In June, the CBI released a report that recognised the increasing role of on-site energy generation in meeting the energy needs of Britain’s businesses.
It’s widely acknowledged that energy costs are likely to come under increasing pressure from issues such as growing network and distribution costs and climate change levies.
I’ve no doubt that on-site generation, also called distributed energy, will play an important role in creating affordable energy, reducing emissions and helping with security of supply.
According to the CBI’s report, on-site generation already accounts for 14% of the UK’s energy needs, with predictions it will grow by 130% or more by 2030.
The potential benefits of on-site generation have become much clearer in recent years, partly through legislative change but also due to the financial and economic environment. In my view it can help businesses in a variety of ways;
It can provide a competitive advantage – through energy reduction but also with the potential to reduce capital and operational costs. It will reduce dependence on grid energy – this can protect against price volatility. Next it helps improve operational resilience. It can also help carbon reduction by encouraging the use of renewables and better efficiency. And finally, I believe it can offer a way to improve measurement and verification – helping convince stakeholders why they spent the money in the first place.
Benefits can get even more specific. If on-site generation is being considered as part of the development of a new site, the cost of an expensive new substation could be avoided through design and planning.
That’s great you say but what do I choose?
Well there’s a huge range of technologies out there and no ‘one-size-fits-all’ approach will work. Businesses should start the process with an open attitude to the type of technologies they could install, rather than trying to copy what others have done.
Paying for it all. Now that is an issue. Lack of funding is often the barrier to energy efficiency but there is help out there. External finance from the Green Investment Bank could help or you might want to get into a partnership with another organisation and share the costs for a share of the returns.
One of the best options in this area is an Energy Performance Contract (EPC). These are funded agreements (either by the customer or using third party funding) designed to reduce energy consumption.
What makes an EPC successful is that it aggregates technology options and gives a programme of action designed around the condition of the current estate.
I firmly believe that on-site generation and power provides a real opportunity for businesses, including energy efficiency, flexible generation and new technologies alongside energy management systems and optimisation.
Gab Barbaro is the Managing Director of British Gas Business.
This is a sponsored article.