ahead of the curve - meuc … · ahead of the curve innovation and efficiency lead the way pages 20...

SPRING 2019BUYING & USING UTILITIES

Ahead of the curveInnovation and efficiency lead the wayPages 20 & 21, 22

16WATTS: THE COST

17LEAKING INFORMATION

BGB_I&C_GreenFinance_MEUC_PrintAd_V04_AW.indd 1 01/04/2019 14:30

BUYING & USING UTILITIES

Major Energy Users’ Council8 Fenchurch Place London EC3M 4AJTel: 0203 432 0333 Email: [email protected]: www.meuc.co.ukTwitter: @meucevents

Chairman: Peter Roper Email: [email protected]

Chief Executive: Robin Hale Email: [email protected]

Commercial & Operations Manager: Sandra BarradasEmail: [email protected]

Membership Manager: Caroline BuckleyEmail: [email protected]

Development Director: Andrew BuckleyEmail: [email protected]

Data & Communications Manager: Claire Slade Email: [email protected]

Buying & Using Utilities is published four times a year by MEUC for its members and for large utility customers. The publishers are not responsible for any statement made in this publication. Data, discussions and conclusions developed by authors are for information only and not intended for use without independent substantiating investigation on the part of potential users. Opinions expressed are those of the authors (or contributor to discussion) and are not necessarily those of MEUC, Buying & Using Utilities or its publishers. © MEUC 2019

Editor: Dr Trevor Loveday Email: [email protected]

Editorial Assistant & Advertising: Sandra BarradasEmail: [email protected]

Design: Richard HillEmail: [email protected]

Subscriptions: Tel: 0203 432 0333Email: [email protected]

Print: Premier Print Group, LondonWeb: www.premierprintgroup.com

This magazine is also available in electronic format. If you would prefer to download B&UU rather than receive a print version, please email: [email protected] with your contact details.

SPRING 2019 B&UU 3

CONTENTS

Follow us on Twitter @meucevents

IN THIS ISSUE

MAJOR ENERGY USERS’ COUNCIL

BGB_I&C_GreenFinance_MEUC_PrintAd_V04_AW.indd 1 01/04/2019 14:30

RoadshowsOur one-day conferences in London and Leeds will cover key issues and vital updates for our members. The agenda typically includes a great line up of experts from Government, regulation and business users and a networking exhibition to make and renew contacts.

3 October, Guoman Tower Hotel, London

15 October, Leeds Armouries

Members’ Policy Group MeetingsThese meetings with Whitehall representatives provide members with a valuable opportunity to hear and question policymakers on current thinking.

Spring – May, Burges Salmon offices, London

Summer – Sept, Burges Salmon offices, London

Winter – 5 December, Church House, London

Members’ End of Year – Evening Networking ReceptionHosted by Lord Teverson of Tregony, this evening of networking, canapes and drinks at House of Lords brings together our members, Government officials, regulators and industry experts as well as other invited guests in a truly splendid setting.

5 December, House of Lords

MEUC’S 2019 event diary dates

4 MEUC NewsIt’s been a while

6 & 7 Renewable buyingDavid Taylor explains the green business case for taking control of your energy

8 MEUC NewsGas looks set to play second fiddle while solar and wind blows the top line. Eddie Proffitt writes

10 & 11 Parliamentary insightsGeoff Davies hears optimistic views of energy security and environment, amid the agony of Brexit

12 & 13 Energy management Ashley Phillips maps changes in the regulatory landscape ahead

14 & 15 Water savingGlenn Smith tells how water savings equal more than just pounds and pence

16 Energy procurementA digital energy procurement and management platform for major energy consumers

17 Water efficiencyMark Taylor, takes us through the benefits in more water monitoring and management

18 ServiceCorona Energy says it is different because its clients are all different

20 & 21 InterviewHannah Drake is ready to dig into energy markets with some powerful technology

22 Risk managementAmeresco’s Kath Chapman offers a way through the complexity in decarbonisation

24 & 26 News & events

4 B&UU SPRING 2019 Visit www.meuc.co.uk

MEUC NEWS

It’s been a while“It’s been a while,” should have been my opening line at the recent Big Bash, which certainly didn’t turn out to be the day I expected, ending up at A&E with Don McGarrigle who was taken ill. Just glad to be there to help out. There will, moving forward, be time for me to come and introduce myself personally to those who don’t know me and to be reacquainted with those I’ve lost touch with over the years.

First though, an initial introduction. Exiting Kingston University with an Applied Physics degree before undertaking a small stint in the public sector, I began working in the energy industry as Membership Manager at the MEUC in 1997; continuing as Director and

General Manager in the early 2000s before leaving at the end of 2008. In the decade since, I’ve spent most of my time at the Energy Services and Technology Association, the past five years as its Executive Director.

Being given an opportunity to return (thank you Peter) feels like coming home. Many of my colleagues are still around and the importance of the MEUC as the voice of utility users and all that that encompasses, is as relevant, if not more so, than it was 20 years ago when I began on this journey.

What can you expect as we head towards a new decade? Visitation will be a priority for me. Any community/association/membership needs to evolve and embrace change, not solely through directives from the top but by gaining an understanding from issues that concern those that keep it going.

You, the members, are the most important part of this organisation and it will be my remit to provide you with a voice and deliver the right services, benefits and opportunities through engagement and understanding to aid you in your day-to-day activities.

Your input will help to shape the future of the MEUC, help us to understand where we can add value, provide insight and information, lead the sector, promote best practice, share experience and make a difference and not just for the short term.

I hope to see some of you before the training academy in May and certainly before the autumn roadshows. If you would like to get ahead of the visitation list (separate to those by Andrew Buckley and Eddie Proffitt) please give me a ring on: 0203 432 0337 or drop me an email at: [email protected]

I look forward to continuing the journey with you.

Robin Hale, Chief Executive, MEUC

Your input will help to shape the future of the MEUC.

Low-carbon growth high

The renewable heat sector saw the biggest growth in terms of turnover, to £1.7 billion in 2017, from £0.5 billion in 2016.

Estimates from the public spending watchdog, the Office for National Statistics (ONS), have shown the UK low-carbon and renewable energy (LCRE) economy as having grown by 6.8 per cent to £44.5 billion in 2017.

The findings reported in the final results from the ONS’s Low-Carbon and Renewable Energy Survey, showed the number of employees working directly in the LCRE economy was stable, at 209,500 full-time equivalents. Businesses with activity in the energy efficient group continued to account for almost half of the total LCRE turnover, at £20.7 billion, and over two thirds of total employment.

The increase in the LCRE turnover was driven by UK businesses classified under the production of electricity, while the increase in the number of employees working directly in the LCRE economy was due mainly to increases within the construction industry.

The renewable heat sector saw the biggest growth in terms of turnover, to £1.7 billion in 2017, from £0.5 billion in 2016. This was largely due to increased activity in businesses within the production of electricity industry. Turnover from onshore wind activity fell to £2.8 billion in 2017,

from £3.3 billion in 2016, driven by a decrease from businesses within the manufacturing and construction industry. Exports from the low-emissions vehicles sector were £2.8 billion in 2017, over half of total UK LCRE economy exports.

Separately, newsletter, Carbon Brief, said that after peaking in 1973, the UK’s carbon dioxide emissions had declined by around 38 per cent since 1990, faster than

in any other major developed country. Carbon Brief’s analysis of the reasons for this showed that the most significant factors included a cleaner electricity mix based on gas and renewables instead of coal, as well as falling demand for energy in homes, businesses and industry.

