 1 GW over the past 10 years, contributing to the steady trend in demand reduction.

Last year the level of embedded wind generation varied by 3 GW, depending on nationwide wind conditions. This led to a demand swing of the same amount. This is having a growing influence on Triad forecasting as the increasing demand swing reduces the risk of a Triad occurring on days with high wind output. As a consequence, Triads are more likely to occur on days of very low wind generation. This was the case last year when each Triad occurred on a day with less than 1 GW of embedded wind generation.

HOW MANY MORE TRIADS?

The success of Triad avoidance in reducing costs for the end user has forced regulator Ofgem to undertake a change to the charging methodology for distribution costs. A consultation launched in December 2018 proposed changes which could remove the incentive for Triad Avoidance.

The Targeted Charging Review aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. Under current proposals, Triads would change to a fixed or agreed capacity, eliminating the need for avoidance in the future. Ofgem originally nominated a deadline for the reforms for April 2020. However, a recently released updated timeline has indicated that the regulator is now aiming for an implementation date of April 2023. As a result, it is possible that there will be a maximum of four winters remaining available for Triad forecasting, including the upcoming season. The removal of the Triad scheme will increase costs for business that currently benefit from Triad avoidance.

EIC TRACK RECORD OF SUCCESS

EIC has an in-house model which has successfully forecast every triad period for the last seven years. We provide clients with comprehensive alerts advising when a Triad is forecast, so they can reduce consumption accordingly.

Our Triad Alert Service forecasts the likelihood of any particular day being a Triad and sends alerts before 10am. This allows businesses to take informed action to avoid high usage during these half-hour periods. It also minimises disruption to their everyday activity. We monitor the market throughout the day and in the event of significant change will send out another alert in the afternoon. The daily report includes foresight of the next 14 days alongside a long-term winter outlook allowing clients to plan ahead.

Calling an alert every weekday would generate a 100% success rate, however we recognise the negative impact this could have on our clients. Organisations would incur major damage to revenues if required to turn down their production each day for 4 months ‘just in case”. At EIC our aim is to provide as few alerts as possible.

Last year we successfully predicted all three half-hour periods. The only tracked TPI or supplier which issued fewer alerts than EIC failed to predict all of the Triad periods.

HOW WE CAN HELP

We have helped hundreds of clients avoid these transmission costs by providing them with the tools needed, giving EIC an enviable track record in Triad prediction.

For those that took action last year, demand was cut by an average of 41% compared to standard winter peak-period half-hour consumption.

This resulted in significant cost savings, with clients who responded to our Triad Alerts saving on average £180,000. The best result last winter saw a client saving just shy of £1 million in TNUoS charges.

The Triad season begins on 1 November. To find out more about our Triad Alert service click here or call 01527 511 757.

The post Be prepared for Triad season appeared first on EIC.

Penalties for non-compliance are high

Fines for non-compliance could be severe and scheme regulators will issue fixed penalties for a variety of offences. These include:

• Failing to notify of compliance or to maintain sufficient records (up to £5,000)
• Failing to undertake compliance activities or making misleading statements (up to £50,000 plus £500 per day up to 80 days)

Businesses that are subject to a penalty will have their details published online.

An arduous task if not prepared

In order to ensure compliance, businesses need to calculate their total energy consumption; this can be an onerous task if sound internal data collection processes are not already in place. Appropriate compliance activities should then be completed covering significant energy consumption or 90% of total energy consumption. Finally, ESOS compliance must be reviewed and signed-off by a qualified Lead Assessor, of which there are a limited number.

Environment Agency external audit

ESOS compliance is subject to an external audit by the Environment Agency (EA). As such it is critical for businesses to ensure compliance activities are delivered to a high standard. In ESOS Phase 1, the Environment Agency audited approximately 1 in 20 businesses that notified compliance. Many of the enforcement penalties related to maintenance and accuracy of records.

Leniency is unlikely

Regulators are less likely to be lenient in this phase of ESOS than they were in Phase 1. This applies to both late compliance and the standard of compliance activity such as energy audits. The deadline is in just two months and businesses that qualify still have an opportunity to ensure compliance, although quick action is required.

The benefits of ESOS

If engaged with effectively, ESOS serves as an excellent way for businesses to identify ways in which they can reduce their energy consumption as well as associated costs and carbon emissions. EIC have engaged with many businesses that have implemented energy saving opportunities following their ESOS Phase 1 compliance activities.

Why choose EIC?

Whether it’s ESOS, SECR, or CCAs, EIC will work with you to reach compliance deadlines and targets. In Phase 1 of ESOS our team identified 2,829 individual energy efficiency opportunities, equivalent to 461GWh or £43.9m of annual savings across 1,148 individual audits. We also helped over 300 ESOS Phase 1 clients avoid combined penalties of over £48m, based on maximum fines.

To find out more about how we can help you comply and implement recommendations post ESOS compliance, call us on 01527 511 757 or email esos@eic.co.uk

The post ESOS Phase 2 – Deadline Approaching appeared first on EIC.

We’re here to simplify the process of buying and managing energy. We match clients with the right contract for their business. The Energy Awards recognised our success in this field and have shortlisted EIC for Energy Buying Team of the Year for our flexible procurement offering.

Flexible Procurement

Our flexible purchasing solutions begin with a strategy development workshop with our clients. We conduct a detailed discussion of the client’s business objectives and appetite for risk, seeking to identify their key priorities for the contract. We also review their current situation and any upcoming projects that could affect their portfolio or consumption.

Public Sector Portfolio

Our Public Sector Portfolio is an OJEU compliant group flexible purchasing solution. It adds value by removing the administrative burden faced by public sector organisations when procuring contracts, and reduces the timeframes when securing their supply agreement. This has proven a real hit with universities, councils and NHS Trusts.

A team effort

There are multiple teams working collaboratively to make the flexible procurement service a success. Our clients are fully supported throughout the procurement process with a dedicated Account Management team. Traders work within the parameters of a client’s strategy making decisions based on insight from our Market Intelligence team.

Trading success

In just one week our flexible procurement traders locked in a massive £343,000 for our flexible procurement clients. In fact in a single month – March 2019 – savings topped £771,000. What’s more, calendar year savings have exceeded a staggering £2.1million for the period January – August.

Category 2 – Energy Data Collection and Analysis

Our shortlist for the Energy Data Collection and Analysis award focuses on our 360 Strategic Energy Review along with our Triad model and alerts.

