Energy Efficiency First!
Net zero, the practice of balancing emissions generated with emissions removed, is becoming a crucial goal from individual companies to a global level. Achieving net zero requires procedural and cultural changes to reduce or fully abate emissions before resorting to offsets. This article focuses on the significance of energy efficiency and its potential value in driving a net zero strategy.
The primary objective of an energy efficiency strategy is to reduce total energy requirements. Energy costs remain a significant element of a business’ cost base. Improving energy efficiency not only reduces costs but also supports the bottom line:
– profit (cost reduction or increased production with the same energy input),
– planet (emission reduction and mitigating climate change impact),
– people (enhancing working conditions and improving social impact through reduced climate impact).
Understanding specific energy-consuming equipment and processes is crucial for identifying suitable solutions. These solutions may involve modifying or replacing equipment with less carbon-intensive technologies, aligning energy consumption with high renewable generation periods, or both.
A holistic approach is necessary to assess energy and emissions reductions of each opportunity, considering whole-life costs, energy savings, maintenance savings, and additional benefits.
Onsite generation plays a crucial role in a typical net-zero strategy. Exploring energy efficiency opportunities before starting onsite generation projects will avoid costly, oversized, and complex designs. An efficiency-first approach reduces the volume of renewable energy required resulting in leaner and more considered renewable energy procurement, minimising the need for renewable energy certificates and reducing business risk. Furthermore, onsite generation will likely incorporate a storage system sized according to the calculated energy use and requirements. However, oversized storage requirements will result in avoidable expenses and further complexity.
While abatement strategies may not address all emissions, offsetting becomes necessary to achieve net zero. However, embedding efficiency philosophies throughout the net-zero project strategy will minimise the required offsets, reducing costs and future price risks. Organisations achieving net zero through their initiatives or with minimal reliance on outsourcing emissions abatement enjoy an enhanced reputation for their proactive response to climate change.
Energy efficiency reduces energy costs and creates additional value for organisations. Certifications such as NABERS and Greenstar can increase property value and rental yields. Furthermore, efficiency activities improve the quality of technology, enhancing working conditions and increasing productivity. These co-benefits are often overlooked when assessing potential investments, where energy cost savings usually dominate decision-making. However, taking a forward focus and considering broader benefits can make efficiency investments more attractive.
Reducing energy consumption also mitigates cost risks associated with offsets. Offsets are ongoing costs that may increase in the future. Focusing on projects with a lower carbon abatement cost than the cost of procuring offsets allows organisations to make financially prudent decisions aligned with their net-zero strategy.
Energy efficiency undertakings should be integrated throughout the entire net-zero strategy. Energy efficiency and an efficiency-first approach offer substantial cost savings and risk reduction. Embedding efficiency within the organisational culture supports implementation, uptake, and ownership of the net-zero strategy by all members.
Energy efficiency programs play a pivotal role in driving a net-zero strategy. By prioritising energy efficiency, businesses can unlock value through cost savings, risk reduction, enhanced property value, improved working conditions, and productivity gains.