Declines in the UK’s carbon dioxide had persisted despite an economic recovery from the financial crisis a decade ago. Where

earlier reductions were largely negated by rising imports, the past decade had seen genuine cuts in the amount of carbon dioxide for which the UK was responsible.

The country’s carbon dioxide emissions in 1990 totalled around 600 million tonnes, falling to 367 million tonnes in 2017. Carbon Brief commented that if underlying factors driving the emissions had not changed, a growing population and a constant

electricity generation mix would have led to emissions increasing by around 25 per cent compared with 1990 levels; instead, they had fallen by 38 per cent. Overall, emissions in 2017 were 51 per cent lower than they would have been without these changes. Additionally, the factors driving the emission reductions were likely to continue into the future as the UK’s remaining coal was phased out by 2025.

e [email protected]

w coronaenergy.co.uk

Contact us today for a quote0800 804 8589

Service, defined by you.Corona Energy is a leading independent energy supplier to UK businesses. Established for over 20 years. We help our customers save time, energy and money - your time is precious, so we put account and billing information at your fingertips with myCorona, our online 24/7 account management service. Our team of experts deliver exceptional customer service. We provide 100% renewable gas and electricity


RENEWABLE BUYING

Future proof your business with renewable energy supply contracts There is a green business case for taking control of your energy consumption. Sales and Marketing Director of Bryt Energy, David Taylor, explains what to do.

The energy market is changing. The ‘Sustainable pound’ is king these days, and many businesses view this as part of their brand positioning and Corporate Social Responsibility (CSR). Whether you’re a small or large business, you’ll also need to prepare for the new carbon reporting requirements. To take control of your energy consumption, consider: What to buy, when to buy and how to buy.

What to buy – The benefits of a renewable energy supply A zero carbon, 100% natural renewable electricity supply can help you win more business, without any additional cost. It’s an inexpensive way of improving your CSR, reporting on your carbon requirements and helping the environment. With more businesses looking at their supply chain, using renewable electricity could make your business more valued and be an important business differentiator as you position your brand as sustainable.

Improve your CSRThe RE100, a group of leading companies across multiple sectors, such as Apple, Facebook, Ikea, BT, The Crown Estate and Diageo, have all committed to 100% renewable electricity. In 2017, a Capgemini study found that “globally, RE100 companies are financially more profitable than their competitors in each sector”1. These businesses are clearly on to something if they are outperforming competitors in each sector. Even B2B companies, not driven by consumer wants, are still benefiting on their bottom line.

The RE100 and other forward-thinking companies are now looking at their Scope 3 reporting – their Supply Chain’s carbon emissions and Corporate Social Responsibility (CSR) activities, ensuring they demonstrate their sustainability and act ethically. You can get ahead of the game and differentiate yourselves by addressing 1 of the 17 United Nations’ Sustainable Development Goals – Clean Electricity. That means if you want the competitive edge to supply to these giants, buying zero carbon, renewable electricity is a big step to getting it.

Report on your carbon requirements How, and what, companies need to report on emissions is changing. You may have heard of the Streamlined Energy & Carbon Reporting (SECR) framework. If you haven’t then you might want to see if you are one of the estimated 11,900 businesses that will need to report on your energy consumption and Greenhouse Gases in your annual report for financial years beginning on or after 1 April 20192.

This reporting has been introduced in place of the Carbon Reduction Commitment (CRC) report and aims to make reporting easier, whilst increasing the transparency of emissions to investors and encouraging businesses to act on climate-related

This is a Bryt Energy example graph and is not reflective of market prices

SPRING 2019 B&UU 7Follow us on Twitter @meucevents

RENEWABLE BUYING

risks. You can calculate your own business’ carbon emissions caused by your electricity consumption on our Carbon Calculator.

Help the environment Not all green energy is created equal and if your supplier is offering a low carbon product it is worth checking the fuel mix behind the supply. For example, Nuclear generation is often quoted as green and low-carbon, but it comes from a finite resource with the added impacts of radioactive waste. Plus, whilst Bioenergy is classed as ‘renewable’, it often requires combustion to generate electricity and is linked to an increased carbon production.

At Bryt Energy, our electricity is sourced solely from Wind, Hydropower and Solar. That’s because we’re passionate about a natural renewable supply that doesn’t harm the environment, as we take businesses on a carbon-reducing journey,

When to buy – The benefits of flexible purchasing Electricity prices are volatile, influenced by multiple factors such as international fuel prices, UK supply and demand, and power plant availability. Whilst a fixed contract could provide you with budget certainty, each business is bespoke, and flexibility is key to spreading and reducing purchasing risk in a volatile market. As price levels change, purchasing energy flexibly – based on time or price triggers – could help you manage risk and control costs.

It’s also worth reviewing whether to fix your non-energy costs, which account for 40-50% of your total energy price. Passing-through these charges means you only pay for what you use with no added risk premium, allowing you to control your costs in a way that works best for your business. At Bryt Energy, we can offer flexible and pass through contracts that are bespoke to your business and its needs.

How to buy – Could Time of Use Tariffs benefit your business? It is important to consider the ‘shape’ of electricity prices across the day. Choosing the right contract structure provides opportunities for cost management and savings when coupled with changes in your consumption.

For example, a standard two-rate (day and night) contract could average out charges across all daytime periods to around 14p/kWh3. Whilst this simplifies what you see on your bill, you could pay more for what you use as it discourages you to optimise your consumption.

Alternatively, Time of Use price structures split your consumption into various usage periods and give specific rates for each. For example, a peak day rate could be 50 p/kWh, when demand – and system and network charges – are at their highest, compared to rates across the rest of the day of around 12 p/kWh4. These rates encourage you to manage your electricity usage by shifting it out of the expensive times of day.

Pioneering technologyCombining a Time of Use Tariff with future-focused technology, such as on-site solar generation and storage, can help shift your load out of peak times and lower your electricity purchasing costs by up to 20%5.

This works by charging your battery when electricity is cheap (such as at night or when you get excess power from on-site solar generation) and ‘shifting’ this power to use when electricity from the grid is expensive (i.e. during the day and peak periods). Operating your battery this way will alter your company’s pattern of electricity demand from the grid and save you money – a simple solution that could revolutionise your business’s energy consumption.

Optimisation controlsYour supplier should also be able to offer you optimisation controls that make your renewable electricity supply and storage technology go further. Our Virtual Power Plant allows you to use your battery intelligently to minimise costs and optimise revenue. Think of our Virtual Power Plant as a ‘super brain’. Working alongside our specialist traders, it can make the most of your assets. It reviews throughout the day the best time to use your generation or storage assets (when prices would be high from the grid) and sell your electricity back to the grid.

Whenever and however you decide to purchase renewable electricity, your supplier should deliver contract structures, flexible purchasing arrangements and pioneering technology that help lower your consumption and reduce your energy bills.

At Bryt Energy, we offer the full package of zero carbon renewable electricity, on-site solar generation, battery storage and optimisation controls, to help you extract the most value from your electricity. We care and want to partner with you to offer long-term strategies, putting you in control of your low carbon energy future.

Bryt Energy is a passionate, future-focused energy company, on a mission to take businesses on a carbon-reducing journey. Their power is zero carbon and 100% renewable, using only Wind, Hydro and Solar energy sources to power UK businesses. Whether it be on-site generation, battery storage or optimisation controls, they are at the forefront of the clean energy technology revolution.

Bryt Energy is part of the Statkraft group, Europe’s largest generator of renewable energy and leading international hydropower company.

Learn more about Bryt Energy and their vision at https://www.youtube.com/watch?v=1JTmC73eFYo

For any more information, please get in touch at [email protected] or 0121 726 7575.