360 Strategic Review

Our 360 Strategic Review is a powerful data tool created to unearth hidden savings potential for our clients. We take half-hourly data and analyse it on a site-by-site basis. We focus on where reductions in usage can be made and the associated cost savings. It looks at shifting consumption to avoid the peak Distribution Use of System (DUoS) charges, reducing consumption in the winter to mitigate Transmission Network Use of System (TNUoS) charges, and assessing usage against operational hours to identify out of hours wastage. On average we’ve identified savings of £130,639 per customer so far.

Triad model and alerts

National Grid identifies three Triads each year in order to calculate the Transmission Network Use of System (TNUoS) charges an organisation will incur. Such transmission costs can be reduced if demand is decreased when a Triad is expected. Our Triad model and alerts help clients plan their electricity usage around these dates in order to lower their energy bills.

Our model used from 1 November to the end of February,  identifies which days and what time periods on those days could be a Triad. We then inform our clients using our alert service whether they need to take action to reduce demand and avoid a Triad. We have issued an alert on all three Triad dates for the past 7 years. Last year we issued 24 alerts compared to suppliers who had similar results issuing on average 29 alerts. It’s vitally important for us to issue as few alerts as possible to avoid any unnecessary client interventions.

Awards Ceremony

Our teams work really hard every day to ensure our clients get the right solutions for their businesses. It’s great to have been recognised for our efforts. We’re looking forward to the awards ceremony which take place on Thursday 21 November at the London Hilton on Park Lane. We’ll keep you posted on our success.

The post The Energy Awards Shortlist Success appeared first on EIC.

Gas prices saw high levels of volatility last week as the market digested the three unexpected ‘black swan’ developments of the previous week, which had triggered significant price spikes. An attack on oil facilities in Saudi Arabia led to a further price rise, as over 5% of global oil supply was shut down. The October gas contract hit highs of 40p/th, with the Winter 19 market at two-month highs of 52p/th. However, some of the uncertainty surrounding supply and demand was tempered, prompting prices to reverse some of those gains. EDF reported just 6 of its nuclear reactors are affected by welding issues, believing power stations do not need to close.

Russian gas flows via the OPAL pipeline, saw little change, despite the tighter restrictions. Furthermore, Saudi Arabia vowed to return its oil output to normal levels by the end of the month, quicker than initially feared. Short-term supply-demand fundamentals are also weighing heavily on the front of the gas curve, with October prices dropping to 32p/th. The Langeled gas pipeline is to return from maintenance tomorrow, boosting Norwegian flows to the UK.

Meanwhile, LNG sendout is expected to remain strong next month as the UK confirms three tankers already booked for October. Above seasonal-normal temperatures are also forecast for the next two weeks, slowing the typical rise in heating demand ahead of the winter season. While winter supply risks have been somewhat tempered, contracts from Winter 19 onwards remain elevated amid uncertainty over French nuclear power, Russian imports and tensions in the Middle East which are supporting oil prices. As a result, seasonal gas contracts are holding in the middle of their summer range, between their July highs and September lows.

Power

Power prices mirrored movements in the gas market, with short-term contracts falling sharply across the week. The rest of the electricity curve remained elevated. Short-term contracts were highly volatile following three black swan developments. An additional oil attack in Saudi Arabia provided further price support as prices moved to fresh highs early last week.

Seasonal power contracts hit six-week highs. Prices eased after EDF reported only six reactors are affected by welding issues and indicated no power stations need to close. However, the outcome of an investigation by the regulator ASN is still unknown and that body will have the final say on plant closures. Oil prices corrected quickly as Saudi Arabia promised a return to full production by the end of the month.

Short-term power prices fell further, in line with declining gas contracts, which were weakened by the current healthy supply-demand fundamentals. Day-ahead gas prices fell 22% with front-month prices down 13%. The equivalent power contracts also moved lower on the weaker gas costs, but overall declines were more gradual across the week. Longer-dated electricity contracts were marginally higher week-on-week, despite giving back some of their early gains. Prices are still underpinned by elevated carbon costs, with the price of allowances remaining above €25/tCO2e. Seasonal contracts are holding in the middle of their summer range, above the early September lows, and below the peaks from July.

Stay informed with EIC Insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the most-timely updates you can find us on Twitter and LinkedIn. Follow us today.

Visit our web page to find out more about EIC Market Intelligence and how we keep our clients informed at a frequency to suit them.

The post Weekly Energy Market Update 23 September 2019 appeared first on EIC.

Black Swans

In less than a week of trading, front-month gas prices climbed 25%, and the corresponding power contract rose 15%.
The Winter 19 power contract spiked £4.55 in just one day, while Winter 19 gas jumped over 6p/th, the largest daily move on a seasonal contract since at least 2008.

The initial price spikes were triggered by the simultaneous discovery of three ‘black swans’, an industry term describing unpredictable events that go beyond normal expectations of the situation.

A fourth such event occurred a few days later when rebels attacked Saudi Arabian oil facilities. Brent and WTI crude oil prices saw the highest within-day spikes in 30 years, with both markets gaining more than $8/bbl in one day. The jump in the oil market provided more bullish support to the wider energy mix, with longer-dated gas and power contracts moving to new highs on the back of the increased oil costs.

As these unpredictable events have developed, energy prices have given back some of the exceptional gains. However, prices remain elevated across the month, above the lows seen in early September. Here we explain what these issues were and how they are impacting on the energy market.

Groningen Gas

The Dutch Government reported that the production cap at its Groningen gas field will be lowered to 11.8bcm for the upcoming gas year from 1 October 2019. The state also confirmed that the site – previously Europe’s largest – would close entirely by 2022, eight years earlier than expected.

Production at the field has been gradually slowing for seven years after drilling led to a series of earthquakes, forcing legislation to limit output. In 2013 the field was producing 54BCM/y, declining to 11.8BCM for 2019/20. While the reduced supply from Groningen was somewhat expected within the market, supply was expected to be available for another eight years. This curtailment helped to support a sudden price rise across the curve.

The loss of production has been reflected in the loss of flexibility within Dutch gas supply, and therefore reducing the ability to respond to spikes in demand or other supply issues. Five years ago Dutch gas production was able to ramp up to 277MCM/d in response to high demand on a cold day. However, production last winter peaked at just 164mcm, while output so far in September 2019 has averaged under 50mcm/d.

OPAL Pipeline

The OPAL pipeline in Germany connects the Nord Stream pipeline with connections in central and western Europe. This month the European Commission overturned a ruling in 2016 which had effectively allowed Russian giant Gazprom a near monopoly of the volume of the pipeline, with 90% access. A complaint from neighbouring countries, led by Poland, saw this ruling challenged and the Russian transit through the link must now be cut to 40%.

