During this period, it’s been very clear to those of us working in the sector that the related uncertainty has had an impact on decision making and any subsequent projects. It was with interest therefore that I read the latest Energy Institute Barometer report published this week.
Painting the Picture
Almost everyone we talk to continues to look closely at reducing their energy consumption. As is well documented, there are many factors to be taken into account when Plant Managers and FDs choose what to do. Decision making at site level, however, doesn’t necessarily suffer from a lack of local knowledge, or even from inertia.
As the report says, the wider picture of the recent political moves has led to a difficulty in drawing up strategy, negatively impacting on necessary infrastructure changes, with the end result of targets unlikely to be met.
At the more macro level, there’s very much a shared view that Brexit shouldn’t result in any changes whatsoever to policy and targets, that everything is easily transferable from EU legislation into domestic.
However, there is a degree of concern that there may be an effective ‘brain drain’ should skilled people leave. Away from strictly political concerns, there is also very much a feeling that not enough is being done to enable the 2050 targets to be met.
Although these targets are in place, uncertain policy is leading to at least a perception of higher risk in terms of investments, particularly with regards to less mature technologies. In order to deliver the flexibility required of future energy systems, support in the form of standards and incentives will be required or the feeling that the targets are too ambitious may not be wide of the mark.
The biggest challenges?
The overarching message is one of collaboration. The top three areas for consideration are Policy, Technology and Security of Supply, underpinned by Investment. Unless legislators, suppliers, innovators and funders work together, wholescale delivery is unlikely.
We recognise this at Efficient Power Solutions; the use of a single solution in isolation will not in itself enable targets to be met. This is accepted in wider circles by industry professionals, but understanding needs to be translated into language that the power brokers understand or, collectively, we may not achieve what we are capable of.
Those of us working in the sector for a length of time have seen several shifts in policy, not only linked to the continued global agreements such as Paris, but also as governments have changed and resulting changes to departments. Linked to this there is now a general feeling that what has been achieved is, in part at least, is in spite of policy rather than a result of it, with no more than 50% considering that government input has had a positive effect on reducing energy consumption.
It is perhaps therefore worth asking the question as to how much could be achieved by a truly determined legislature fully committed to tools such as ESOS. That so many opportunities were identified, with no funding and no compulsion to actually carry them out, suggests a disjointed approach at best. However, such opportunities are not lost, where it was done correctly, vast amounts of data is available and companies like ourselves are in a position to help deliver.
Is it worth the risk?
One of the biggest issues with energy reduction, is the issue of returns on investment. Will the project deliver the savings promised and how does the site fund it? Another concern is that of technology readiness. When the engineers are happy with the technology, the accountants often just check that it meets their own criteria and things progress.
However, with newer solutions, such as Storage and DSR, there is a natural desire to see delivery either elsewhere or for the provider to at least share the risk. In this case, our advice would be to check out previous projects and work very closely with the supplier.
The Future & Flexibility
There is a predicted saving of £8Bn per annum by 2030 to consumers from introducing flexibility into the supply and demand side. Security of supply runs alongside that and more organisations are exploring the opportunities afforded by on-site generation. CHP, Biomass, PV and Wind all continue to grow on a local basis. In some cases it is possible to engineer cooling into the mix.
Innovations will be driven by the rise in non-commodity costs meaning that projects previously outside investment criteria will ultimately become affordable. Eventually organisations will only be on-grid for back-up, leaving fewer consumers to pick up the tab for the support the National Infrastructure will require. Gone are the days when you had no choice.
For unbiased advice on any of these topics, contact Dave or Kevin at Efficient Power Solutions on 01909 569016.