Sources

1 CAPGEMINI https://www.capgemini.com/wp-content/uploads/2018/09/RE100_POV.pdf

2 SECR https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/729586/SECR_Govt_response_Final__1_.pdf

3 Bryt Energy example statistics, not representative of market prices

4 Bryt Energy example statistics, not representative of market prices

5 Bryt Energy Statistics 2018-2019


MEUC NEWS

In concertGas looks set to play second fiddle while solar and wind blows the top line. MEUC Technical Director, Eddie Proffitt writes.

Recently, National Grid’s Electricity System Operator (ESO) asserted that, as carbon is squeezed out of the country’s energy mix there is a growing need for thinking in terms of the whole system of power and gas combined.

The observation came in the ESO’s latest Summer Outlook report – its annual summary of the grid balancing challenges it expects to encounter as demand on the transmission system changes. In the report, National Grid said it expects transmission system demand to fall broadly in line with last year’s figures, owing principally to a collapse in new solar photovoltaic (PV) deployment. Deployment of new solar PV capacity has fallen in line with the retreat of subsidies.

The forecast for peak electricity transmission demand is 33.7GW while minimum demand is expected to be around 17.9GW, both figures down 100-200MW

which, when combined with significant quantities of wind generation, sent the country’s wholesale market into negative pricing for six hours straight.

National Grid reported:On this day the UK witnessed the system price dip to -£50/MWh from settlement period 21 (10:00 – 10:30am) and remain negative until 4:30pm as the country basked in unseasonably warm and bright conditions. In fact, the price fell as low as -£70.24/MWh during settlement periods 28 and 29, a steep decline that was attributed to the “shock effect of the sudden sunny weather” that sent the public outdoors and system demand falling in tandem. That resulted in what energy traders billed as an “unprecedented turn of events”.

decarbonisation and decentralisation drive the country’s gas and electric grids together.

Writing in the outlook’s foreword, National Grid’s ESO Director, Fintan Slye, said there would be “increasing interactions” between gas and electricity markets and operations, as new energy challenges emerge. The ESO has illustrated this by showing how renewable and gas-fired generation mirrored each other throughout last summer (figure 1), creating additional volatility that required more hands-on management.

Meanwhile gas generation must cope with being the poor relation, essential to keep the lights on but always playing second fiddle to other forms of generation. This is shown in figure 1 with load factor varying by a factor of three with the lowest being about 17 per cent from a process that can normally achieve over 85 per cent.

Based on its current data, National Grid has said in its outlook report that levels of inflexible generation on the grid (mainly nuclear) plus flexible wind will exceed minimum demand during some periods this summer, requiring intervention.

As well as utilising the country’s pumped storage fleet, flexible wind output at a national level may need to be curtailed via the Balancing Mechanism or direct trades, and interconnector imports may need to be reduced. However, the ESO has also said that whole-system thinking is to become increasingly important as trends related to

in comparison to last year’s expectations. And National Grid’s understanding of, and ability to, forecast solar generation has also improved. It has developed a machine learning-based national solar power model, implemented last September in association with Reading University, which has reduced the ESO’s absolute solar forecasting errors by around 33 per cent.

The need for such tools was brought into sharp focus on 24 March, when unseasonably sunny weather sent PV generation to more than double its seasonal average and some 700MW above forecast

Hence the gas side of the energy industry is focusing on the conversion of heat. We had the Government’s spring statement promising to remove gas from new-build homes from 2025, however last year we built 160,000 new homes and with a housing stock of over 27 million homes it would take 168 years to replace them all.

If we are to achieve this by 2050, we would need to increase our new home build to over one million homes a year. This is pushing gas companies to look for alternatives, mainly the use of hydrogen, however despite several companies proposing hydrogen schemes the Government appears to be reluctant to commit to support them. The total cost of schemes I have seen to produce hydrogen from natural gas is less than one year’s revenue being collected by suppliers for the suspended electricity capacity market.

Whole-system thinking is to become increasingly important as trends related to decarbonisation and decentralisation drive the country’s gas and electric grids together.

Image: National Grid

TOTAL GAS & POWER LIMITED

As one of the UK’s largest business gas suppliers, we are renowned for the clarity of our charges and communications. Now we’re building a similar reputation among our electricity customers.

0800 542 3275totalgp.com

OUR ELECTRICITY SUPPLY IS AS TRANSPARENT AS OUR GAS


PARLIAMENTARY INSIGHTS

Back in January, the Department for Business, Energy and Industrial Strategy (BEIS) issued a summary of steps taken with the aim of preparing businesses for the UK leaving the European Union (EU). These included the following relating to energy:

• new laws for a nuclear safeguards regime to maintain the UK industry’s ability to trade in the nuclear sector and meet international obligations;

• technical notices relating to oil and gas, climate change, company law and state aid;

• work with Ofgem, the Northern Ireland Utility Regulator and interconnector operators to put in place arrangements aiming to ensure that electricity and gas continue to flow across borders through interconnectors;

• nuclear cooperation agreements signed with Australia, Canada and the United States;

• a requirement on companies from day one to report their carbon emissions, plus a carbon tax of equivalent impact; and

• secondary legislation aimed at ensuring that energy laws function effectively after exit day.

In the same month, in a letter to a newspaper, Energy Secretary, Greg Clark, projected an optimism far removed from the widespread misgivings following Hitachi’s stoppage of investment in the Wylfa nuclear power project. With the global energy market changing fast, he said that the costs of cleaner sources of power had fallen to a point where they would soon need no public subsidy.

Mr Clark went on to claim that the country’s electricity requirement for the 2030s was “not a

problem of shortages but the much better challenge of abundance”. The Government was, he said, committed to nuclear power but as part of a diverse energy mix, whose developing technology and economics meant that the country had “a wider choice of power at a lower price than ever before”, with much of it able to be deployed “within years rather than decades”. He claimed that the country was “in a strong position where supplies are secure and costs are falling”. An energy white paper would be published in the summer, which, he said, would “set out how taking advantage of these developments could benefit industrial and commercial customers”.

February soon brought further optimistic comment, when Under Secretary of State at the BEIS, Lord Henley, responded to a Parliamentary question posed by Lord Haworth, who asked what the Government’s plans were for meeting UK energy needs, following the recent cancellation of plans to build new nuclear power stations in Cumbria and Wales. Lord Henley replied that since the Wylfa and Moorside projects were not due to be operational until the late 2020s, there was a range of options for replacing this capacity over that timeframe.

National Grid had said that there would be no issue with future security of supply as a result of the cancellations and there was time for the market to react. Last year the Government had procured over 3GW of offshore wind in a single Contract for Difference auction, at a price of £57.60 a megawatt hour. Wylfa and Moorside remained “potential sites for nuclear new build under the current National Policy Statement”, and he, and BEIS officials, remained “willing to meet with any viable proponents wishing to develop these sites”. Finally he said that in the white paper planned for the summer, the Secretary of State would set out a new approach to financing new nuclear.

Meanwhile the European Commission opened “an in-depth investigation” to determine whether the UK’s Capacity Market scheme to safeguard security of electricity supply was in line with EU State Aid rules. Back in 2014, the Commission concluded that the scheme was necessary, was in line with EU energy policy objectives, and did not distort competition in the Single Market. But in November 2018, following an appeal by a company operating in the market, the EU General Court annulled the decision on procedural grounds (Case T-793/14). It ruled that the Commission should have opened an investigation to gather information on elements relating to the participation of energy consumers offering to reduce their electricity consumption in times of supply disequilibrium in the electricity market.

