FAQs

The first point to make is that sustainable energy supply does not always mean increased costs and in many cases results in the reduction of cost. For example, considering the prioritisation of energy demand reduction when matching energy supply with demand, there can be straightforward changes in temperature control that can save significant energy with minimal expenditure.

The installation of renewable energy generation such as wind energy or solar photovoltaics (PV) can give a payback on investment and lower cost per unit of energy supplied than fossil fuel energy generation and nuclear energy generation.

The true cost of fossil fuels and nuclear power are not included in the price paid by the consumer. For example, the price for fossil fuel energy does not cover the cost of repair or mitigation of the impacts of climate change. In addition, for years, fossil fuels have received greater subsidies globally than renewables. In the case of nuclear power, the price paid does not include the cost of full insurance against accidents or the full cost of long term management of waste over successive generations. These costs that are not included in the price are known as ‘external costs’. It may be argued that over time, with the impact of these external costs being felt by society, they will be internalised, thereby giving renewables a greater market advantage.

Renewable energy systems are typically capital intensive, but have a lower cost than fossil fuel power systems in their operation. This means that there is typically less volatility in their pricing than with fossil fuels. This greater predictability of cost can allow better business planning and a related market advantage.

With the increased drive towards Net Zero greenhouse gas emissions, backed up by Government legislation in the UK and other countries, companies are setting their own emissions targets and formulating related plans. They are then putting pressure on the supply chain to support them with this. Therefore for companies in the supply chain, avoiding sustainable energy measures can mean loss of business.

Sites vary in complexity and the time that needs to be spent on energy systems to arrive at a meaningful outcome varies accordingly. However, from the commercial perspective of the client, the investment in energy consultancy should be more than paid back by the resulting savings. If you have not had an energy assessment done already, it may be expected that over 10% energy savings should be achievable. If the value of these savings over the period of a year is greater than that cost of the consultancy to achieve them, then you may consider that the investment is worthwhile.

An energy feasibility assessment should result in options for improving the sustainability of energy use and cost savings. An analysis of the site energy data, energy systems, energy use, site characteristics and business priorities is required to arrive at the outcome of the assessment.

The work required to do this will depend on the complexity of the site and in general there is a correlation between the complexity and the size of the energy bills.

A minimum amount of time has to be spent on client communications, data gathering, site surveying, analysis and reporting. Taking all this into account a Wattcraft feasibility assessment for a single site could cost anything between £2,000 and £50,000. We generally propose that a larger assessment would be broken down into stages, with a review at each stage to ensure that subsequent stages are focused on high priority areas with the greatest opportunity for improvement.

Scope 1, Scope 2 and Scope 3 are greenhouse gas emissions categories under the greenhouse gas protocol. Scope 1 emissions are direct emissions within an organisation’s business boundaries, including those resulting from burning fossil fuel from heating and company-owned transport.

Scope 2 emissions are those relating to energy supplied to an organisation, but where the physical emissions are released outside the organisation’s boundaries, generally relating to imported electricity with a fossil fuel generation component, but also including heating and cooling supplied by district heating networks.

Scope 3 greenhouse gas emissions are indirect emissions not relating to energy supply to the organisation, including embodied emissions in goods and services, emissions from employee commuting, business travel in vehicles not owned by the company and emissions associated with the end use of the product.

There are a number of reasons as to why it makes sense to be on a journey to Net Zero greenhouse gas emissions now, rather than to delay, but the particular journey does need to be consistent with the effective operation and survival of the business.

The first key reason is that becoming Net Zero for all scopes of emissions (direct and indirect) is complex and needs planning and coordination across all areas of the business. Successful businesses generally work to a plan over a number of years and due to the significant impact of Net Zero on a business, it also requires long term planning for it to be a success.

A related reason not to delay with Net Zero is that there are typically constraints relating to building or equipment life and budgetary expenditure that will need to be taken into account when implementing emissions improvement measures. For example, if there is a planned expansion or relocation of the business facility for reasons other than Net Zero, there may be a great opportunity to introduce a step change in emissions reduction measures, rather than incurring the likely greater costs of retrofit of such measures further down the line.

A further reason not to delay is that as the Government legislated deadline for Net Zero (2050 for the UK) approaches, the demand on professional services to support Net Zero is likely to be significantly greater and there will be less options available at an affordable price to meet requirements.

Finally, there are ways in which implementing Net Zero measures can save you money and the sooner you get on with them, the better for your business. This includes potential short term cost savings through reducing energy consumption and also establishing a position on Net Zero that is consistent with your customers’ requirements, thereby increasing the chance of securing contracts.