The OPAL pipeline had allowed Russian gas to reach central Europe via Nord Stream and onwards, without transiting war-torn Ukraine. The EU decision will see Gazprom’s access cut by half, potentially reducing the availability of Russian gas to enter Europe, unless other transit routes are made available.

French nuclear power plants

EDF reported welding issues with at least five of its nuclear reactors, which could force shutdowns of the power stations. This would greatly reduce available power supplies for France, where 80% of its generation is supplied by nuclear and the majority of domestic heating is electric. Demand for imports will increase as will demand for more expensive and less efficient gas and coal plant, which also increases the consumption of carbon.

The UK’s interconnection with France sees imports from France provide the marginal supply to Britain, ensuring the countries’ pricing is closely aligned. Issues with French nuclear manufacturing had previously occurred in autumn 2016 when over 40% of France’s nuclear fleet closed down. This caused record spikes in UK power prices, with the Day-ahead market at over £150/MWh, and the front-month contract doubling from £40/MWh to over £80/MWh.

The potential loss of nuclear generation adds significant risk to the coming winter, particularly if tighter power supplies coincide with cold, windless weather conditions when gas demand is already at its highest levels for the year.
Since the initial announcement, EDF Energy has confirmed just six nuclear reactors are affected by the welding issues identified. The company believes no immediate action is required, an announcement which triggered a pull back in prices. However, the ultimate decision on whether to close nuclear plants for repairs lies with the French nuclear regulator ASN.

Saudi Arabia oil attack

The last piece of news impacting energy markets in September was a series of rebel drone attacks on major Saudi Arabian oil processing facilities at Abqaiq and oil fields at Khurais. The United States has blamed the attack on Iran, but Tehran claim no involvement. US-Iranian tensions were already heightened after a failed nuclear power agreement last year and attacks on oil tankers in the Middle East.

The rebel attack in Saudi Arabia forced around 7 million barrels per day of production offline, halving the country’s output and impacting on more than 5% of global oil supply.

However, Saudi Arabia confirmed it met customer orders by tapping into substantial storage reserves. Furthermore, the affected facilities would be back to pre-attack volumes by the end of September. Tensions remain heightened in the region but the swift return to operation of the affect facilities prompted oil prices to drop back from the earlier peaks.

Price Outlook

Uncertainty lingers over these issues, despite fresh developments so the potential for further price spikes remains in play. However, within the recent volatility on energy contracts, prices across gas, power, oil, coal and carbon remain within a sideways range. In fact, the majority of contracts range-bound since the start of the summer season.

The threat of a break below this range has been mitigated by the recent price spikes. However, the highs reached in July have yet to be tested. How the energy market breaks out of this range will determine future price action.

The post What has caused September price swings? appeared first on EIC.

Residual charging proposals

In the ‘minded-to’ consultation, published in November 2018, Ofgem proposed two leading options for reform for residual electricity network charges. The options were; a fixed charge, or an agreed capacity charge. Ofgem indicated that they preferred a fixed residual charge.

Most respondents to the consultation also expressed support for the fixed charge. However, there was some disagreement with the structure of the proposal, predominantly with user segments associated with this pricing option.

Some respondents expressed that the fixed charges should take more account of the diversity of non-domestic users, pointing out that individual bands could contain a wide range of different user sizes. It was also highlighted that Ofgem’s proposed basis for segments could be seen as arbitrary.

In light of this feedback, Ofgem’s refined proposal for non-domestic customer segmentation is that:

• total allowed residual revenue would first be apportioned between voltage levels, on the basis of net volumes, as set out in the November 2018 minded-to consultation;
• non-domestic segment boundaries would be set in terms of agreed capacity levels for users at higher voltages where this data is widely available, and net volume levels at Low Voltage (LV). This is in place of segmenting these users on the basis of the line-loss factor classes (as set out in the November minded-to consultation).

Ofgem has identified five national level charging bands for Low Voltage non-domestic users and five each for High Voltage (HV) / Extra High Voltage (EHV) non-domestic users. The banding is the same for HV and EHV customers, but their share of the residual charges is calculated at voltage level resulting in fifteen charges in total.

The refined band thresholds would be applied on a consistent basis across the country. Users would be allocated on a historic basis and updated in line with price controls. Incentives are expected to be reduced in a bid to change behaviour in response to residual changes.

The option for agreed capacity has been left open by Ofgem. The regulator has stated that where more users collect agreed capacity data there could be the opportunity to transition charges to an agreed capacity or more appropriate basis.

The Targeted Charging Review

EIC has a more detailed breakdown of the Targeted Charging Review that can be read here.

The post Ofgem publish update to Targeted Charging Review proposals appeared first on EIC.

The CRC scheme ran for eight years, from April 2010 to March 2019. It covered approximately 10% of the UK’s carbon emissions, and raised roughly £790 million annually for the exchequer.

Qualifying businesses

Qualification criteria for CRC Phase 2 was determined as organisations with at least one half-hourly meter using 6,000 megawatt hours or more of qualifying electricity. This was a simpler method of working out relevant organisations and was implemented following Phase 1 feedback that the system was too complex. The seemingly sensible criteria did a good job of identifying significant energy consumers with a test that was simple.

An issue arose however with qualification being considered only in the period April 2012 to March 2013, and then lasting for all subsequent years in the phase. As time went on, there was an increase in companies who qualified, but had subsequently sold off the (usually industrial) sites that made them qualify for the scheme. This left comparatively low energy users stuck in a scheme for which they were no longer suitable. The qualification criteria became less effective over time. We learnt that rolling qualification criteria for schemes helps to avoid this problem and keep qualifying members relevant.

The impact of ‘greening the grid’

The CRC scheme also changed significantly due to the “greening of the grid”. The government’s electricity conversion factors, which denote the amount of carbon dioxide equivalent emissions associated with consuming a fixed amount of electricity, fell approximately 15% year on year over the last three years of the scheme.

This meant that in three years the number of allowances required to cover a fixed amount of electricity, halved. Some members of the scheme were caught out by this, and held a large number of prepaid allowances which were no longer needed due to the drop in conversion factors that was not forecast. This also had a big impact on the total tax revenue generated by CRC, and if the scheme were to continue, we would expect this to be addressed in a review. We learnt that if part of a carbon scheme’s purpose is to raise tax, then there are factors that can unexpectedly influence this.

The future of compliance

Now the CRC scheme is closed, we see a new future opening for carbon compliance. The tax-raising component of CRC has been incorporated into the Climate Change Levy as an increased flat rate across business energy bills in the UK for firms who pay 20% VAT. This is charged per kWh of energy, and so tax revenues are easier to forecast and less likely to change. However, this has shifted the tax burden initially placed on high emitters to being evenly spread across a wider group of energy bills.