Also in February, BEIS published its second statutory report to Parliament, outlining progress specifically in the Government’s implementation of the Euratom Exit strategy. The report covered EU negotiations, domestic operational readiness, legislation and international agreements during the three months to 26th December. It named the latest developments up to the end of December as:

Sunnyside up, with a hint of

moonshine Geoff Davies of WWAM Writers quotes optimistic top-level comments made about energy security and environment,

amid the continuing agony of Brexit details.

Mr Clark went on to claim that the country’s electricity requirement for the 2030s was “not a problem of shortages but the much better challenge of abundance.


PARLIAMENTARY INSIGHTS

• withdrawal agreement and political declaration agreed between the Government and the European Commission and adopted by the EU27, subject to UK Parliamentary approval;

• the nuclear cooperation agreements with Australia, Canada and the USA and two safeguards agreements with the International Atomic Energy Agency laid before the UK Parliament and ratified as of 19th December;

• domestic safeguards regulations and impact assessment laid in Parliament;

• Government response to consultation on the safeguard’s regulations published;

• Government committed to providing the funding to set up the new safeguards regime, including the costs of achieving international standards by March 2019 and of reaching – by 2020 – equivalence in effectiveness and coverage as that currently provided by Euratom; and

• No-Deal contingency planning put in place.

Aiming to be cleanerMarch then brought a new development, with Energy Minister, Claire Perry, announcing a joint Government-industry Offshore Wind Sector Partnership, aimed at seeing offshore wind power providing a third of all UK electricity by 2030.

The announcement said that industry was to invest £250 million, with the objective described as developing the UK supply chain to increase global exports “fivefold to £2.6 billion”. Noting that this was the tenth Sector Deal from the Government’s Industrial Strategy, the BEIS further defined its aspiration as: “This deal will mean for the first time in UK history there will be more electricity from renewables than fossil fuels, with 70 per cent of British electricity predicted to be from low-carbon sources by 2030 and over £40 billion of infrastructure investment in the UK”. Ms Perry commented that it would “drive a surge in the clean, green offshore wind revolution”.

In a similar vein, speaking for industry, the Co-Chair of the Offshore Wind Industry Council, Benj Sykes, (who is also Orsted UK Country Manager) commented: “Now that we’ve sealed this transformative deal with our partners in Government, as a key part of the UK’s Industrial Strategy, offshore wind is set to take its place at the heart of our low-carbon, affordable and reliable electricity system of the future”.

Alongside these developments, the Department for Environment, Food and Rural Affairs (DEFRA) and BEIS jointly published environmental reporting guidelines, as a document designed to help compliance with the Streamlined Energy and Carbon Reporting (SECR) regulations. The announcement noted that the document could also help all organisations with voluntary reporting on a range of environmental matters, including greenhouse gas reporting and the use of key performance indicators.

The guidance includes changes – scheduled to take effect on 1 April – that require all UK quoted companies to report on their global energy use in addition to greenhouse gas emissions in their annual Directors’ Report. There are also requirements for large unquoted companies and limited liability partnerships to disclose their annual energy use and greenhouse gas emissions and related information.

The requirements affect:

• all UK incorporated companies listed on the main market of the London Stock Exchange, or on a European Economic Area market, or whose shares are dealing on the New York Stock Exchange or NASDAQ;

• unquoted large companies incorporated in the UK, which are required to prepare a Directors’ report under part 15 of the Companies Act 2006; and

• large Limited Liability Partnerships (defined as per the existing framework for annual accounts and reports, based on sections 465 and 466 of the Companies Act).

The announcement noted that the Government encourages all other companies to report similarly, though this remains voluntary.

The EU Energy and Environment Sub Committee invited a group of experts to explore how, after Brexit, to replace EU mechanisms designed to ensure compliance with environmental obligations. The Sub Committee’s previous enquiry found that the ability of the European Commission and the Court of Justice of the EU to hold member states to account helped to ensure the UK’s compliance with EU law. The target of the session was to explore whether the proposals in the Government’s draft Environment (Principles and Governance) Bill published in December to establish an Office for Environmental Protection were sufficient to ensure that Brexit did not result in a reduction in environmental protection.

The same committee also held a session to hear evidence from researchers, climate experts and representatives of industry (including Energy UK Chief Executive, Lawrence Slade,) on the implications of Brexit for carbon pricing – designed to reduce greenhouse gas emissions by increasing the cost of emitting them. One of the main carbon pricing mechanisms in the UK is the EU Emissions Trading Scheme, but as it appeared likely that the UK would withdraw from the scheme when it left the EU, the Committee explored the options suggested by the Government for deal, and no-deal scenarios.

National Grid had said that there would be no issue with future security of supply as a result of the cancellations and there was time for the market to react.

We are in testing times and they are bringing growing challenges around budget, sustainability and productivity for energy managers. The pressure is on to find creative ways to manage energy and meet the demands of stakeholders, shareholders and consumers alike.

Last year, wholesale electricity and gas prices reached a ten-year high. Drivers for

that rise included diminished gas supply, high carbon prices and heightened global energy demand. Add Brexit uncertainty and a weakened pound to the mix, and it’s easy to see why budget tension has been building for many businesses. However, an ability to work differently can enable businesses to take back control during these days of flux. Examples of options

available include embracing flexible consumption via demand-side response schemes and securing longer-term price stability through a corporate Power Purchase Agreement (PPA). And seeking expert advice on risk management can save money and bring peace of mind.

But pricing is only part of the picture. We’re also transforming towards a greener, more decentralised and more interactive energy future. While this is a positive development, it also brings a need to understand new regulation, new structure and new cost bases. Keeping up to speed with these can be daunting, so at Ørsted, we provide regular news on regulation and industry updates for customers. For details, you can read our latest reports and guides. For now, here’s an overview of the main changes that energy managers should take account of in their forward planning.

Fair shares Ofgem recently published a summary of its proposed work plan for 2019 – 2021. This included a focus on networks and system operation that sought to ensure that networks operate effectively within the context of our evolving energy system – and at a fair and affordable cost to all. Its chief points are outlined in the box, Ofgem’s plan.

Domestic market impacts for businessesNine electricity and gas suppliers stopped trading in the second half of 2018. Most served the domestic market and included Extra Energy, Spark Energy, Iresa and, most recently, Brilliant Energy.

When this happens, the customers are allocated to a new supplier under the Supplier of Last Resort (SoLR) process. This can affect businesses because the supplier who takes on those customers can claim any costs they incur as a result. These costs are then recovered from end users via gas and electricity transportation charges. It can


ENERGY MANAGEMENT

An ability to work differently can enable businesses to take back control during these days of flux. Game

changes For energy managers, being up to date on industry changes and regulations gives them a real advantage. Here’s an overview of big-ticket items up ahead from Managing Director, Ørsted Sales UK, Ashley Phillips.

Ofgem’s planReviews of network price controls are on the horizon. Meanwhile other regulatory changes are in the offing and all have implications for prices.

Reviews of price controls for network companies Ofgem’s framework to set network price controls – Revenue = Incentives + Innovation + Outputs (RIIO) is currently coming to the end of its first period. In April 2021 the price controls for gas distribution, gas transmission and electricity transmission networks are due for renewal under RIIO-2 which will inevitably bring a change to costs that must be budgeted for.

A targeted charging review This is underway, looking at how electricity network charges are set and recovered. At present, most electricity network costs are collected through residual charges. These charges don’t vary with network usage and often relate to costs that have already been incurred, such as upgrade investment.

Two proposals of means to keep charges fair are on the table:

• a fixed charge where the residual charges are tiered in relation to usage, using line loss factor and connection voltage as a guide; and

• an agreed capacity charge methodology. Payments will be aligned with the capacity agreement that a business has with its network operator but won’t take account of actual usage.

