How smart meters can cut energy costs and help meet customer demands
New reforms proposed by government regulator Ofgem require energy suppliers to take all practical measures to roll out smart meters to their customer bases by 2020. As smart meters become integrated into the lives of consumers, there is also a greater onus being placed on their role within the business world. This is especially so within the context of the UK Government’s environmental target of reaching net zero emissions by 2050, with pressure likely to mount on the energy output and carbon footprint of businesses. While the adoption of smart meters within business has been somewhat lethargic to date, the benefits they bring in terms of energy usage management and sustainability can have a significant financial impact on an organisation.
An evolving business landscape
Driven by financial management concerns, technological advancements and an increasing awareness of their environmental impact, the business mindset itself is also beginning to shift. The arrival of smart meters is a contributing factor behind this – allowing businesses to take control of their energy usage and expenditure, rather than being controlled by their suppliers. Several energy companies are serving as industry trailblazers when it comes to adopting and rolling out this innovative tech, such as that offered by the likes of Lucid, to their business and consumer customers. Lucid’s solution, for example, comes with the richest energy insight feature set on the market – enabling end-users to benefit from features such as real-time consumption updates and forecasts, energy budget tracking, and usage by activity. At the same time, it allows energy providers to meet the demand for such insights from their customers.
Increase sustainability, reduce costs
With access to such a solution, organisations can reduce their carbon footprint by more accurately managing usage and identifying wastage. Beyond the positive sustainability impact, there are also obvious financial benefits to this and for CSOs, being able to demonstrate ways to improve energy output while also reducing cost is an ongoing challenge. For smaller business, bricks and mortar costs – including utilities – can be a substantial drain on resources when margins are tight. Similarly, for larger organisations, even if the budget is there for greater energy bills, it is easy to lose track of usage across multiple sites, from which costs can very quickly spiral.
We are also now operating within a world where people are much more environmentally conscious than five or 10 years ago, and for any business – whether B2B or B2C – this is an increasingly important factor within the purchasing decision of their potential customers. The arrival of smart meters will only increase such awareness amongst the population, with research from Lucid and PwC finding that 71% of people agree that they do as much as they can to reduce their environmental impact, while 46% are willing to pay more for products and services which will reduce their environmental impact. Naturally, energy usage may not directly impact these costs but, as awareness grows, the expectation that businesses continue to increase their green footprint will too – and that needs to be across the entirety of their operations, including day-to-day energy usage. Further still, and as mentioned previously, CSOs and energy providers alike can also expect greater governmental pressure in order to help meet the UK’s new environmental targets. Innovative new smart-metering technology can be an easy and effective first step to doing so.
Adopt to adapt
Business leaders – whether CSOs or CIOs – must seek new solutions and adopt new smart tech to align their businesses with changing customer environmental expectations. Reducing your carbon footprint can be essential in retaining and attracting new customers, and smart meters can not only help to achieve this, but also deliver detailed metrics around energy usage which in turn enable a reduction in operational costs. For their part, energy companies should also act now to roll out this new technology within a climate where the risk of not adapting can lead to high business costs, loss of custom and the danger of being considered outdated.
James Hunt is the Business Development Director at UK-based energy management specialist Lucid Energy
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere