What are the advantages of renewable power?
10th June 2019
While the environmental benefits of renewable power are clear to most organisations and consumers, the commercial advantages may be less obvious. This post summarises recent sustainability successes and describes how switching to renewable power could bring benefits.
Read more on the advantages below:
The Climate Change Act 2008 establishes the UK’s commitment to reduce carbon emissions by 80% (compared to 1990 levels) before 2050. And in April 2020, Britain went without coal-fired power generation for more than 438 hours, according to National Grid data. It’s the longest uninterrupted period since 1882, so we’re clearly making progress.
Even so, the unpredictability of 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, the electricity system operator (ESO) needs completely reliable sources of renewable power to bridge the gaps. Biomass and hydropower, for example, will be vital in helping ESO match supply with demand and keep the system in balance.
More about biomass and hydro-power
Drax Power Station is the UK's largest renewable power station, as well as the home of the largest decarbonisation project in Europe. It provides a reliable and flexible source of renewable energy to support intermittent renewables such as wind and solar. The site is now developing a negative emissions technology – bioenergy with carbon storage (BECCS) – that’s essential for tackling the climate crisis. BECCS also underpins the Drax ambition to be a carbon negative company by 2030.
In addition, Drax 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, after reaching full load in just 30 seconds, can deliver balancing and ancillary services to the energy system. The Drax portfolio also includes the Lanark and Galloway run-of-river hydro schemes.
The business benefits of renewable power
The commercial advantages of changing to renewable power are, in summary:
- 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. With an energy-efficiency programme, manufacturers could save 10-30% of these costs within three years.
BT saved £2,147 million in 2014/15 through adopting energy reduction measures at its data centres. And since 2002, 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 carbon dioxide (CO₂) emissions by 30% between 2005 and 2020, on a comparable basis.”
Risk management and resilience
Increasingly, organisations that use a significant amount of electricity are turning to self-generation. Following an initial investment (e.g. in solar panels), they can start producing their own renewable power and reduce their reliance on electricity from the grid.
This brings several advantages, including the potential to use less centrally-generated power – including at peak times, when it’s most expensive. What’s more, when power from the grid isn’t available for some reason, organisations with access to self-generated electricity can keep running with no risk of downtime.
Carlsberg has already achieved its goal of sourcing 100% renewable electricity at its breweries by 2022. The company's well on track with 100% renewable energy powering its 29 breweries in Western Europe in 2018. And renewables are the source of 64% of its total electricity consumption worldwide.
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. Unilever also stated that its ‘Sustainable Living’ brands accounted for 60% of its growth in 2016. What's more, 100% of the grid electricity it used in manufacturing was generated from renewable resources.
For any organisation, a focus on setting and achieving CSR goals has the potential for generating a stronger platform for positive PR. In turn, this can help make it 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 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 organisations 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 programmes boost employee morale and help make organisations more attractive places to work. This is the experience at GE, where energy experts and staff identify and recommend efficiencies. The employees say taking part increases their commitment to GE, and the business reports savings of $150 million since the project began.
For organisations, renewable power has the potential to generate savings as well as commercial and PR opportunities. It also helps them meet their CSR commitments, appeal to customers and stakeholders focused on sustainability, and make a positive contribution to the environment.
With so many benefits, isn’t it time to switch to renewable electricity?
If your organisation is considering such a move, contact our experts to discuss your options and find what suits your needs.Contact us