A decision on the Targeted Charging Review is expected in June 2019, with implementation from April 2021 – spelling a revision to charges for businesses.

Embedded benefits Businesses with on-site generation need to keep up-to-date with changes to embedded benefits. Ofgem is proposing to remove the cost reductions that most distribution connected generators currently receive. At present, cost reductions fall under three areas: Transmission generation residual payments, Balancing Services Use of System (BSUoS) charge payments and avoided BSUoS charges. Ofgem is considering retaining the avoided BSUoS charges but both other benefits are due to be abolished.

Review of use of system chargesFinally, Ofgem has also started a review into Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges. For TNUoS, this will specifically address the balance of costs between generation and demand, whereas the DUoS review will consider the balance between usage-based and capacity-based charges. This could result in a change to DUoS and TNUoS costs in future years.

take nine months for claims to be lodged and decided upon.

Ofgem is taking steps to try to prevent further domestic supplier collapses. Measures include more robust conditions for suppliers entering the market, with far more evidence needed around an understanding of the risks, as well as financial and operational resources, before a supply licence can be granted. However, it’s wise to allow for potential uplifts to transportation charges as any final claims remain unknown.

Capacity for changeThe auction-based Capacity Market was introduced to secure additional supply at an affordable price during periods when a raised risk of power shortage might be anticipated. But in November 2018, the European Court of Justice ruled that it broke state aid rules and its associated auctions and payments were, and remain, suspended.

The court ruled that that the European Commission (EC) had not carried out an adequate impact assessment of the Capacity Market, when making its decision to grant state aid approval for the scheme. A formal EC investigation is underway.

Ahead of the game

We operate in a complex market that continues to evolve as the UK strives to meet its ambitions in relation to energy stability, sustainability and affordability. In a financially turbulent and politically uncertain environment, small steps can make a big difference. It’s vital that businesses stay

informed, so that they can effectively budget for change. At Ørsted, our teams work hard to keep energy mangers informed of what lies ahead. You can read more about these changes and more in our regular industry updates. We also provide creative energy solutions, to help businesses weather the ups and downs of a changing energy market – and hopefully stay at the top of their game.

Capacity Market costs are recovered from end users via electricity bills, impacting business electricity costs. While waiting for an outcome, the UK Government has stated that it expects National Grid to continue to operate the Capacity Market as normal, but without payments to agreement holders. It has since confirmed an intention to hold a T-1 top-up auction this summer for delivery in 2019/20. Any agreements awarded will depend on the Capacity Market being reinstated following a favourable outcome from the EC’s investigation. This will determine the ongoing impact to business energy bills – so it’s a case of waiting for further updates.


ENERGY MANAGEMENT

Any agreements awarded will depend on the Capacity Market being reinstated following a favourable outcome from the EC’s investigation.

WATER SAVING


We all know we need to do more to slow the impacts of climate change and lower energy use. For years energy and carbon efficiency has been a priority over water reduction measures, particularly considering the substantial difference in the cost of these resources. But are we making the direct link between energy, water and carbon emissions? Specifically, how the supply of water directly contributes to greenhouse gases?

By using less water, less energy is needed to treat and pump it, which reduces carbon emissions. Lowering water waste reduces the amount of water that needs to be treated and that unnecessarily uses energy. Water that goes straight down the drain is not only a waste that is costly to businesses, it is costly to the environment.

At home, most people are in the habit of switching off lights, fitting energy-efficient bulbs and monitoring

electricity meters. But with so much energy production attributed to business and industry, it is vital that we all do what we can to meet the UK’s greenhouse gas emissions target of at least 80 per cent by 2050.

While things have started to change, with many businesses actively looking to reduce water consumption, more can be done to put water efficiency high on the agenda. Efforts to reduce wasted water can be counted towards carbon footprint reduction strategies; and making the water-energy-carbon link is so important and something that is often overlooked.

Prioritising efficiency efforts

A study in 2018 by energy consultancy, Carbon Credentials, estimated that just 10 per cent of UK

Are we making the water-energy-carbon link? When it comes to climate change and the risk of water scarcity in the UK, is it not time we focused on how water savings equal more than just pounds and pence? Sales and Marketing Director at Wave, Glenn Smith, looks at the bigger picture.

WATER SAVING


companies have a strategy for reducing carbon emissions. The survey was carried out with 1,000 business leaders with responsibility for sustainability or energy, as well as 1,000 company employees in different roles. The survey showed 46 per cent of companies had invited employees to come up with sustainable ideas, but few suggestions were carried out. The top five actions were: introducing office recycling bins; inviting sustainability ideas; putting up posters; sustainable procurement; and staff training and engagement.

With rising energy costs, sustainability managers are naturally focused on reducing energy consumption. However, the bigger picture involves reducing both water and energy use to lower carbon as well as costs. Making businesses more environmentally-friendly and cost conscious involves using water more efficiently and managing water waste more effectively. In turn, this reduces energy consumption and emissions as well as driving overall savings on utility bills.

Through monitoring and efficiency measures, there are simple and cost-effective methods for organisations of all sizes to save both water and money. Wave has worked with public and private sector businesses for many years to drive down consumption – some of which have managed to cut water use by 30-40 per cent resulting in significant energy and carbon reductions.

Winning hearts and minds

So how do businesses achieve more when it comes to driving efficiencies? Engaging with people on a personal level is a good place to start. Ensuring that environmental and carbon reduction strategies are successful not only needs buy-in “from the top”, but positive action throughout the business to change behaviours longer term.

Linking reduced water and energy use direct to lowering the UK’s carbon footprint should resonate with everyone. It impacts us all as individuals when it comes to climate change and its effects on our future water resources.

Climate change and water scarcity

In our lifetimes, water will become a scarcer commodity due to climate change and environmental damage. As climate change takes hold, water shortage events not typically associated with the British Isles could become more frequent and more intense.

Many people in the UK might think that the potential of drought is something only relevant to hotter, drier countries. However, the subject of water scarcity hit the headlines recently and highlighted that the problem is much closer to home than we realise.

According to a 2018 Environment Agency report, if we don’t increase water supply, reduce demand and

cut down on wastage, many areas will face significant water deficits by 2050, particularly in the South East. The Environment Agency recently warned that decreased rainfall, population growth, wastefulness and leaky pipes pose an “existential threat”.

And it’s not just England that could be affected. The misconception in Scotland is that the large volume of water in lochs and rivers means there will never be a water shortage.

However, this type of water is not easily accessible given the natural terrain, nor is it of a quality to be

used easily without extensive treatment. Furthermore, after the dry summer of 2018, the Scottish Environmental Protection Agency issued warnings of a high risk of water scarcity in Moray’s coastal catchments over summer 2019. There is also a medium risk of water scarcity for the east coast down to Edinburgh and the Lothians.

Hearing these warnings is certainly thought provoking and should help to change our perceptions and how we view and value water.

Think aheadIn this context, the high volume of water waste in the UK continues to become increasingly unacceptable. Right now, three billion litres of water

is lost every day. This is a third of the water taken from the natural environment and is enough to fill more than 1,000 Olympic-sized swimming pools – a truly concerning statistic.

By tackling unnecessary water use, all businesses can directly contribute to becoming more water, energy and carbon efficient. Coupled with the energy and carbon savings made from water conservation, now is the time to take the issue seriously and think ahead.

We all need to challenge ourselves to do our part to help tackle waste and become a more environmentally friendly society.

The survey showed 46 per cent of companies had invited employees to come up with sustainable ideas, but few suggestions were carried out.