The reporting side of CRC has been followed by the new Streamlined Energy and Carbon Reporting (SECR) scheme. This has a larger footprint of approximately 11,000 qualifying firms, and the new qualifying criteria is attached to accounting standards which is both simple and applicable year on year. We welcome the increased attention on emissions that will be generated by the SECR scheme.

Talk to the EIC team

EIC can offer a full review of your organisation to assess your legal obligations and compliance status. We offer ESOS, SECR, Air Conditioning Inspections, Display Energy Certificates and much more, see our full suite of services here. We’ll provide you with a Compliance Report that will summarise our findings, explain the legislation, and outline your next steps.

Our in-house team includes qualified ESOS Lead Assessors and ISO 50001 Lead Auditors, as well as members of the Chartered Institution of Building Service Engineers (CIBSE), the Register of Professional Energy Consultants (RPEC), and the Energy Institute. Call us on 01527 511 757 or contact us here.

The post The end of CRC appeared first on EIC.

To ensure that the Renewables Obligation (RO) scheme runs smoothly, Ofgem calculates a buy-out price and mutualisation ceiling. Where suppliers do not present a sufficient number of Renewables Obligation Certificates (ROCs) to meet their obligation in the reporting period, they must pay the equivalent buy-out price of the shortfall into a buy-out fund.

This fund is used to cover the administration costs of the scheme. It is distributed proportionally to suppliers based on the number of ROCs they produced towards meeting their individual obligation.

The mutualisation ceiling is set for the yearly obligation period. Mutualisation is triggered in the event of a relevant shortfall, meaning that the remaining costs must be distributed across the industry’s other suppliers apportioned to their market share.

What this means for customers

The 2017-18 period saw a shortfall of £58.6m, leading Ofgem to announce it would tighten rules for new market entrants.

Following this and a spree of market exits again, in the compliance year 1 April 2018 to 31 March 2019, not all suppliers met their obligation. This resulted in some of these suppliers also failing to make the subsequent buy-out payments into the required fund.

As of October 2018, Ofgem revealed a combined shortfall of £102,903,066.44 in the England & Wales, Scotland and Northern Ireland buy-out funds.

This means that remaining suppliers will be required to pick up the shortfall, following redistribution of late payments. Suppliers will be required to pay their share of the mutualisation pot, which totals £57.8 million. Therefore customers can expect to see an increase to the RO portion of their energy bill as suppliers apply one-off charges to those with contracts through the 2017-18 period.

EIC Forecast

At EIC, we track the Renewables Obligation and the many other Non-commodity costs, through our forecasts. If you’d like to find out more you can contact us here or call 01527 511 757.

The post Renewable Obligation mutualisation costs added to customer bills appeared first on EIC.

1. Contract Duration

   The duration of your flexible energy supply contract is often driven by market liquidity. The trading windows cover 4 seasons (24 months) for power and 6 seasons (36 months) for gas but it’s always beneficial to put a longer term contract in place so seasons can be traded as soon as they become liquid. Longer duration flexible energy contracts provide optimum trading opportunities to manage prices over time. It is also worth ensuring a supply contract is in place to cover any duration that requires a budget to be set.

2. Non-Commodity Charges

   It’s important to think carefully about your non-commodity costs when securing your flexible energy supply contract. There are many options available. These range from fully fixing all or some non-commodity charges, to having all charges fully passed through at cost. Having all, or at least some, of the demand related charges passed through will reduce premiums. As a result you can reduce costs by load shifting or load shedding. This will however increase the complexity of invoices as the non-commodity charges will be transparent on your invoices with some subject to reconciliations. Non-commodity costs will make up around 67% of your overall costs by 2025. So it’s vital to consider your wider energy strategy as fixing non-commodity costs could limit the potential gains from being more proactive.

3. Trading Flexibility

   Although the commodity element of your costs now makes up a smaller portion of overall spend, this is the element we can influence the most through active trading. Access to supplier trading desks, the ability to refloat volume and the size of tradeable clips are some of the things that should be considered to maximise trading flexibility. Some suppliers will also charge trading transaction fees which can result in additional costs over the duration of the contract so these should be factored into supply contract negotiations. Your preferred trading strategy should also be considered to ensure you’re your contract offers you the required level of flexibility.

4. Volumes

   When tendering a flexible energy supply contract, including accurate volume forecasts will enable a supplier to provide the most suitable contract offer. Some suppliers will apply a volume tolerance to a supply contract and set limits on reforecasting. So if there are any planned or known volume changes due occur in the future it is important to consider these. Having accurate trading volumes in place from the start also enables effective buying strategies to be implement from a trading and budgeting point of view.

5. Administration

   When choosing a supplier to renew with it is important to consider your requirements relating to payment terms, invoicing and data access. Some suppliers can be more flexible than others regarding invoicing and payment terms, and certain factors such as credit can impact on the options available. There are also variations in what a supplier can offer in terms of data access. Whether this is access to consumption data or invoices via a dedicated contact or via an online portal.

6. Negotiation & Analysis

   Suppliers will charge specific fees for managing a contract and offer different premiums for renewable energy for example. Therefore it’s vital to analyse supplier offers on a like-for-like basis to ensure you secure the most competitive contract available. Tender negotiations should consider all aspects of a supply contract to achieve the best contract terms in line with your requirements. The main aim is to procure a competitive contract with a supplier that meets all of your day to day needs whilst offering trading flexibility to suit your strategy.

Click here to find out how our Flexible Energy Procurement solutions can transform your electricity and gas buying strategies.

The post 6 things to consider negotiating a flexible energy supply contract appeared first on EIC.

1. Choose your energy contract wisely
   It’s important to think carefully about your non-commodity costs when securing your energy supply contract. There are many options available ranging from fully fixed to pass-through. It is important to make sure you’re comparing apples with apples when assessing contract offers and that you ensure you know which option best suits your business before committing to a contract. It’s vital to consider your wider energy strategy, a fully fixed contract could limit the potential gains from being more proactive.
2. Better understand your energy data
   Unlock the true potential of your energy usage. Gathering data is one thing, translating and interpreting it is another. An Intelligent Bureau uses clever analytics, algorithms, and artificial intelligence programming to unearth serious business insights that turn your site into an intelligent building, delivering powerful savings, and uncovering new and previously unexplored opportunities for additional revenue. Practical solutions could include a kVa capacity review or reactive power analysis to undercover the need for power factor correction equipment.
3.  Install the right technology to future proof your business
   Transform your data into real-time insights; saving carbon, energy, and other operational costs. Intelligent Building Controls can potentially deliver 20% savings on your operating costs with an ROI under 12 months. Plus additional infrastructure such as wind, solar, battery storage and LED lighting can also help to reduce your usage, cut costs and support net zero carbon targets.
4.  Start to load shift and load shed
   Reduce inefficiencies in performance by managing out of hours’ consumption and shifting or shedding consumption when prices are greatest at certain times each day. Around 10,000 UK firms could make around £20,000 a year in cost savings or revenue by moving or curtailing power use at peak times, according to 2017 analysis by SmartestEnergy.
5.  Take advantage of Demand Side Response (DSR) opportunities
   You can get paid if you’re able to reduce consumption from the electricity grid at busy times when the national demand for energy is at its peak or to help National Grid manage system frequency. There are plenty of schemes on offer so you’ll need to decide which is the right fit for your organisation and how best you can react when you need to manage your demand levels. It’s easier if you have Intelligent Building Controls and back-up generation or storage to support your strategy.

