UNDERSTAND THE ISSUES: ENERGY

Sector

Overview

Extreme bouts of cold and hot weather across the world, as a result of the climate crisis, are increasing the demand for energy. In fact 2018 saw global carbon emissions actually increase from burning fossil fuels, such as coal and gas, according to the International Energy Agency. Countries are investigating other options to meet the ever increasing demand for energy in all countries.

While some of these include renewables, others include fracking, which has the potential to have an even more negative impact on the environment. However, the growth in renewable energy, particularly in places such as Europe, shows change is possible with commitment and momentum from governments, businesses and consumers.

issue

climate crisis

The UK still produces much of its energy from non-renewable sources with statistics from the first quarter of 2019 indicating just over a third (37.4%) of energy came from renewables. This is a vast improvement on past years, but shows the scale and pace of change must increase even further in order to meet the government’s target of net-zero carbon by 2050. Fossil fuels (mainly gas and coal) and nuclear energy are the two principal non-renewable sources of energy. Gas and coal produce greenhouse gases while nuclear energy carries the risk of a huge disaster in addition to significant mining and waste storage issues.

SOLUTION

Reduce demand & switch to renewables

While the existing options are far from ideal there are enough viable alternatives for all businesses and consumers to make real changes in reducing how much energy they use and ensuring the energy they do use is from renewable sources.

FOR EXAMPLE

unilever

Global food and personal care corporation Unilever announced in September 2019 that all of its factories, offices, R&D facilities, data centres, warehouses and distribution centres, across five continents, now run off 100% renewable grid electricity.
While some of this was achieved via purchasing Renewable Energy Certificates (viewed askance by some as a poor system that enables greenwashing) Unilever has secured 38% of its grid electricity from local renewable energy markets including building on-site solar electricity generation at 18 factories. They also reduced the energy demand across the company by 28%.
Importantly Unilever stated there had been no net on-costs as the savings the company was able to generate through power purchase agreements had counterbalanced additional costs.

action

For individuals

Consumers in the UK, like a well-run business, should first focus on energy efficiency and cutting overall use. This will range from investing in more efficient heating and cooling systems, such as ground source heat pumps, to checking lights are switched off when a room is empty.

Switching to companies that get 100% of their energy from renewable sources is one of the best ways to help grow a more competitive market in this area. However, do your research before choosing a supplier. Some suppliers have been routinely buying renewable energy certificates without actually directly buying or generating renewable energy. Ethical Consumer recommends Ecotricity and Good Energy.

action

For business

The biggest changes most businesses can make is to reduce energy demand. This will need budget to replace old equipment and plant with modern, energy efficient versions as well as better designed buildings and processes. However, payback on this investment should usually be within years, rather than decades, in reduced energy costs.

Secondly businesses can commit to sourcing 100% of their energy from renewable sources. One of the easiest ways of doing this is to switch energy suppliers to those that provide 100% of electricity from renewable sources. Which? recently released an investigation that found only two genuinely green energy suppliers in the UK – Ecotricity and Good Energy. Businesses can also generate their own power on-site through power purchasing agreements.

issue

commitment to change

The technology to shift entirely to renewable energy can be done and countries such as Paraguay and Iceland have proven it with their electricity grids now operating with 100% renewable energy. Many large UK businesses have also committed to a more ambitious target of net-zero carbon by 2030. Land Securities is one such company and it has also committed to a 70% reduction in absolute carbon emissions, including supply chains and construction materials.

However, European governments continue to subsidise the use of fossil fuels with the UK providing 12billion euros a  year, through tax breaks and budgetary transfers

To accelerate change governments, energy companies and businesses need to prioritise investment in infrastructure and system change. For example the national grid needs to be updated to cope with inconsistent energy supply and local planning policies need to be adapted to take into account the urgency of the climate crisis.

solution

invest to save approach

Adopting an invest-to-save approach will mean higher upfront costs but should reap both financial and climate rewards down the track. For example wind power has now moved from being a relatively expensive form of power to buy to being one of the cheapest; much cheaper than nuclear power. Alongside the more well known sources of solar, wind and hydro power there are also interesting new technologies on the cusp of commercial release such as power to gas, low tidal and wave systems. Wind power is now one of the cheapest forms of energy production, much cheaper than nuclear.

FOR EXAMPLE

dogger bank project

Large wind farms are a key part of a greener future for countries, particularly those like the UK that have long coastlines. The Dogger Bank project will be built in the North Sea next year as part of a joint venture between SSE and Norway’s Equinor. It will be the world’s largest off-shore wind farm when it opens in 2023. It will also be subsidy free, owing to the plummeting cost of wind energy. Ambitious investment in infrastructure like this will be key to securing a green energy future.

action

For individuals

Alongside monitoring their consumption of energy, households can also look to generate their own by investing in solar panels, which is currently the cheapest form of electricity generation. While surplus energy produced can be sold back to the grid the most economic approach is to size the installation to ensure all energy is consumed on-site to reduce energy bills.

action

For business

A key place to start is to define the future risk your business faces from the climate crisis. For larger businesses the model developed by the Taskforce for Climate-related Financial Disclosure will help investors, lenders, insurers and other stakeholders understand the capital expenditure required.

Companies can also ensure they are investing their corporate pension funds into green energy technology.

issue

FRACKING

Fracking – where water, chemicals and sand are blasted into deep formations of rock to release shale gas and oil – is on the rise globally. Potential risks associated with the approach include groundwater contamination, air-pollution, carbon emissions, explosions and earthquakes. Despite widespread opposition, 10 million acres of the UK are currently available to fracking companies.

solution

public pressure & research

The main solution to this highly unsustainable practice is to continue to put pressure on politicians and ministers and fund more research into the environmental impact of fracking. 

In November, 2019 the government halted fracking in England based on a report by the Oil and Gas Authority (OGA), which found it was too difficult to predict the risk of earthquakes linked to fracking operations. However, the timing of the ban, right before an election, was suspicious and it is not permanent. The government has stated the ban might be lifted if further evidence was provided that it could be carried out safely in the UK.

FOR EXAMPLE

norway

In 2019, the Norwegian government announced it was divesting from oil and gas exploration companies around the world. The reasons were not just environmental but also financial with endeavors like fracking, tar sands oil production in Canada and frontier oil exploration by British companies losing money. Once abundant Wall Street funding for fracking appears to be drying up, suggesting change is in the air.

action

for individuals

As well as activism, boycotting UK companies that frack overseas is also an effective way to combat the issue. British company BP and Anglo-Dutch owned Shell are too worried about their public image to frack in the UK, but have no qualms about doing so overseas. Both companies have large fracking operations overseas, far from the gaze of the British public.

action

For business

Many pension funds have significant investments in fracking. You can put pressure on your business’s pension provider to force fund managers to pull out of these environmentally catastrophic investments. If they won’t, you should consider taking steps to move your employee’s pensions to a more sustainable pension fund.

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This article was written in partnership with Ethical Consumer magazine. Revolutionise the way you shop, save and live with Ethical Consumer’s unique shopping guides >

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REAL is a community interest company that aims to support citizens and organisational leaders to transition to carbon zero and sustainability, founded by Safia Minney & friends.