Efforts to reduce wasted water can be counted towards carbon footprint reduction strategies.


ENERGY PROCUREMENT

Strategic energy software and management consultancy, ZTP, has launched a revolutionary platform – Kiveev. Kiveev addresses the situation where many domestic and international businesses buying high volumes of energy on flexible/monthly contracts, have no system in place to monitor and forecast their energy usage, analyse current market prices, forecast future prices or build in accurate risk calculations.

Kiveev has been designed to digitise the procurement and management of flexible power and gas contracts. It provides users with enhanced clarity of position, risk mitigation, time saving and budget control. It enables users to:• track and forecast consumption;• build and analyse budgets;• design trade strategies;• assess market conditions and price

forecasts;• calculate risk;• record trades and positions;• evaluate strategies; and• report on performance.

Because Kiveev constantly monitors the market, businesses energy managers can react quickly to market conditions and see immediately the impact of purchasing strategies. The Kiveev market dashboard enables the user to investigate price trends by providing:

• live commodities exchange and OTC price data;

• daily and weekly market insight commentary;

• total price transparency with built-in, non-commodity rate algorithms;

• a strategy builder and library that provides users with more control;

• a continuous monitor through live alerts; and

• updates on legislation to ensure users are aware of changes.

Managing Director of ZTP, Alex Hill, says Kiveev fulfils an increasingly important, but, as yet, unaddressed need for energy managers in many industry sectors.

“Based on our work and discussions with clients and contacts from multiple sectors including aggregates, construction, leisure manufacturing, real estate and retail, and other key industry stakeholders, we found that many had no system in place to monitor and forecast their energy usage, analyse current market prices or build in risk factors, which is a becoming a key issue and concern in this era of increased accountability. We therefore set out to build a solution that can help users to enhance significantly how they manage energy while maximising savings on their energy use and costs across their multi-site, mixed-use development portfolios,” Mr Hill explains.

He adds: “The ways we bank, order food and watch TV have all changed drastically in recent years, and it is now time for digitisation to change how the energy procurement and management process is delivered. Through collaboration with our clients and other industry contacts, ZTP has been able to develop the Kiveev platform which will transform the way flexible power and gas

contracts are managed by national and international business.

“Kiveev will deliver accurate, transparent and auditable information on budgeting, energy pricing and trading positions, while drawing on artificial intelligence-driven risk management tools to provide clarity on market opportunities.

“We are delighted to add this latest software solution, Kiveev, to our portfolio of energy management and procurement services. This new solution arrives at a time of increased energy market volatility, and will empower those responsible for energy management and procurement,” Mr Hill concludes.

To find out more about Kiveev or other ZTP energy management and procurement services please contact [email protected]

The finger on the procurement pulseEnergy management specialist, ZTP, introduces its digital energy procurement and management platform for major energy users.

ZTP is a strategic energy software and management consultancy based in London and Canterbury. Founded in 2012, ZTP brings together in-house expertise and the latest industry and technological innovations to deliver integrated systems and solutions for better energy management and procurement to significantly enhance the way multi-site businesses and organisations manage energy as well as maximising savings on energy use and costs. www.ztpuk.com


WATER EFFICIENCY

Using water more efficiently is a means for businesses to make savings in running costs. And there is growing attention on doing more to use water efficiently not only at work but also at home.

We work with organisations large and small and we’ve seen the difference water efficiency can make. We’re also working to highlight the benefits from using less water and we’ve partnered with the independent campaigning organisation, Waterwise, to boost this area further as well as innovation across the UK.

Savings in dataIn the past year we’ve shown one of our customers how it could cut its costs by almost £500,0001 by reducing its water use by 40 per cent across its 250-site portfolio. This was possible through monitoring water usage after analysing consumption data from previously installed data loggers and benchmarking against national industry standards for similar sector properties, as well as visually auditing sites to establish existing equipment performance.

The data in the online smart metering portal not only allows analysis of water use across multiple sites but also identifies significant, unexpected increases in water

usage. Those changes can quickly reveal costly issues such as a leak from a urinal that might otherwise go un-noticed.

Water-saving devices play a significant part in improving water efficiency. Examples include flush-savers in toilets, filters on taps and showers and waterless urinals, as well as using rainwater for toilets.

Flush savers can save 1.2 litres of water on every flush. One hotel group is looking to save around £52,000 a year2 after installing close to 8,000 of them in 2017. And last December it ordered a further 400.

Some larger changes may require an initial cost for your organisation but the savings from using less water and from lower bills soon pay you back.

Looking for leaks Locating and arranging repairs for leaks is another area where we’ve helped businesses of all sizes to make significant reductions in water costs by stopping water being wasted.

A leak on your site can also cause your water pressure to drop and can, in some cases, stop the flow of water at your site.

An unexpected increase in consumption revealed by water meter readings is usually a good indicator of an undetected leak

or burst pipe on site which may not be obvious. A burst pipe can lead to the loss of 1,000 litres an hour, which could cost as much as £26,000 a year, if left unchecked. If you have a number of water meters, then exploring data loggers and benchmarking analysis along with water site audits is worth considering further.

It’s important to check your water meter regularly so that you can build up a rough idea of how much water you typically use daily, per site in your organisation. It also gives you an indication of how much you may need if there was an unexpected interruption in your water supply.

Preparing for the unexpectedMany organisations simply aren’t aware of their responsibilities regarding the maintenance and repair of the water infrastructure within the boundaries of their premises from the point of the water meter.

Should you not have a preventative maintenance programme in place, you should, at the very minimum, develop a plan of action to fix any issues in the event of an interruption to your water supply.

If you think you have a leak and the wholesaler says there are no network supply issues, you’ll need to arrange a repair. If this is the case, it’s important that you and members of the facilities team know the location of stop-taps on your

sites, so they can be accessed quickly to stop the flow of water. In some cases, a drop in pressure could even be due to your stop-tap having been partially closed by accident – an easily-fixable issue you can solve without needing to contact your wholesaler.

You’ll also need a contingency plan in place for alternative water supplies for use during planned work on the network or if supply stops suddenly due to a burst pipe on site or on the wholesaler’s network.

For more information on the benefits from water efficiency for your organisation, email [email protected] or go to: www.water-plus.co.uk/watermanagement

1 Water Plus identified that if leaks were fixed and water-saving measures were implemented the organisation with a 250-site portfolio could benefit from a saving of almost £500,000.2 Based on six flushes of six litres a day per toilet.

Counting the ways to cut water costsKnowing how much water you use in your buildings is worth exploring further, whether you have one site or many, to help identify savings your organisation can make. Mark Taylor, Advanced Services Operations Manager with Water Plus, takes us through the benefits to be gained from more water monitoring and management on site.

One hotel group is looking to save around £52,000 a year1 after installing about 8,000 flush savers.


SERVICE

Corona Energy, a leading, independent commercial energy supplier, has provided enterprises of all sizes with tailored gas, electricity and green energy solutions for over 25 years. It handles complex multi-site portfolios and large business accounts, providing a range of fixed and flexible contracts – whatever’s right for the organisation. But supplying organisations with the service that suits their business best isn’t all that’s different about Corona Energy.

Right now, its team of 200 experts looks after over 15,000 customers, 85,000 meters and provides a personalised and responsive service for every client. Corona knows that different businesses have different requirements so its people listen, understand and adapt what they

offer to suit each organisation. Helping clients with everything from complex bids and pre-contractual arrangements, to onboarding and in-life management, Corona’s approach to commercial energy is very refreshing.Corona prides itself on providing an exceptional, tailored service. To deliver this day in, day out and change the face of commercial energy, it lives by four principles:

• put the customer first, • empower people, • be a forward-thinking provider and• keep energy simple. Those principles and the ambition behind them are clear in everything Corona does, from where it is based to the investments it makes in its people.

