The report, Business and the Renewables Revolution, reveals that switching to renewable power is the quickest and most cost-effective way for most organisations to cut their carbon footprint, it adds less than 1% to power bills, and it responds to increasing demand from customers, investors, and politicians.
However, while 74% of the UK’s 100 biggest companies have set carbon-cutting targets, only 38% of the FTSE 100 purchased renewable electricity in 2015, according to carbon management consultancy Carbon Clear.
Robert Groves, CEO of SmartestEnergy, said: “Smart companies should rethink their energy supply and understand the benefits that switching to renewables can bring to their business, to the economy, and to tackling the global threat of climate change.”
Confusion over buying renewable electricity has held business back, according to a report from the Aldersgate Group, which represents companies with a collective turnover of over £300 billion. It called for clear labelling of the carbon content of electricity and calculated that the measure could see low-carbon power provide nearly half of all industrial and commercial demand by 2020, up from 14.4% to 48.3%.
In response to this business demand, SmartestEnergy has developed a suite of 100% renewable products with the UK’s first energy labels clearly stating the source and carbon content of electricity.
Richard Tarboton, Energy Optimisation, Executive Director, at EY, was part of the team which produced the Aldersgate report. In the foreword to Business and the Renewables Revolution he writes: “Companies want to do the right thing but need clear solutions. Energy labelling, coupled with a greater awareness of the low cost and business benefits of renewable power, are set to take it mainstream. And the greater the demand from business the more we will see investment flow from fossil fuel generators to low-carbon renewables.”
Business benefits of switching to renewable electricity
Business and the Renewables Revolution sets out significant business benefits which give companies scope to more than recoup the minimal extra cost of buying renewable electricity.
Cuts carbon footprint quickly and cost-effectively. Thanks to a change in guidelines, companies can now count the renewable electricity they purchase against their carbon targets and make major reductions in the emissions they report.
Builds investor confidence and supports company valuations. Buying renewable demonstrates that an organisation is aligned with the drive towards a low-carbon economy. A £352 billion coalition of investors, including Aviva, one of the UK’s largest insurers, is specifically calling on businesses to commit to 100% renewable electricity.
Helps win customers. A survey of 1,000 UK consumers found that almost four out of five people (77%) were more likely to buy from a consumer brand with a positive approach to sustainability and two thirds would recommend a brand because it either invested in its own renewable energy projects or bought most of its energy from renewable sources.
Supports employee engagement on money saving energy efficiency programmes. Many organisations can save up to 10% on energy costs by investing 1-2% of energy spend on an effective employee engagement campaign, according to the Carbon Trust. Buying renewable electricity demonstrates corporate commitment and can form the centrepiece of an internal campaign.
Business can make a big impact by switching to renewable power
Business uses more than 56% of all power generated in the UK so it has a major role to play in meeting national climate change commitments. The government aims to generate 30% of electricity from renewables by 2020, up from 23.5% today , but PwC has warned that to meet binding carbon targets the UK may need to source up to half its electricity from renewables by 2020.
In the UK, SmartestEnergy customers purchasing renewable energy already account for 2.8% of all industrial and commercial electricity demand. The 4.2 terawatt hours of clean power they purchased in 2015 avoided 2.24 million tonnes of carbon dioxide emissions, equivalent to taking nearly one and a half million cars off the road.
Climate change is the biggest threat to the global economy, according to the latest Global Risks report, a survey of nearly 750 experts conducted by the World Economic Forum. Private sector electricity consumption is responsible for 15% of the world’s carbon emissions, and in the wake of the Paris Climate Summit business is under pressure as never before to support the drive to a low-carbon economy.
UN Secretary General Ban Ki-moon has called on global business leaders to double investment in wind and solar energy to $600 billion a year by 2020, telling them to act decisively to hasten the transition to a low-carbon economy.
More than 400 investors with $24 trillion in assets have pledged to work with companies they invest in to minimise climate risks and to seek out opportunities to invest in renewable energy.
Apple, Nike and BMW are among dozens of global brands from a wide range of sectors who have pledged to power all their activities from renewables, in a global trend which is gathering momentum.