The post 5 ways to proactively manage your non-commodity costs appeared first on EIC.

EDF Energy announced earlier this year it would close its Cottam coal plant by 30 September 2019. SSE is to close its last three coal units at Fiddlers Ferry after the winter season in March 2020, with one unit at the plant already closed. German utility giant RWE was the latest to announce a closure, with the Aberthaw B plant in Wales also closing in March 2020 after 50 years of generation.

The closures will see the UK’s remaining coal plant capacity drop by nearly 50% in less than a year, falling from 11GW to under 6GW. Back in January 2016, ten coal plants provided a capacity of 18GW and three years before that the UK electricity network had over 25GW of capacity from coal-fired plants.

The coal industry has been heavily impacted by various economic and legislative pressure over the last 5-10 years. Enhanced and ambitious Government targets for renewable energy and carbon emission reduction has seen coal plants come under intense scrutiny. Government legislation will remove all coal from the fuel mix by 2025. The intention is to replace coal generation with renewable capacity, cleaner CCGT gas-fired and new nuclear power plant. However, as we predicted at the time, the rate of coal plant closures has accelerated, with expectations that just one coal plant – Ratcliffe – will still be operational by the 2025 deadline.

Impact of EU regulations

The Industrial Emissions Directive (IED) came into force in January 2011. This set out a range of criteria related to carbon emissions which coal plant were required to opt in to by the end of 2016. The Ratcliffe coal plant is already compliant with the EU’s Large Combustion Plant Directive (LCPD), which the IED is designed to replace. It intends to adhere to the new IED laws and has already undergone upgrades to its systems to reduce carbon emissions.

Carbon Price Floor (CPF)

The Carbon Price Floor (CPF) was introduced in 2013 as a means to reduce greenhouse gas emissions from electricity generation. Acting as a minimum price for carbon emissions, the CPF acts as a top-up tax on the EU emissions trading scheme. It was originally £16/per tonne emitted and is now frozen at £18/tonne until 2020. It runs alongside the EU emissions trading scheme, where generators purchase permits to emit greenhouse gases.

The CPF’s introduction provided a strong disincentive to high carbon electricity generation, most notably coal-fired power plant.

However, the ongoing use of fossil-fuels in the generation mix meant that it also increased the price of wholesale power, as the cost for generation began to include the value of the CPF.

Coal plant closures

Faced with rising carbon costs, and thin profit lines on top of the substantial emissions regulations, coal plant have reassessed their continued operation. Closures at Lynemouth, Longannet, Ferrybridge and Rugeley all took place by Summer 2016. Uskmouth and Eggborough followed in 2017 and 2018. After the recent announcements, just four UK coal plants will remain open beyond March 2020. The aforementioned Ratcliffe power station, West Burton, two units at the Drax power station and the small-scale Northern Irish plant at Kilroot. Given a one-year reprieve from a planned closure in May 2018, the Kilroot plant has since been sold to new operators and its future is uncertain. However, the power station will not be subject to the Westminster’s 2025 shutdown, as Northern Ireland operates its own energy policy. The remaining coal units at West Burton are only contracted until September 2021 and the future beyond that date is unclear. Drax has already converted four of its six coal units to biomass and the company has confirmed plans to replace the remaining two coal units with gas turbines ahead of the 2025 deadline.

Coal’s power struggle with gas

The resultant loss of available coal-fired capacity has led to a switch to gas-fired plant for baseload generation. Increased renewable capacity and a stronger use of imports from overseas have also greatly reduced the use of coal-fired generation in the fuel mix.

Over the last five years coal-fired generation has gone from leading the UK electricity mix to record stretches of electricity generation without any coal use whatsoever. In Winter 2017/18 coal burn averaged just 2GW, with generation from wind farms over 6GW a day over the same period. By May 2019, as electricity demand fell through the summer, average coal use was just 28MW. National Grid recorded its first week of coal-free generation since the Industrial Revolution that month. A record which was persistently broken during the summer season, reaching a record stretch of 18 straight coal-free days.

There is still a place for coal in the short-term, during points of system stress. However, this will become even more limited, with longer periods of entirely coal-free generation expected. There is currently no push to invest in abated coal-fired plant instead through Carbon Capture and Storage.

With the UK being the first country to commit to net zero carbon emissions by 2050 the focus for long-term electricity generation will be on low carbon and renewable sources. With the removal of coal likely ahead of the 2025 deadline, new build power stations, providing baseload generation will need to be almost entirely gas-fired. In nuclear, only Hinkley Point C power station is under construction, as three other new nuclear plants have been recently shelved. This will likely result in increased gas demand in the UK, and more so globally, as major European and Asian economies switch consumers away from coal to less carbon intensive fuels.

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The new level will see the default price cap fall from £1,254 to £1,179 (over a 6% drop). The pre-payment meter cap will fall from £1,242 to £1,217 per year (around a 2% drop).

Ofgem expect energy bills to fall this winter for around 15 million households. Exact savings for each household will depend on; the cost of their current deal, how much energy they use and whether they use both gas and electricity.

The justification for this decrease has come from a significant fall in wholesale prices between February and June 2019. Healthy market fundamentals, record gas storage stocks, and periods of low demand across the last winter all contributed to this.

Households are able to cut their bills further by comparing tariffs to find the cheapest that will suit them.

The price cap moving forwards

Ofgem plans to update the level of the cap in April and October every year in order to account for the latest costs of supplying electricity and gas.

The price cap is a temporary measure, to be in place until 2023 at the latest. This allows Ofgem time to implement further reforms to make the energy market more competitive, enabling it to work more effectively for all consumers.

