It is no longer simply a matter of corporate social responsibility: going green is good for business. From Ikea to Google to Starbucks, more and more companies are turning to renewable energies and focusing on better operational energy efficiency – mainly because it makes good financial sense.
The recent steep fall in renewable energy costs is one reason – the cost of generating solar energy, for instance, has fallen by about 50% in the US over the past decade. But there is also increased awareness that renewable sources are less subject to the sort of price oscillations that dog fossil fuels.
Don’t ignore the impact of national policy, either. In the UK, the government has committed to generating 30% of electricity from renewable sources by 2020. To achieve that, it has resolved to drive down renewables prices, heavily investing in energy research and innovation. The Department for Business, Energy and Industrial Strategy (BEIS) has poured about £177m into the sector, of which £1.3m will be used to fund a new offshore wind innovation hub developed by the Offshore Renewable Energy Catapult.
Under the contracts for difference scheme – for which the UK government has just earmarked up to £557m – a company that generates power through renewable sources not only sells energy to the national grid, but is also paid the difference between the price for producing electricity through low-carbon technology and the average market price for energy. This allows renewable energy plants to recoup their investments through long-term price stabilisation.
The Beatrice Offshore Wind Farm (BOWL) is one of the first UK projects to be subsidised under the scheme. The project, which has been granted a contract for difference 15-year investment and will provide energy for 450,000 homes, is the largest offshore project in the EU. It’s tipped to boost Scotland’s economy by £680m, through job and supply chain opportunities, and add £1.13bn to the UK’s GDP.
Businesses that install renewable energy technologies, such as solar panels or wind turbines, to self-generate power can sell any excess energy back to the grid and make a profit. On top of this, a newly approved scheme could provide cities and local authorities with at least £3m in funding to encourage initiatives such as installing solar panels on social housing.
In the West Midlands, businesses adopting energy-efficiency measures can also receive grants of up to £20,000, thanks to the Business Energy Efficiency Programme, partly funded by the EU.
But subsidies and grants aren’t the only way sustainable, energy-efficient practices are finding their way into UK businesses. UK retailer McColls, which has 1,366 outlets across the country and spends about 25% of its energy bill on lighting, hopes to reduce its energy bill by 11% by switching to LED lights, which are 80% more energy efficient than fluorescent or incandescent bulbs and last six times longer. The switch will reduce the retailer’s carbon footprint by 1,000 tonnes every year.
NatWest played a decisive role in both the BOWL initiative and McColls’ LED switch and has, over the past decade, been the leading UK lender in renewables; it lent more than £1.1bn to green energy projects in 2016 alone.
The bank is also an enabler of small-scale projects, helping customers raise funds for photovoltaic, onshore wind, micro hydro, biomass and anaerobic digestion initiatives. And through its Energy Audit, NatWest is working with its customers to help them understand how they could reduce their energy costs or generate their own renewable energy. The Independent Energy Savings Audit is available to customers with an energy spend more than £10k a year or with more complex energy requirements.
2017 could be a year of significant change for sustainable energy in the UK. Several subsidy programmes for sustainable energy resources – including those affecting onshore wind and solar – are not slated for renewal. With this in mind, many businesses hope to complete their projects by the year’s end – and NatWest is on hand to support companies looking to exploit this window of opportunity.
For over 25 years NatWest have supported the journey towards a greener economy by offering businesses guidance and support to help reduce their carbon footprint. To find out more click here