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
How Much Energy Does Bitcoin Use, Really?
Many headlines have capitalized on the rapid rise of Bitcoin’s value. However, there’s a darker side of things that may entirely escape people’s awareness — the vast energy usage associated with Bitcoin mining. The practice involves adding information about transactions to a publicly accessible record called the blockchain.
Bitcoin miners increase the amounts of the cryptocurrency they own by being involved in mining. That means there is a built-in incentive to start mining and keep doing it. The energy consumption associated with mining may not be as visible as it is in traditional types of mining because everything happens in the digital realm — however, it’s exceptionally high, which is a cause of concern to many individuals in the know.
The Rise in Value Brings About Higher Energy Consumption
It’s not hard to find impressive headlines and news stories about how the value of Bitcoin has soared over the last few months. Many people even suspect they’ll soon witness the inevitable burst of a “Bitcoin bubble.” Miners are taking advantage of the current boom, though, which involves depending on power-sapping computers and related equipment.
In the early days of Bitcoin, it was possible to mine on basic home computer setups. Now, the most dedicated miners invest in the best computers around. In some cases, that means the machines they use are quite energy efficient, which is a good thing. However, the purchase of equipment that uses electricity well isn’t enough to make a significant dent in the overall Bitcoin energy usage.
The Approximate Energy Usage Statistics Vary
When you start doing in-depth research about just how much energy consumption Bitcoin demands, be prepared to come across many different figures. Although people are doing diligent research, they still can’t reach an agreement. For example, according to statistics from the Bitcoin Energy Consumption Index, the annual energy usage is just under 32 terawatt hours.
That’s the estimate for per-year energy use of Serbia and more than 150 other countries. However, analysts find it impossible to reach a unified conclusion about the per-transaction energy consumption for Bitcoins.
Figures from Digiconomist estimate one Bitcoin transaction takes 255 kilowatt-hours of power — or enough to power an American household for more than eight days. Marc Bevand, another analyst, disagrees with that figure, though his remarks on the matter are not as specific. He discusses how many of the highly publicized statistics fail to account for the technological innovations that occur as equipment improves.
He gives the example of an S9, which is a standard piece of Bitcoin equipment, claiming 16% of the S9’s revenues went towards electricity costs. If that figure is more accurate, it would mean each Bitcoin transaction uses enough power to keep an American residence going for just under four days.
Bitcoin Miners May Be Able to Branch Out From Cryptocurrency
Some Bitcoin miners are attracted to their trade for more reasons than just the lucrative and ballooning prices of the coins. People from a wide variety of industries, from banking to insurance, are looking at uses for blockchain technology. In the insurance sector, fraud costs $40 billion per year, but the verification method that miners understand and work with dramatically reduces fraud and makes blockchain appealing to insurance professionals.
Also, banks are increasingly researching Blockchain as a supplement to their current methods. As the prominence in the market goes up, the allure of being a Bitcoin miner does, too.
Also, going back to Bitcoin specifically, as the value of each coin goes up, people become more motivated than ever to invest in better technologies that help them remain profitable for as long as possible. When all these factors combine, it’s not hard to understand why energy consumption rises.
Do Banks Use More Energy Than Bitcoins?
Some analysts argue that even if the energy demanded by Bitcoins is exceptionally high, it’s still not at the level of energy used by banks. To keep things in perspective, it’s important to realize that the banking industry keeps its total energy usage figures under wraps, leaving people to do lots of speculating.
One analyst determined there are approximately 30,000 banks in the world, and each one has ATM networks, offices and other components that require electricity. When adding all the relevant factors together, the final figure this individual came up with is that banks use about 100 terawatts of power per year, less than the earlier-cited figure related to Bitcoins.
However, people have given opinions that the amount is too conservative. It does not include the energy used by bank employees, such as when employees drive to their offices or fly to meet clients. It bears mentioning, though, that the Bitcoin figures mentioned in this piece probably don’t either.
There are countless statistics about Bitcoin energy usage, and most of them are not promising. But instead of reading a few of them and immediately feeling shocked, it’s important for people to take a broad look at the findings and reach their own intelligent conclusions based on the collective research.
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