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The energy sector in the UK had already seen significant changes with the Energy Act 2011 and various proposals for reform of the electricity market. The possible impact of Brexit on the UK and global economy could be far-reaching. However, the direct impact on the energy industry is likely to be more muted. Oil and gas markets are traded on an international level and the EU has little influence over the make-up of a member state’s energy mix. There will be no danger of blackouts or supply shortages and in the short-term you may see little day-to-day change. However, the longer-term outlook for post-Brexit energy may be altered, with one of the major issues being the UK’s relationship with, or role within, the EU’s Internal Energy Market (IEM).

The EU Internal Energy Market (IEM) – will Britain stay a part?

The IEM is a borderless network of gas and electricity transfers between EU member states. Common market rules and cross-border infrastructure allow for energy to be transferred between countries tariff-free.

Post-Brexit, Britain is likely to have less influence over EU energy regulation but will be able to adopt a different, potentially lighter, framework for its energy polices. The extent to which the UK still adheres or follows the EU energy regulation will be dependent on any ‘deal’ reached before the deadline.

Continued access to the IEM is a key priority for the UK Government in its Brexit negotiations. This would allow the country to continue to take advantage of various benefits associated with the IEM including increased security of supply, market coupling, cross-border balancing and capacity market integration.

Having recognised the benefits of the IEM the Government is seeking to retain as free as possible access to internal market and to maintain a strong influence on energy within the EU.

Plans to increase interconnectivity with the Continent are continuing and enhancing with many new interconnector links currently in development (see below). Irrespective of negotiations, this will require close co-operation with the EU Internal Energy Market going forward.

However, there are some inconsistencies in regards to UK plans encompassing full membership of the IEM. Continued participation is likely to involve the UK adopting various European legislation, which may not tally fully with UK judicial ambitions unless the UK remains part of the institutions which handle EU energy regulation (ACER, ENTSO-E and ENTSO-G for example).

Will Brexit impact on connectivity between the UK and Europe – what about interconnectors?

The ongoing negotiations regarding the UK’s 2019 exit from the E U, are having no real impact on developments, with four new interconnector links now under construction.

The Government wants to see all the current planned projects through to operation, the majority of which will not be completed until after the UK has left the EU in 2019. Former Business Secretary Greg Clark had indicated he was keen for the UK to remain in the EU’s I E M, although the final result will depend on the outcome of Brexit negotiations.

Regardless of the outcome, the UK’s energy networks’ connections to the EU will remain in place. The Government recently posted guidance on the trading of gas and electricity with the EU if there is no Brexit deal. The publication highlights that there are only small changes expected to interconnector operations. Interconnector operators have been advised to engage with relevant EU national regulators to confirm any requirements for the reassessment of their access rules.

The main area that may see impact is for proposed interconnectors, which are still in stages of project development, without final financial decisions. Uncertainty caused by Brexit, surrounding commercial, regulatory and operational impacts, will likely see planning stages re-visited to adjust for these challenges.

The UK may lose access to the Connecting Europe Facility (CEF) going forward. The CEF help to provide funding for interconnectors across Europe through targeted infrastructure investment. The Government have confirmed that any commitments that have already been made by the CEF regarding interconnectors into the UK will be safe following the UK’s withdrawal. However, it is not clear whether companies in the UK will be able to seek investments for new projects.

How will Brexit impact on the carbon market? Will the UK be part of the EU ETS?

The Government has published plans for the implementation of a UK carbon tax in the case of a ‘no-deal’ Brexit. Under a ‘no deal’ scenario, the UK would be excluded from participating in the EU ETS. This would mean current participants in the EU ETS who are UK operators of installations will no longer take part in the system.

In this instance, the UK government will initially meet its existing carbon pricing commitments through the tax system. A carbon price would be applied across the UK, with the inclusion of Northern Ireland, starting at £16/tCO2, less than the current EU ETS price, maintaining the level of carbon pricing across the UK economy post-Brexit.

The tax would be applied to the industrial installations and power plants currently participating in the EU ETS from 4 November 2019. The aviation sector would be exempt from this tax.

Will EU state aid rules still apply to the UK?

Unless the UK remains part of the European Economic Area (EEA), then the EU state aid rules would no longer apply. The Government has said it will transfer existing EU state aid law into domestic law after Brexit. The Competition and Markets Authority will take over responsibility of state aid enforcement. Going forward UK rules may diverge from the EU but the extent of this will be limited by the terms of a future UK-EU trade deal. In the immediate aftermath of Brexit, no significant change to state aid rules are expected.

How will Brexit affect the nuclear sector?

The UK indicated its intention to withdraw from the European Atomic Energy Community (Euratom) and the associated treaty (the Euratom Treaty) on 29 March 2017 as part of the Article 50 withdrawal process.

A report from the House of Lord’s energy sub-committee in January 2018 highlighted the potential for this withdrawal to impact UK nuclear operations such as fuel supply, waste management, and research.

However, the Government has made clear withdrawal from Euratom will not affect nuclear security and safety requirements. A Nuclear Safeguards Bill was introduced to Parliament in October 2017, highlighting how this will be achieved by amending the Energy Act 2013.

The Government will also continue to fund nuclear research in the UK, through programs like the Joint European Torus, Europe’s largest nuclear fusion device. Going forward, the UK will negotiate nuclear cooperation terms with other Euratom and non-Euratom members.

Will Brexit affect the UK’s climate change targets?

The UK passed law in June to reach Net Zero carbon emissions by 2050. The country’s climate change targets will remain unchanged, regardless of whether a Brexit deal is reached. However, there are expectations that potential economic impact from a no-deal Brexit may act as a significant hindrance to decarbonisation efforts.

Additionally, there are several international issues in this area which will need to be settled. The UK’s emissions reduction target forms part of the EU target under the Paris Agreement and this will need to be withdrawn. The UK would also need to submit its own Nationally Determined Contribution under the United Nations Framework Convention on Climate Change (UNFCCC) processes. It is yet to be determined whether the UK will continue to participate in the EU ETS post-Brexit but plans under a no-deal scenario were outlined in the October 2018 budget.

The House of Commons Business, Energy and Industrial Strategy Committee has strongly recommended remaining in the EU ETS at least until the end of Phase III in 2020. The UK’s 5th carbon budget adopted in 2016 assumes continued participation in the EU ETS, and will need to be altered if the UK leaves the EU ETS.

What about renewable energy?

After Brexit, the UK will no longer be obligated by renewable energy targets as part of the EU Renewable Energy Directive. Additional freedom from state aid restrictions has the potential to allow the Government to shape renewable energy support schemes.

The development of large scale projects may be impacted by the availability of funding from EU institutions such as the European Investment Bank. However, renewable and low carbon energy will remain a focal point of UK energy policy post-Brexit, with national and international decarbonisation obligations unaffected by their relationship with the EU.