Often small companies do not feel they have the power to change larger organisations in the supply chain that they perceive are not significantly dependent on them. However, all parts of the supply chain will ultimately have to become Net Zero to meet legislative requirements and also for their businesses to be sustained into the future, given environmental pressures and increased scarcity of resources. Change can be brought about to a large extent through effective communication of the issues. It may be that the larger organisations are more receptive to taking steps towards Net Zero than might be apparent from the outside. By sharing ideas and objectives, there is the potential for increased cooperation and overall success for all. This communication might include conveying market advantage of operating in a way that takes environmental impact into account.

Ultimately Net Zero makes business sense. If you don’t direct resource into addressing it, you will likely lose far more in the future than the expenditure now, as you will not be operating sustainably. A hundred years ago, there were not the health and safety measures that are in place now. However, if you did not attend to health and safety nowadays, you would be out of business. The situation is not currently as extreme with Net Zero or other environmental measures, but this is the direction of travel, within the context of global climate impacts currently being at the worst end of the band of predictions. Of course you have to ensure business survival and particularly for small companies, it can be difficult to justify directing resource in the short term that could be directed towards survival in the short term. However, this underlines the importance of planning and projecting into the future. In order to work out what you need to do for Net Zero today, you need to have a vision of what you want the business to look like in the future and work backwards, building an understanding of measures that will be required to realise the vision, as with any business planning. Commercial considerations need to be taken into account with every step of the journey taken towards the vision and the aim should be to optimise the pathway to Net Zero for greatest business benefit, which should include cost savings along the way.

Companies often feel that they have resolved their Scope 2 greenhouse gas emissions challenge by switching to green electricity supply. This may be the case in the short term, but it would be as well to consider the context in the longer term so that more stable measures do not get overlooked.

Green electricity is generally a good idea in terms of stimulating the demand for renewable energy. However, in the UK, as well as in most other parts of the world, the level of renewable energy generation available is nowhere near the level of renewable energy demand, when taking into account electricity, heat and transport use.

Given projected electrification of heat and transport, the pressures on green electricity will be more than the country will be able to bear, even with the rich renewable energy resource that the UK has, without significant energy demand reduction and the price would be expected to rise significantly as more and more organisations use green electricity as a route to Net Zero. In order to minimise exposure to the volatility of the energy market and also ensure that the green electricity market stays at a reasonable price level, organisations should prioritise energy demand reduction rather than merely switching to green electricity.

Where site-based renewable energy generation opportunities are limited, an alternative to standard green electricity supply is peer-to-peer electricity supply, where a direct link is made between generator and consumer, allowing fixing of a favourable price over a longer period of time.

Scope 3 (indirect) greenhouse gas emissions generally represent the majority of a business’s greenhouse gas emissions (typically over 90%), although they are usually far harder to quantify than Scope 1 (direct) and

Scope 2 (energy supply related) emissions, which puts businesses off attempting to do so. However one business’s Scope 1 and Scope 2 emissions are another business’s Scope 3 emissions and so with the increase in attention given to reducing Scope 1 and Scope 2 emissions and reporting on these,

Scope 3 data is becoming more readily available with time. By establishing the systems for collection and processing of Scope 3 data, a business can build the facility to accommodate data when it becomes available in order to be on track towards Net Zero.

It will always be the case that boundaries will need to be drawn around Scope 3 data collection and accuracy will need to be defined in some way. However, by starting to record Scope 3 emissions, even with imperfect data, progress can be measured and a mechanism is established for communicating with, and putting pressure on, the supply chain towards combined endeavour.

Heat pumps use the least amount of electricity when the temperature of what they are heating is closest to the temperature of the heat source (e.g. the ground, air or water), as when this is the case, they have less work to do in raising the temperature. The ratio of heat produced to electricity input is referred to as the coefficient of performance (COP) and this will be greater with older buildings with heating systems that have been designed around high temperature water circulation through radiators

However, if larger radiators are installed, this allows the circulation temperature to be reduced and independently of the radiator size, the circulation temperature can be reduced when the outside temperature is higher at warmer times of year, maintaining the required level of heating. Combined with the fact that recent models of heat pumps are able to achieve reasonable COPs at higher temperatures, it is very possible to supply an old building with the heat it requires and with a level of greenhouse gas emissions that is significantly lower than the alternative of a fossil-fuelled boiler.

