The first few months of 2017 have seen several developments in energy policy which could significantly impact business now and in the future.
Three areas worth looking at in a little more detail are the effect of climate change policies on business costs, the Government’s Energy Reduction Plan and, for landlords, the countdown to Minimum Energy Efficiency Standards.
The Committee on Climate Change recently reported on the impact of low-carbon policies on business energy bills and the potential for increased competitiveness from energy efficiency.
It found that, while low-carbon policies increase business energy prices, the impact on production costs for the majority is limited. This is thanks in part to improvements in energy efficiency but also the availability of exemptions and compensations, particularly for energy-intensive sectors. The findings act as an important call for businesses to take advantage of opportunities to improve energy efficiency which, the report says, could see potential savings of around 16 per cent on electricity consumption for the commercial sector and 10-15 per cent for energy-intensive manufacturing by 2030.
The report also highlights the potential in the UK moving to a low carbon economy. Lord Deben, Chair of the independent advisory panel, commented: “The UK’s progress to reduce emissions … offer opportunities for future growth and employment while delivering vital action to tackle climate change.”
And solutions such as on-site generation can do more than reduce costs; flexibility in generation or demand reduction can play a part in balancing the grid, potentially generating new revenues from existing assets – either by generating income or avoiding charges during peak demand periods.
Solutions providers can optimise these technologies and help sell capacity to short-term markets. For example, E.ON recently provided remote monitoring, controls and optimisation for a High Street retailer at more than 300 sites across the country, enabling them to save on peak period charges.
Emissions Reduction Plan
The Government’s long-awaited Emissions Reduction Plan – otherwise known as the Clean Growth Plan – is still to be published. Offering clarity to businesses and investors as to how the Fifth Carbon Budget (requiring a 57 per cent reduction in emissions by 2030) will be met and how decarbonisation targets will be reached, the ambitious framework has been anticipated since it was due in June 2016.
Research demonstrates significant progress has already been achieved but more improvement is needed in transport and heating in order to meet the targets. With the General Election further delaying publication, businesses have an opportunity to get ahead of the game in their efficiency plans.
Minimum Energy Efficiency Standards (MEES)
MEES regulations come into effect from April 2018 and mean commercial landlords will not be allowed to renew existing tenancies or agree new lets for properties without an Energy Performance Certificate rating of ‘E’ or above. A recent E.ON study found more than a third of landlords and property managers are concerned about the impact of the regulations so it is vital that improvements are planned in good time to meet the deadline.
Clearly there is no silver bullet for all types of building and industry sector but, expert advice from an energy partner can make your buildings work harder. This can range from lighting and ventilation improvements to complete building energy management systems and combined heat and power units.