As part of the European Union (Withdrawal) Act 2019 EU legislation will be initially transposed into UK law from 31 October 2019. For some elements of the EU law, the UK will need to reach an agreement with the EU in order to maintain the status quo.

Will coal plants stay open?

Coal-fired power plants in the UK are required to adhere to the EU Industrial Emissions Directive (IED) which places conditions on such plants in order to control and reduce the emissions and waste generated by these power plant. Strict emissions limits often require substantial investment in technology to reduce pollution. Several plant determined this was not cost effective, and will close down. All but one coal plant has chosen not to adhere to the new regulations and will close by 2023. The Cottam plant announced it will shut down at the end of the summer, while Fiddlers Ferry will close its remaining units in March 2020. Despite Brexit, these unabated coal plant will close. The Government has confirmed its policy to remove coal from the fuel mix entirely by 2025.

The Medium Combustion Plants Directive 2015 (MCP) operates in a similar manner, limiting the emissions of harmful pollutants. The UK has adopted both the IED and the MCP into its European Union (Withdrawal) Act, meaning that in the short-term these regimes will continue beyond October 2019. In the long term, the UK and EU will need to agree on common standards following Brexit.

What about EU investment in energy projects?

Several EU initiatives promote investment in energy infrastructure which encompasses funding towards UK projects. The European Investment Bank (EIB) for example has invested over €13bn into UK energy projects since 2010.

The draft EU Withdrawal Treaty anticipates this funding will continue, at least for projects approved by the EIB for investment before 29 March 2019.

After withdrawal from the EU, the UK will not be eligible for specific financial operations from the EIB which are reserved for EU member states. New projects may be supported by the EU depending on the nature and whether it aligns with the EU’s own energy policy. Cross-border projects, such as interconnectors and pipelines, may be available to non-member states.

The UK Treasury has sought to boost funding certainty and has vowed to underwrite all funding obtained via a direct bid to the European Commission and has also confirmed Horizon 2020 projects will still be funded.

What about the gas market, will supplies be affected?

The UK already operates a diverse import infrastructure, consisting of interconnectors and LNG terminals to allow for the import of gas, mitigating against supply risks. Operations and gas flows are expected to continue as normal, irrespective of any Brexit.

A more significant impact is likely to come from the expiry of long term supply contracts and restrictions which allow for selling capacity on a long term basis. The tariff network coderestricts the price at which interconnectors can sell their capacity. With Brexit it is unclear whether interconnectors will continue to be bound by these restrictions.

Other benefits like the Early Warning Mechanism and the Gas Advisory Council may be lost unless the UK can negotiate to retain its role in these.

For Brexit to have a significant impact on gas prices (barring any substantial currency moves) then the withdrawal from the EU would need to lead to export tariffs on EU gas flowing to the UK.

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The heightened risk of leaving the Union without a withdrawal agreement has had a negative influence on the value of the pound. Sterling has fallen more than 2% against the Euro and 3% against the Dollar in the first week of the new PM’s premiership. The pound’s value against the Dollar is the lowest in nearly two and a half years, approaching the lows reached after Article 50 was triggered in March 2017.

Increased Costs

The weakness in the value of the pound will increase costs for consumers. British imports of energy from the Continent will require a price premium which covers the wholesale and shipping costs in delivery of supply. Weakness in the pound will make these imports even more expensive when the purchase price is converted from Euros. This would be a particular issue during periods of high demand, extreme weather or supply disruptions.

Impact on Supply

In previous blogs, we have explained how Brexit is very unlikely to mean the lights go out. The UK continues to strengthen Interconnector links with Continental Europe with the capacity for power links expected to double to over 8GW by 2022.

Britain is seeking to retain as free as possible access to the EU Internal Energy Market, post Brexit. Gas and power will still be able to flow between the EU and the UK but there is the potential for legislative issues, and trading could become less efficient while long-term security of supply is less clear.

It is a similar situation in the gas market, although the UK is much more reliant on imports, with more than half of the country’s natural gas being imported from countries in the European Economic Area – the vast majority from Norway. The UK can also import supplies of liquefied natural gas (LNG) shipped on tankers and pipeline flows from Belgium and the Netherlands.

Brexit is not expected to impact on the availability of this gas, even under no deal. However, less efficient trading, the possibility of new regulations, and heightened currency variations would all likely increase costs for consumers.

With the UK unable to meet demand with its own indigenous supply, the country is expected to become increasingly reliant on energy imports from foreign sellers, making these issues more prevalent in the day-to-day trading of energy.

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LONG-TERM FORECAST REPORT

Our team of specialists work hard identifying trends, examining historical figures and forecasting for the future. Their expertise has enabled us to produce the Long-Term Forecast Report. A valuable tool which illustrates the annual projected increases to your energy bills and calculates your energy spend  allowing you to confidently forward budget and avoid any nasty surprises.

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Balance of Summer gas prices continue to move lower. The September gas contract has moved to new lows in anticipation of low demand for the remainder of the summer. August gas prices fell 3% across the week but are finding support from expectations of heavy maintenance, which will reduce North Sea production next month. Weakness at the front of the curve reflected healthy supplies and low energy demand levels.

The UK experienced its hottest ever July day, but the extreme heat made little extra impact on gas demand. Overall gas consumption remained at its summer lows with weak domestic consumption and excess gas being injected into already very healthy gas storage sites.

UK gas storage stocks rose 15% last week, while total European gas reserves are fuller than ever before. This will reduce injection demand for the rest of the summer and limit the ability of storage to absorb excess production. This would risk further oversupply, pushing prices to lows that will encourage producers to reduce output, as the demand will not be there. Winter 19 prices followed the summer market lower but the rest of the curve saw little change.

Contracts from Summer 20 onwards spent the last week stabilising in the middle of their July range. The strong gains seen in the first half of July have been partly reversed after costs fell heavily early last week. Prices retreated after reaching levels that would have attracted spot LNG cargoes to Europe, an additional supply source that is not required. Any further losses on the curve are being capped by the continued strength in the carbon market. Carbon costs are holding around €29/tCO2e, close to all-time highs.

Power

Power prices moved lower last week, in line with the weaker gas contracts. However, price movement was more gradual. Seasonal contracts remain above their early July lows, following the strong rally seen in the first half of the month. While prices have dropped back from their mid-month highs, the market remains elevated, supported by the continued strength in the carbon market and higher coal prices. The cost of carbon allowances remains close to record highs at €30/tCO2e, having risen nearly €25 over the last two years.