Solar photovoltaics (PV) gives the greatest revenue if offsetting imported electricity rather than exporting to the local electricity network, given the higher value of displacing imported electricity. If the electricity generated from PV that would otherwise be exported at certain times of day can be stored in a battery for use when the electricity demand exceeds the level of generation, then this can save money. Batteries can save the most money at scale, when they take advantage of revenue streams from balancing the grid electricity supply (grid services), rather than savings being based solely on balancing intermittent renewable electricity generation to match electricity demand on site. However, with recent electricity price increases, batteries can give an acceptable return on investment even when solely balancing on-site supply and demand.

At a UK national level, there is a better interseasonal match between wind resource and electricity demand than with PV and a well placed onshore wind turbine at scale will give a lower lifecycle cost per unit of electricity supplied than PV.

However, wind energy projects are significantly more complex than PV projects and are only suited to very specific locations with uninterrupted wind resource and where the impacts of the turbines are within acceptable limits. PV arrays on the other hand can be installed in a wider range of locations, and can be designed to make a valuable contribution to supplying electricity demand.

It may be that as PV continues to develop and come down in cost, it will become economical for it to be oversized to give more of a contribution to winter electricity demand, with any excess in the summer used to produce transport fuel or stored in another form.

Priority should always be given to reducing energy demand before determining the appropriate form and scale of renewable energy supply, in accordance with the Energy Hierarchy. However, there may come a point whereby there are diminishing returns from the implementation of demand reduction measures and renewable energy is a more economically attractive proposition.

For example, once a certain level of insulation is reached for a retrofitted building, then it may be uneconomic to carry on increasing the level of insulation and reducing the size of a biomass boiler or heat pump to supply the heat. However, it is not only the current costs that should be taken into account when deciding on the balance - the greater the level of energy demand reduction that can be implemented, the less the exposure will be to the future volatility of the energy supply market, renewable or otherwise.

There is not a strong case for hydrogen boilers to be the future for domestic supply via the gas network, but there is the potential for hydrogen to make a significant contribution to process heating in industry where there is no other viable alternative to fossil fuels.

The energy loss in converting primary energy (whether fossil, nuclear or renewable) to heat from hydrogen is typically over 40% i.e. one unit of primary energy will produce typically no more than 0.6 units of heat.

A heat pump on the other hand may produce over 4 units of heat per unit of primary energy input. On this basis heat pumps can supply over 6 times more heat per unit of primary energy input than a hydrogen boiler. Hydrogen has an advantage of being able to be stored, which is helpful when the primary source of energy is intermittent renewables.

However, excess heat energy from heat pumps can also be stored in the form of hot water to help address the mismatch between supply and demand. Much of the support for hydrogen boilers in people’s homes originates from the vested interests of the gas industry looking to sustain their legacy assets for business benefit, rather than being backed by engineering or economic analysis. Hydrogen may well have an important part to play in our future energy systems, but care needs to be taken in assessing its appropriate application.

Although electric vehicles result in less greenhouse gas emissions per unit of distance travelled during operation than internal combustion engine vehicles running off petrol or diesel, the emissions associated with the production of the vehicle (the embodied emissions) are to be taken into account when comparing the lifecycle greenhouse gas emissions per unit of distance travelled.

For an electric car that is driven the national annual average distance per year, the emissions from production of the vehicle may be comparable to the operational emissions over a period of around 10 years. For someone who drives over much less of a distance than average each year, the embodied emissions will be a much higher proportion of the lifecycle emissions, so this might affect how soon to invest in a new vehicle.

As more renewable energy is connected to the electricity network, the lower the emissions will be of grid supplied electricity and as a consequence those of electric vehicles. This will also affect the timing of the decision to buy an electric vehicle.

By connecting different buildings to a district heating network, the diversity of heat load gives a smoother overall demand profile than for a single building. This allows greater utilisation of the heat generation asset, resulting in potentially better economics and more efficient operation. Having centralised generation plant, as is the case with district heating networks, allows greater ease of access, operation and maintenance.

The investment in district heating infrastructure is only worthwhile if there is a high density of energy demand, which will result in a level of energy sale that will recoup the investment. This is typically the case in dense urban environments.

Renewable energy is already cheaper than fossil fuel energy in many cases. For example in the UK, onshore wind energy and large scale solar power give lower cost electricity than fossil fuel generation.

There are hidden costs and benefits associated with the use of fossil fuels that are not always taking into account when comparing with renewable energy.

Benefits include upstream subsidies and hidden costs include those of mitigating or repairing the damage caused by fossil fuels (external costs). When these external costs are taken into account, renewable energy can be even more attractive.

It is expected that with time and the pressures of climate impact, these external costs will be internalised and a view might be taken on this when investing in renewables.