In February 2023, the UK Government announced the formation of a new governmental department, which includes in its responsibilities “seizing the opportunities of net zero to lead the world in new green industries”. Coming at a time when energy prices are a key concern for businesses across the nation, the Department for Energy Security and Net Zero (ESNZ) has a vital role to play in the future of business energy. Steve Kenny, Vice President and General Manager, MK Electric, explores how the department might act if it wishes to support businesses.
The UK’s “net zero target” of reducing greenhouse gas emissions by 100% from 1990 levels is a highly ambitious one: one that could require a fundamental transformation of the UK’s energy system, including the way we generate, distribute, and consume energy. Achieving net zero could not only help the UK tackle man-made climate change but could also create new economic opportunities and reduce energy bills for households and businesses alike.
It’s with this in mind that the UK Government’s decision to branch out responsibility for energy and net zero policy into a separate, focused department is a welcomed one. The ESNZ could give officials the dedicated resources necessary to make meaningful steps towards the UK’s energy commitments, and better serve the business community that is currently facing significant challenges from energy costs.
This comes at a crucial time for UK businesses. April 1 saw the end of the Government’s Energy Bill Relief Scheme for businesses, which capped electricity and gas prices for businesses since it was introduced in October 2022. At the time that the scheme was introduced, UK companies were struggling with soaring energy bills that were putting their continued existence at direct risk. The relief scheme was replaced with a discount scheme that, while helping businesses to take the edge off their energy bills, led to companies incurring a net increase in energy spend each month.
As of 100 days into its existence, the ESNZ had appointed a chair, formed specialist councils, and was looking to hold a stakeholder event to shape its priorities. In likelihood, support for local renewable energy generation will be among those priorities to deliver on the need for greater energy security. However, for businesses, the reliable procurement of energy only goes so far. Enhancing support for energy efficiency by the ESNZ would also be a much needed benefit for UK companies.
Securing energy efficiency
Improving energy efficiency can be a cost-effective way for businesses to reduce their energy bills. The UK has made progress in improving energy efficiency over the past few years, but there is still a long way to go to achieve the net-zero target. The ESNZ could help by continuing to invest in energy efficiency measures for businesses, such as improving insulation, HVAC systems, and small power consumption.
According to research from the UK’s former Department of Energy and Climate Change, the average small and medium business could save up to 25% on their energy bills by implementing energy efficiency measures. However, there are still many barriers to improving energy efficiency in businesses, including a lack of awareness among business owners, and limited access to financing for energy efficiency projects.
To overcome these barriers, the new department could provide further funding and incentives for businesses to invest in energy efficiency measures, further simplify the planning process for energy-efficient buildings, and further raise awareness among business owners about the benefits of energy efficiency.
For example, the UK Government’s Industrial Energy Transformation Fund (IETF), which provides funding for businesses to improve their energy efficiency, was a good start, but it would benefit from being expanded and made more accessible to businesses of all sizes. The ESNZ has announced that there will be a third phase of the IETF, which is being finalised and is set to launch in 2024.
Improving energy efficiency not only saves money for businesses but also supports employment. A report by the Energy Efficiency Infrastructure Group found that investing £3.8 billion in energy efficiency measures could support up to 150,000 jobs by 2030.
Furthermore, improving energy efficiency can help businesses to increase their competitiveness, potentially help reduce their exposure to any energy price volatility, and conceivably assist with operational compliance with potential future energy regulations. However, much of the conversation around energy efficiency improvements looks at large-scale projects — HVAC overhauls, insulation installations, and lighting refits. There is another potential opportunity to improve energy efficiency for businesses, and it’s one that is often overlooked: controlling plug-in energy.
Small power, big impact
When we think of the traditional office space, our mind generally paints a picture that features countless computers, printers, and other plug-in devices. The energy consumed by these devices — referred to as small power — can account for a quarter of a building’s entire energy usage, with this consumption happening in plain sight.
Plug sockets in buildings traditionally fall outside the remit of the systems that businesses use to monitor, manage and control building services. This can prevent companies from being able to easily and accurately measure the amount of energy being used each day, while also limiting the opportunities for efficiency improvements in this area. Many businesses try to encourage behavioural change with things such as signage asking occupants to turn off unused sockets, yet this isn’t always a reliable solution.
It’s now possible to get a fully integrated solution that enables remote monitoring and control of plug-in sources of power consumption, giving energy and building management teams visibility into their small power usage for the first time. It’s an innovation that is a long time coming for the industry, addressing a pressing issue that much of the industry doesn’t realise the scale of.
Raising awareness of the potential hidden small power problem could conceivably be seen as being among the necessary priorities for the ESNZ, especially now that there is a viable solution to bring it under control. Tackling the issue could help identify significant saving opportunities and the potential for ongoing efficiency improvements.
The ESNZ needs to invest in energy efficiency measures, provide funding and incentives, and raise awareness among business owners. Improving energy efficiency not only saves money but can also help businesses to increase their competitiveness and potentially reduce their exposure to energy price volatility — something that is particularly important now.