Peak electricity demand rose marginally last week, supported by low wind and demand for cooling as the UK experienced its hottest ever July day. However, demand levels only peaked around 34GW, within the summer range, heavily limited by the UK’s lack of air-conditioning infrastructure. Peak consumption is forecast to drop to new lows of 32GW this week. Gas dominates the fuel mix but the impact is muted by the low summer demand levels.

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The new requirements

Any generation capacity that started commercial production from 4 July 2019 that emits more than 550g of CO2 emissions per kWh will not be eligible to receive payments or commitments for future payments under a capacity mechanism.

In addition, from 1 July 2025, generation capacity will be ineligible for payments and commitments for future payments under capacity mechanisms if it;

• began commercial production before 4 July 2019 and emits;
• more than 550g of CO2 emissions per kWh and
• more than 350kg CO2 of fossil fuel origin on average per year per installed kWe.

Member States of the EU will be required to adapt their capacity mechanisms to comply with the new rules by 31 December 2019.

What will be affected?

The emissions limits are expected to affect coal, diesel and potentially older inefficient gas generation. The changes will also prevent existing diesel and other generating components that do not meet emissions limits from being utilised as part of a DSR (Demand Side Response) CMU (Capacity Market Unit).

The Government will be consulting on the following points:

• Whether emissions limits for existing generation should take effect on 1 July 2025, or 1 October 2024.
• What length of agreements should be awarded in the upcoming T-3 and T-4 auctions to refurbishing fossil fuel generation that will not meet the emissions limits.
• How best to deal with false or inaccurate Fossil Fuel Emissions Declarations and the recovery of capacity payments in such cases.

The consultation will run from 22 July 2019 until 6 September 2019.

Ongoing Capacity Market issues

The Capacity Market continues to be under suspension, following the ruling from the European Court of Justice in November 2018. The investigation by the European Commission is expected to conclude by the end of the year. Until a final decision is reached, National Grid are running the scheme as normal, short of making payments, to ensure that capacity providers may be eligible for deferred payments after the standstill period.

In the short-term the Capacity Market charge will still be levied on customer’s bills, currently accounting for 0.3p/kWh, approximately 2.5% of a bill. This means that consumers will likely see little immediate change.

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The National Grid ESO (Electricity System Operator) has published its yearly Future Energy Scenarios (FES) report detailing four separate pathways that cover the future of energy to 2050 and beyond.

The ESO has taken onboard changes in policy, combined with technological progress and market forces, to create a range of credible scenarios. The scenarios have been modelled to reflect varying levels of decentralisation and the speed of decarbonisation.

The Pathways

Community Renewables (CE) – In this scenario there is a large focus on local energy schemes, boosting individual consumer engagement. Improved energy efficiency is a priority. Strong policy support promotes innovation and the transition towards renewables.

Consumer Evolution (CR) – This scenario sees a shift towards local generation and increased consumer engagement, like Community Renewables. However, a lack of strong policy direction means that progress is slow.

Two Degrees (TD) – Large-scale solutions are developed and consumers are provided with alternative heat and transport options. Priorities include increasing renewable capacity, improving energy efficiency and accelerating new technologies.

Steady Progression (SP) – This scenario evaluates the pace of the low-carbon transition at a rate comparable to today, slowing towards 2050.

Work on the FES 2019 document predates the UK government’s target for Net Zero emissions by 2050. Therefore, the scenarios follow the original Climate Change Act 2008 target of an 80% reduction in greenhouse emissions by 2050, compared to 1990 levels.

Of the scenarios, Community Renewables and Two Degrees meet the 80% target with common themes of strong policy support and high consumer engagement. One of the main drivers in reducing the UK’s carbon emissions to date has been environmental legislation.

Is Net Zero likely?

The ESO included a Net Zero spotlight in the FES 2019 publication to reflect the recent Net Zero publication by the Committee on Climate Change (CCC).

Analysis in the FES 2019 report aligns with the Net Zero publication by the CCC. This states that reaching Net Zero carbon emissions by 2050 is achievable, but only through immediate action across all key technology and policy areas.

In this scenario, the ESO highlight that electrification of the industrial and commercial sectors is vital in reducing emissions. Carbon capture, usage and storage (CCUS) technologies also have an essential role to play.

At the 2019 Future Energy Scenarios Conference the new target was acknowledged and will likely be taken into account for the pathways modelling in FES 2020.

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Andrea Leadsom has been given the role of Business Secretary, replacing Greg Clark and will now be responsible for the UK’s decarbonisation strategy. Leadsom has previously had the roles of both the Energy Minister and Environment Secretary.

In the early stages of the leadership election for the Conservative Party she said that if she became Prime Minister she would declare a “climate emergency”. She also pledged to set up a Cabinet sub-committee tasked with overseeing net zero plans for 2050.

Environment Secretary

Theresa Villiers will be filling the role of Environment Secretary and has shown support to climate action, endorsing certain environmental policies and low-carbon initiatives.

Villiers is replacing Michael Gove who was responsible for leading the delivery of Defra’s (Department for Environment, Food and Rural Affairs) 25-Year Environment Plan. Gove has also been a key figure in the Government’s plan to eliminate avoidable plastic waste.

COP26 President

Another move saw Claire Perry give up her role as Energy and Clean Growth Minister at BEIS (Department for Business, Energy and Industrial Strategy) in order to serve as the COP26 President.

The 26th Conference of Parties (COP) will be an important event for climate action. The consensus reached at the Paris Agreement in 2015 is expected to come into full effect at the event, adding pressure to countries to improve their national climate action plans ahead of the event.

COP26 will be co-hosted by the UK, with Italy organising the pre-COP event. The event itself is expected to take place from 9-19 November 2020.

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The heats!

The competition started with two time trial races in order to seed the competitors into two categories, the plate and the cup.

The 14 strong crew of E. I at C lined up for their first preliminary race against Pitmaston Paddlers and Severn Nation Army. After a rocky start, the crew paddled hard to place second with a time of 1 minutes 13 seconds.

In the second preliminary round the crew raced against Oars of Spontex which was a mighty battle with the team losing by 0.6 of a second. The E.I at C time was a fantastic 1 minute 9 seconds – 4 seconds faster than their first race!

Seeding

Next came a tense wait to find out where the crew had seeded.  Shock and disbelief followed as the team were told they were in the top 15 and now in contention for the cup.

In the final two races, E. I at C took on more crews but despite their determination failed to better their times, finishing the course at an average of 1 minute 15 seconds.

Silverware

The Worcester Dragons rallied their members to confirm the final scoring and the presentation began. The EIC crew were thrilled to be presented with a cup and placed 15^th in the competition.

Thanks to the Worcester Dragon Boat Racing Club for hosting such a fabulous event and to all the crews competing. A special thank you for the EIC colleagues racing as E I at C, for taking part.