Energy Efficiency

30 Jul 2019

Using More Energy Than Required is Literally Like Burning Money and Environmental Resources

30 Jul 2019  by Michael Holder   

LED lighting is among the most low-cost energy efficiency measures to implement

Report by EP100 campaign reveals over past year 18 firms have collectively saved $55m from smarter energy use.

Efforts from some of the world's largest companies to use their energy more efficiency have collectively saved them $131m, while curbing greenhouse gas emissions equivalent to the annual emissions of 134 US coal-fired power plants, according to the EP100 campaign.

A new report by the global initiative, which is run by green NGO The Climate Group and the Alliance to Save Energy, details progress to date from its 50 member companies, all of which have committed to significantly improving their energy productivity.

Firms as diverse as energy supplier SSE, insurer SwissRe and Indian cement brand UltraTech Cement have all signed up to the campaign, as part of which they commit to either doubling their energy productivity within 25 years, implementing an energy management system within 10 years, or achieving net zero carbon emissions from their buildings by 2030.

EP100's first progress report, released last Thursday, reveals that to date 21 reporting member companies are already 67 per cent of the way towards their energy productivity targets, collectively saving more than enough energy to power Germany for a whole year.

Moreover, the 18 companies which reported their financial data to the campaign have generated collective financial savings to the tune of $131m, while also reaping wider business benefits such as increased employee productivity and reputational boosts for their brands, according to the report.

In the past year alone, smarter energy use has saved those same 18 companies - which include major corporate names such as property giant LandSec, fashion retailer H&M, and hotel chain Hilton - $55m overall by achieving a higher economic output per unit of energy consumed.

On average EP100 companies are increasing their energy productivity by eight per cent each year, with nine members achieving an improvement of 50 per cent or more annually since their baseline year.

These energy efficiency efforts are having a sizeable impact on emissions, too, the report reveals. It estimates that 21 members reporting the emissions impacts of their energy productivity have avoided over 522 million tonnes of CO2 since their baseline commitment years, which is the equivalent CO2 to running 134 US coal-fired power plants for an entire year.

The report estimates that without the new energy efficiency efforts, EP100 firms would be using 146TWh more energy each year, producing emissions that would take an area of forest twice the size of the UK to sequester.

Helen Clarkson, CEO of The Climate Group, said the progress demonstrated by EP100 companies to date showed how improving energy productivity can unlock faster decarbonisation of the global economy.

"From the boiler room to the boardroom, smarter energy use benefits a business at every level, helping to meet the growing expectations of shareholders, customers and employees while generating capital that can be reinvested in clean growth," she said.

The report comes as a number of new companies sighned up to the campaign, including Swaraj Engines Ltd, Yanbu Cement Company, and Airport Authority Hong Kong. The new members mean the initiative now boasts more than 50 members with a combined revenue of over $382bn covering a range of sectors in more than 130 markets worldwide.

Many members reported payback periods of around two to four years on their investments in energy efficiency measures, and a survey of EP100 members in the report found 95 per cent cited financial savings as either a 'significant' or 'very significant' driver for smarter energy use.

That was followed by the desire to slash greenhouse gas emissions and reputational benefits, which were both highlighted as key drivers among 84 per cent of respondents.

After all, the International Energy Agency (IEA) estimated last year that greater energy efficiency alone could deliver as much as 40 per cent of the greenhouse gas emissions reductions needed to meet global climate targets in the Paris Agreement.

Yet despite the many clear benefitson offer form energy efficiency measures, EP100 members still cited a number of barriers towards investing in energy productivity. Over two thirds of respondents to the survey cited high upfront costs as a challenge, whule 63 per cent warned of regulatory and policy uncertainty, and 42 per cent said energy efficiency projects were hampered by competition for capital expenditure.

Businesses' concerns echo many of those repeatedly highlighted by green policy experts in the UK, where a damning recent report from MPs on the BEIS Committee warned the UK "stands no chance" of achieving its net zero ambitions nor interim carbon targets without urgent policy action to improve building efficiency standards. Similarly, the Committee on Climate Change noted recently that sufficiently ambitious energy efficiency policies have been sorely lacking. It is welcome news, then, that the government is now seeking views on how to overcome barriers to energy efficiencyamong businesses in the UK.

Jason Hartke, president of the Alliance to Save Energy, conceded there remained significant challenges to get corporate energy efficiency efforts into line with global climate goals. He urged more companies and governments to rapidly follow the lead of EP100 firms and embrace energy productivity best practices, "as the alternative is too costly to fathom".

"Using energy more productively is essential for addressing the climate challenge, but global progress has been far too slow," he said.

In the meantime, of course, even without wider supportive policies from government, the EP100 report demonstrates how businesses can make deep dents in their energy use and climate impacts while also boosting their bottom line by implementing some relatively straight forward measures. One member company, tech developer Johnson Controls, for example, has saved $33.5m since 2011 by implementing more than 1,000 low cost or no cost projects across its manufacturing plants.

But whether through smart energy technologies, insulation, or low energy lighting, payback on investments in energy efficiency measures are near guaranteed over time, and offer one of the cheapest means of decarbonising the economy. And as Anirban Ghosh, chief sustainability officer at EP100 member the Mahindra Group, points out in the report, not taking any action at all is often far more costly for a company.

"Improving energy productivity is the dominant form of mitigation that a corporation can contribute to," he states. "Using more energy than required is literally like burning money and environmental resources."

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