What are the advantages of renewable energy?
10th June 2019
While the environmental benefits of renewable energy are clear to most businesses and consumers, the commercial advantages of being more sustainable and energy efficient may be less obvious. This post summarises recent sustainability successes and describes how switching to renewable power could benefit your business.
Read more on the advantages of renewable energy below:
The Climate Change Act 2008 enshrines the UK’s commitment to reduce carbon emissions by 80% (compared to 1990 levels) before 2050 – and the nation’s making progress towards this low-carbon future.
As of June 3rd 2019, Britain’s not used coal to generate electricity for over 400 hours (more than 16 days) – the longest period of its kind since the 1880s. The National Grid Electricity System Operator (ESO) also announced that May broke the record for solar power.
Even so, the unpredictability of the British weather – and the inability, so far, of battery storage to operate on a national scale – limits the usefulness of solar and wind. With no guarantee of these resources always being available to produce enough electricity to match demand, ESO needs 100% reliable sources of renewable power to bridge the gaps. Biomass and hydro-power, for example, will be vital in helping ESO match supply with demand and keep the system in balance.
More about biomass and hydro-power
Part of Drax Group, Haven Power sources most of its electricity from Drax Power Station – the biggest renewable generator in the UK (as well as Europe’s largest decarbonisation project). In recent years, Drax has upgraded half of its generation units to use compressed wood pellets (biomass) instead of coal. It’s also started Europe’s first bioenergy carbon capture use and storage (BECCUS) project – if successful and scalable, this could make Drax the world’s first carbon negative power station.
Drax Group also owns and runs Cruachan Power Station, one of only four pumped hydro storage stations in the UK. It has a capacity of 440 MW and, having achieved full load in just 30 seconds, can deliver balancing and ancillary services to the system. The Drax portfolio also includes the Lanark and Galloway run-of-river hydro schemes.
The business benefits of renewable energy
It’s possible to summarise the commercial advantages of a shift to renewable energy as follows:
- cost savings;
- risk management and resilience;
- corporate social responsibility and positive public relations;
- improved employee engagement.
According to a report by Bain & Company, energy accounts for about 5% of costs for an average manufacturing company. Such an enterprise can follow an energy-efficiency programme and save between 10% and 30% of these costs within three years.
Communications services company BT saved £2,147 million in 2014/15 through adopting energy reduction measures at its data centres. And since 2002, software solutions company Adobe has completed more than 180 energy efficiency projects – reducing electricity usage by 50% and achieving savings in natural gas plus domestic and irrigation water usage too.
The 2016 CSR Report from retail group Boots claims “LED lighting replacements in stores in the UK… accounted for a consumption reduction of around 7.9 million kilowatt hours, enough to power over 1,700 UK households for a year.” The report also states that, as of the end of fiscal 2016, it’s “on track to reduce CO2 emissions by 30% between 2005 and 2020, on a comparable basis.”
Risk management and resilience
Increasingly, companies that use a significant amount of electricity are turning to self-generation. Following an initial investment (in solar panels, for example), organisations can start producing their own renewable power and reduce their reliance on electricity from the Grid.
This brings several advantages, including the potential for the company to use less centrally-generated Grid power at those times when it’s most expensive. What’s more, when power from the Grid isn’t available for some reason, companies with access to self-generated electricity can keep running and not suffer from downtime.
Drinks manufacturer Carlsberg has a goal to source 100% renewable electricity at its breweries by 2022 – and in 2016, 45% of its power came from renewable sources. One initiative involved the installation of 8,000 solar panels at a site in China, which meet up to 20% of that brewery’s needs. The company also extracts biogas from the waste water produced at 18 of its breweries.
As a member of the RE100 corporate leadership initiative, Carlsberg's Director of Sustainability – Simon Boas Hoffmeyer – said the company’s creating the stable and sustainable market conditions it wants to see. He continued: “By taking a leadership position on renewable energy… [we’re helping] to create the right investment environment for suppliers and sub-suppliers of clean tech, and encouraging them to become independent.”
Corporate social responsibility and positive public relations
Bain & Company asserts that reducing energy consumption and using renewable energy sources demonstrate good corporate citizenship. This corporate social responsibility (CSR) agenda is part of Unilever’s ‘Sustainable Living Plan’, which aims to “halve the environmental footprint of the making and use of our products” by 2030. It’s also worth noting that the company stated that its ‘Sustainable Living’ brands accounted for 60% of its growth in 2016.
Unilever’s Plan targets its manufacturing activities around the world by having policies in place to source all energy renewably – and eliminate coal from its energy mix. Achieving these aims will propel the company towards its self-imposed 2020 deadline for ensuring its “carbon dioxide emissions from energy from our factories will be at, or below, 2008 levels.”
For any business, a focus on setting and achieving CSR goals has the potential for generating a stronger platform for positive public relations (PR) and improved perceptions. In turn, this can help make the company more attractive to customers and prospects as well as investors, suppliers and other interested parties.
A good example of powerful PR comes from Formula E, the organisation responsible for the world’s first electric single-seater racing car championship. All competing cars use 100% renewable power, so the success of the events – in terms of participation, spectators, sponsorship and media coverage – is changing the image of electric vehicles. What’s more, the championship proves the flexibility of renewable technologies and helps perpetuate the concept of a clean energy future.
Improved employee engagement
Research from Harvard Business Review and EY shows that companies with a strong sense of purpose can transform and innovate better while also improving employee satisfaction.
“Purpose” can manifest itself in several ways, including a focus upon sustainability. EY’s John Rudaizky says it’s about “what you do and not what you say. [It’s] a business transformation idea rather than a loose wrap-around at a brand level”.
Unilever’s former CEO, Paul Polman, goes further: “There’s no doubt that the Unilever Sustainable Living Plan is making us more competitive by helping us to build our brands and spur innovation, strengthen our supply chain… reduce our risks [and] lower our costs.”
The report from Bain & Company states that efficiency programs boost employee morale and help make companies more attractive places to work. This is certainly the experience at GE, where energy experts and staff identify and recommend efficiency initiatives. The employees say that participating increases their personal commitment to GE, and the business reports savings of $150 million since the project began.
For businesses, renewable energy has the potential to generate savings as well as commercial opportunities. It also helps companies to meet their CSR commitments, to appeal to customers and stakeholders focused on sustainability, and to make a positive contribution to the environment.
With so many benefits, it has to be time to think about switching – doesn’t it?
If your business is considering a move to renewable energy, Haven Power’s experts are happy to discuss your options and help you discover what’s best for your needs.Contact us
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