Providing service, defined by the customer – that’s what makes Corona unique. It delivers this by trusting every member of its team, giving them the power and freedom to make the right calls.

Empowering people at every level, encouraging everyone to work collaboratively, providing everybody with the necessary skills and training and dedicating itself to developing each company member are all contributors to Corona’s success.

Looking ahead to address the issues that are most important for tomorrow’s world, Corona has put sustainability high on its agenda. And it has taken addressing this issue way beyond offering clients green energy options. Corona has established its headquarters on the eco-friendly Croxley Park. Here it recycles all of its waste, is powered entirely by renewable energy and pursues a number of other environmentally friendly initiatives.

Corona Energy’s hope is that its simple, forward-thinking and empowering approach will make a difference to the way commercial energy works. It aims to lead the way, empowering people and powering businesses in an ever-more more positive way.

Making a difference

Corona Energy says it is different because its clients are all different. The company explains the principles behind its approach.

Croxley Park HQ: Corona has put sustainability high on its agenda.

Providing service, defined by the customer – that’s what makes Corona unique.

Watertight Utility Supportwave-utilities.co.uk/solutions

Forget short-term discounts and discover long-term solutions.We can monitor your water use and find ways to reduce it, making your business more efficient and sustainable.

Saving water is not only good for the environment, it’s good for your business’s bottom line. As well as lowering your bills, using less water means energy and carbon savings too.


INTERVIEW

A little over two years ago Hannah Drake left her job at an energy-trading firm to set up a new venture, EnergiMine. The ambition of her and her co-founders was to address what they perceived as a lack of innovation in the energy sector.

With a focus on the industrial and commercial market, Ms Drake says EnergiMine is bidding to make the energy markets more efficient by exploiting artificial intelligence (AI) and blockchain technology. It is, says Ms Drake, currently operating as a conventional energy manager and broker but it is on the cusp of launching added capabilities based on AI that will, she says, streamline the customer’s communications with EnergiMine.

Using advanced information technology, Ms Drake says EnergiMine will be able to reduce the time taken running billing audits for thousands of sites from hours to minutes. And it has a blockchain-based trading platform in the pipeline that will, Ms Drake says, enable clients to trade internally and with other users.

“A lot of the processes in energy are manual and take a lot of time,” Ms Drake explains. “We started EnergiMine to automate a lot of those processes and add AI. So customers can log onto a system and ask

any question they might normally ask an energy broker and have those answered by AI.

“2018 was all about building the tech and 2019 will be about delivering different modules throughout the year,” she says.

Ms Drake is charged with growing the company and managing all operational affairs.

The company is operating currently in eight countries with, it says, some 2,500 sites and 1.8TWh under management.

“I’ve always been client-facing in the consultancy business and I see almost everything that’s done for a customer is done on an Excel spreadsheet. I’ve even seen instances when suppliers have used Excel to bill customers in the UK,” says Ms Drake.

“If you look at the UK market we’re a lot further ahead than the rest of Europe. And from what I’ve seen there are a lot of portals out there that do some nice things but they don’t show much apart from just stored data and a dashboard for customers to see all of their information.”

EnergiMine is close to coming to market with an AI-based platform to replace conventional consultancies and “perform the functions of a traditional energy broker faster, more accurately and highlight unique insights, which improve efficiencies and lead to greater cost saving opportunities,” says Ms Drake. She walks through some of the functions of the system EnergiMine is poised to launch.

“The platform takes an email with invoices and contracts, it recognises the customer, validates the bill in minutes, and sends a report to the customer. That not only saves time but it cuts out the need for a team of analysts and a data entry person so it makes the process a lot leaner.”

She highlights retro auditing to illustrate the time, cost and error reductions the EnergiMine proposition brings. “A six-year retro audit would take normally about two months – going through all the suppliers’ data in all sorts of formats, a data entry person inputting all the bills and previous contracts and then going through every line item on a bill.” The EnergiMine system can, she says, “ take a two-month process and do it in a couple of minutes.”

She points out that clients don’t have all of the data – particularly with half-hourly data. “Suppliers often don’t send half hourly data direct. So we take a letter of authority from the customer and request that data from the supplier. Depending on the supplier or even where the supplier is sending it, it can be in any of various formats PDF, CSV, spreadsheets etc.”

And she explains how EnergiMine can provide energy managers with the full story when presenting costs to the board. “What we have found from end users is that when we’ve optimised the commodity price, we might have done a good job, but the price could be increased for various reasons such as rising non-commodity prices. All a finance director would see is that the cost has increased.

“So we use AI to drill down into exactly why the cost has increased so the energy manager can give that to the finance director.”

Ms Drake says EnergiMine has drawn heavily on consumer expectations in its planning and research for its platform. “Building our platform has involved lot of speaking to end users and asking what they want out of the platform because we tend find that a lot of (rival) companies build technology products without asking the end user what she needs. We looked at what brokers do

Drilling with megabits Manchester-based energy consultancy, EnergiMine, is ready to dig into energy markets in the UK and overseas with some powerful technology. Trevor Loveday talks to business co-founder, Hannah Drake.

Hannah Drake: EnergiMine can, she says, “take a two-month process and do it in a couple of minutes.”


INTERVIEW

and looked to replicate that model with technology and take away a lot of the manual processes with technology.”

B&UU was talking to EnergiMine as advances to its offering were nearing the end of the pipeline but were not yet in play. Meanwhile the company has been building its portfolio, while bringing on its technology “in the background.”

A feature that Ms Drake says promises to be particularly useful to multi-site clients with tenants spread geographically is anomaly detection. With the platform having access to all of a client’s half-hourly data, unexpected shifts in the consumption can give the client an early warning of tenants’ departure.

“We tend to find clients with tenants don’t necessarily find out that tenants have moved out until some months down the line. The client then has to do a change of tenancy which takes a few weeks because of the manual processes around it – form filling etc. The technology will continually monitor the data and when it detects an anomaly – say the base load drops – it will identify that and alert the client that a tenant may have moved out.”

She adds: “There are a lot of analytics around it too. A customer can interrogate it on its usage at given periods and look at a granular level to detect anomalies.”

EnergiMine has, Ms Drake says, placed an emphasis on international markets with operations in South Korea, Japan, The Netherlands, UK, US, Germany, France, Belgium and Luxembourg. “We do a lot of energy efficiency projects especially in Asia, where the market has just become deregulated,” she says. Two new overseas operations are shortly to be announced and the company has taken on its first member of staff outside the UK – in South Korea.

The company’s growth has, Ms Drake says, been fuelled solely by word of mouth until very recently: “We have had people come by recommendations – we didn’t really have a sales team until three months ago. So we’re very proud we’ve managed to get so many customers,” she says.

“We have a fantastic team. They all see the vision of the company and are all really excited about what we’re building here. We are a start up therefore we’re more nimble than many others it the market,” she adds.

In what is arguably a demonstration of that nimbleness, EnergiMine has, says Ms Drake, already launched its smart contract-based energy efficiency incentive scheme.

The system uses blockchain – the technology best know for its role in crypto currencies like Bitcoin. A blockchain is fundamentally a ledger recorded in electronic “blocks”, with each block representing a transaction. Every transaction added to the blockchain is linked to the one before it, making it highly resistant to fraudulent activity. These chains are often referred to as smart contracts.

