xZero. Nothing. Nada. Diddly squat. Whatever you call it, reducing anything to zero is a tall order. Yet, says Annalisa Bell, strategic account manager at E.ON, that should be the goal of all manufacturers when it comes to their carbon emissions. “A ‘zero CO2’ target fundamentally boils down to using less energy and ensuring that whatever you do use comes from sustainable sources,” she explains. “It’s important that manufacturers – like all businesses – understand how and when they are using carbon; they have to understand all this before they work towards any strategies for zero CO2 goals.”
That’s not just a nice-to-have. In today’s demanding market place, Bell adds, sustainable manufacturing means a more competitive business, “helping businesses to save costs per unit, as well as helping to gain more customers, ultimately leading to long-term, sustainable growth”.
Manufacturers need to see the value that zero CO2 brings, both from the bottom line and from the top down. Energy consumption has found itself thrust into boardrooms up and down the country, not least thanks to rising costs, continues Bell. “Manufacturers have seen a rise in energy bills, particularly because of higher third-party charges and levies to pay for non-renewable energy sources on the grid,” she says. “There’s going to be a lot more pressure to hit carbon targets in the future, so the decisions that are being made in boardrooms must take energy consumption and sustainability into account.”
In addition, societal awareness of energy use, carbon emissions and climate change has never been higher. Movements like Extinction Rebellion have received large amounts of media attention, which has had a knock-on effect amongst the general public and their buying habits. “There will soon be a similar amount of urgency around energy use as there is on reducing single-use plastic,” predicts Bell. “As well as an increase in consumer or end-customer pressures, manufacturers are also feeling the pinch from their wider supply chains to provide low-carbon services and products. It’s therefore vital for companies to have a well-thought-out sustainability strategy and take a proactive lead as we transition towards a more sustainable future.”
Managing risks
A survey conducted by Manufacturing Management and E.ON in late 2018 found that more than 90% of business leaders are committed to reducing their energy consumption, and 77% agreed that a robust energy efficiency strategy on their site will lead to wider benefits across the company. However, there is a real concern that implementing such a strategy will come at a cost to the company’s bottom line. This, says Bell, is understandable. “Sustainability also needs to be seen as profitable,” she says. “From the research we conducted, we know that cost is still the main driver for business energy decisions. When we meet with manufacturers, the first question they always ask is ‘how much is it going to cost, and how much money will I save?’”
It may appear, then, that the ‘zero CO2’ ideal is doomed to fail thanks to perceived high costs. However, says Bell, there are many ways manufacturers can develop a strategy that works towards zero CO2 without breaking the bank. “The zero CO2 goal can be achieved through the decarbonisation of power and the electrification of processes,” she explains. “It’s important for manufacturers to do everything they can to reduce their energy use by developing an energy efficiency strategy. In the short-term this could include harnessing things like LED lighting, building management systems and the optimisation of existing assets. Longer-term they can work towards producing their own energy through on-site generation.
“What’s important is ensuring they meet their on-site demand, combining renewable generation through wind or solar with battery storage for resilience purposes. One example of the zero CO2 ideal is if a customer has a low-grade heat requirement, rather than going for a typical gas boiler or CHP installation, they could look to use a heat pump. The electricity needed to power that pump can be bought through the Renewable Energy Guarantees of Origin (REGO) scheme (see box), which will make it entirely carbon neutral, and very cost-effective.”
Cost is also a factor when manufacturers are investing in their plants. The rise of the Fourth Industrial Revolution has seen significant investment in robotics and new machinery, which, as Bell points out, “will increase manufacturers’ energy demands and power usage.” However, it also has the potential to improve sustainability. “The Fourth Industrial Revolution unlocks new sustainability opportunities around waste,” explains Bell. “With digital innovation and AI , manufacturers can optimise their processes, meaning they are able to produce more product for less outlay, thereby reducing the carbon footprint per unit. Technology will have an important role to play in the drive towards zero CO2.”
Another limiting factor when developing a sustainability strategy is the risk of interrupting production. “Manufacturers have to find an energy strategy that works for them,” says Bell. “All factories are different so they will need to develop a strategy tailored to their individual processes as part of the drive to zero CO2. To not do so will be a mistake. Companies that don’t have an energy strategy will fall behind the curve and risk losing out, both within their supply chain and from customers. That’s a real risk to their profitability.”
How E.ON can help
Sustainability is becoming more prevalent and widely understood in industry than ever before. As pressure grows from customers and suppliers, manufacturers will soon discover the fundamental need for them to change. To assist with this, Bell advises partnering with an energy specialist to develop an energy-saving strategy. MM’s survey from last year demonstrated that manufacturers are confused by who to turn to for help. Respondents were almost equally split between talking to their current supplier,
a facilities management specialist, a known energy company and the public sector. As Bell explains, E.ON is better-placed than many to offer such guidance. “We are making the transition towards 100% renewables, and are now helping our customers do the same. At E.ON, we take a holistic approach and create a smart, sustainable and personalised solution to help our customers, through the integration of energy efficiency, on-site generation and optimisation to help create long-term self-sufficiency. With a strategy designed by E.ON, we are able to consider the short-, medium- and long-term inputs into manufacturers’ energy, and help them transition. We are trying to create a future where our customers use less, and ensure that what they do use comes from renewable sources to guarantee a future for the next generation.”
Annalisa Bell develops sustainable energy strategies for UK businesses within the manufacturing sector. She joined E.ON in 2013 and has worked in a number of roles across District Heating, Demand Side Response and Battery Storage. Given Annalisa’s experience across the various roles within E.ON she is well placed to advise E.ON's clients on how to manage energy within their business, and help UK manufacturing businesses remain competitive in an increasingly challenging marketplace.
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The REGO scheme
The Renewable Energy Guarantees of Origin (REGO) scheme provides transparency to consumers about the proportion of electricity that suppliers source from renewable generation. All EU member states are required to have such a scheme. Ofgem, the government for the electricity and gas markets, issues one REGO certificate per megawatt hour (MWh) of eligible renewable output to generators of renewable electricity.
The purpose of the certificate is to prove to the final customer that a given share of energy was produced from renewable sources. Generators of renewable energy of any size in the UK can apply for the scheme.