EnergiMine’s blockchain offering – branded, EnergiToken – monitors energy use by each person in a company and rewards staff for hitting targets in energy efficiency that are bespoke to each client. The rewards come in the form of tokens that the staff can exchange for other services such as charging their electric car.

The system doesn’t stop at rewarding efficiency in the workplace; it pays out when people forego their petrol cars and take the tram. Or when they ride in on a bike. To do this transport companies and cycle monitoring apps and so on have to be linked to the EnergiMine system.

So a staff member can earn tokens by being efficient and low-carbon and then use her tokens to pay for other

efficient and low-carbon measures or even exchange it for conventional currency.

“The blockchain technology is constantly monitoring employee usage data. Once the target is reached, a smart contract distributes “EnergiTokens” to each individual in the organisation or involved in the project, who can then pay a power bill, or pay for public transport or cash it in.”

Ms Drake says EnergiMine is currently working with three local authorities in the UK on adopting the reward scheme but is unable yet to reveal which ones.

The emphasis is, she says, on behavioural change. Rather than being prescriptive about the means to reduce

energy or indeed the place to do it, EnergiMine is looking to coax people to change. “We are trialling to see if behavioural change does make a difference to the bottom line,” says Ms Drake. “So it’s all about behavioural change in the employees. We don’t go in and look at what light bulbs or air conditioning the company is using – instead of telling someone to turn the computer off, we incentivise them.”

The range of energy market possibilities anticipated by advocates of blockchain technology is broad and growing. One such item already on the horizon is peer-to-peer trading where consumers – businesses as well as households – trade surplus, on-site power through an online exchange. EnergiMine is looking into it with next year in mind.

Ms Drake says EnergiMine is already looking at the prospects for its blockchain platform in an industrial and commercial sector energy exchange. It is, she says, focusing initially on trading between businesses.

But while the focus is on business-to-business she sees business-to-consumer as an eventuality. But she points out that regulatory complexity might mean that realisation of business-to-consumer trading may take a few years. But ultimately she envisages EnergiMine’s system hooking into the so-called Internet of Things – the burgeoning network of smart devices in homes and workplaces. “We want to build our blockchain exchange so that every time a human or machine interacts with the energy markets, EnergiMine will be the enabling technology,” she declares.

And beyond the energy world – are there further opportunities for EnergiMine?

“Yes that is something we’ve discussed internally,” says Ms Drake. “There are so many angles and there are so many things we want to do but we are just trying to prioritise them in the right way. Right now though, we’re busy enough as it is.”

Customers can log onto a system and ask any question they might normally ask an energy broker and have those answered by AI.

EnergiMine has drawn heavily on user expectations in its planning and research for its platform.


RISK MANAGEMENT

Those tasked with managing energy in their organisation manage much more than consumption. Their responsibilities span markets, procurement, engineering, regulation, innovation and finance, and new issues or opportunities surface regularly.

Each of these areas adds uncertainty and risk to the portfolio you manage – but it’s not often easy to describe what kind of risk you are exposed to in any given situation. Risk means different things to different people. If you’re a risk manager, how you approach risk will often depend on what key stakeholders in your organisation think risk means.

For most people, the definition of risk is being exposed to danger, harm or loss. Managers on the other hand, don’t want surprises. Risk to them might be the chance of something unexpected happening that they have to explain to someone further up the hierarchy.

Then you have the academic and financial definition of risk which is a measure of volatility – a formulation of how far a situation can change from a central point. What this means for end users is best shown with numbers. Prices for NBP gas for the year starting April 2019 varied from a low of 30.27 pence per therm to a high of 69.83 pence per therm. That’s a difference of 130 per cent for the identical commodity and period. Prices are also extremely volatile, often moving up to 1.5 per cent per day. This means that you could see a price swing of 10 per cent either way in six weeks.

Decisions, decisionsIt’s extremely easy with the benefit of hindsight to look at a chart and pick out when you should have bought – at the lows in the market. However, when you’re actually in a position to buy, the decision is never that easy. What if you buy now and the price goes down? What if you hold off and the price goes up? Do you lock in at a higher price or hope that it comes off again? Anyone who has been in the market for a few years will have experienced the highs and lows of such decision making.

Speculators need markets to move up and down to give them the volatility that allows them to trade their way to a profit. But as a risk manager, your objectives are different. You’re trying to manage your position in line with objectives and targets you’ve set and that needs a different mindset.

Surfing provides a good simile. If you go out with a board and try to chase a wave, you’ll never get to it. Experienced surfers paddle out to where the waves form and wait for one to come.

So with markets, you decide how you will respond in different conditions, then, when the time comes, you execute your strategy rather than being driven by news and speculation.

Coping with complexityIn 2019 things are more complex for energy risk managers as the UK continues to move towards a decarbonised economy.

The changing generation mix is measurably affecting commodity prices while subsidies and taxes are distorting total costs. The benefits from flexibility, newer contract structures, energy efficiency options, storage technology and simpler power purchase agreements mean that there are more choices for energy managers. They are going from buying electricity to managing a commodity portfolio which needs a different approach to measuring, monitoring, reporting and responding to risk signals.

That requires making decisions – possibly lots of decisions – so it helps to have an overall framework within which you can make those decisions.

That framework or architecture has been in place for many years in the financial sector. For example, if you need to get finance for your business it’s normal to have several sources of money all of which have different rates, conditions and terms. The management team ensures that the organisation stays adequately funded by selecting from different options and rolling over or adding products as

needed, often with a long-term view on the continued success of the company. Yet in energy markets, we often take a narrow three-to-five-year view. This doesn’t make sense. We don’t expect to be out of business in that time, so why would someone who intends to be in business for the long term not create an energy portfolio management strategy that supports it over the long term and be competitive in a changing environment?

MEUC training daysMEUC’s training days in May and June are designed to address exactly these questions – and help energy risk managers develop and implement the energy portfolio management systems needed to keep their organisations competitive in a decarbonising world.

In these sessions you will learn:

• what a portfolio management system is;

• the kinds of options available;

• how to evaluate options for suitability;

• how to value those options; and

• what happens when you create a portfolio using a mix of options?

In addition, there are specific sessions on:

• strategies for open market purchases;

• how power purchase agreements work;

• how to value energy efficiency, self generation and storage;

• options for avoiding network charges and taxes;

• contractual structures designed for end-users rather than suppliers; and

• how to undertake a risk assessment audit for your organisation.

For further information on these training days go to www.meuc.co.uk

How to manage the new wave of energy portfoliosDecarbonisation has expanded the energy manager’s arsenal but it has added risk and intricacy to decision making. Ameresco’s Managing Director, Kath Chapman offers a way through the complexity.

Use a lot of water?We’ve shown a 200-site operation how they could cut their costs and reduce water use by 40% in the last year.

That’s a saving of almost £500,000

Get in touch to see how we can help you too. We help organisations whether they have 1 or many sites.

Find out more about saving water and lowering costs at: water-plus.co.uk/watermanagementOr email: [email protected] and include the word “MEUC” in your email.

Water Plus identified that if leaks were fixed and water-saving measures were implemented the organisation with a 200-site portfolio could benefit from a saving of almost £500,000.Savings can vary depending on portfolio type.

8683 WP BUU MEUC Ad A4_AW.indd 1 18/03/2019 16:56

24 B&UU SPRING 2019 Visit www.meuc.co.uk24 B&UU SPRING 2019 Visit www.meuc.co.uk

A report from the Scottish Affairs Committee has urged the UK Government to agree “an ambitious sector deal” to ensure that Scotland’s oil and gas industry could navigate the challenges of its future and continue to prosper.

Based on six evidence sessions with industry experts, stakeholders, environmental groups and Ministers, the report recommended that:

• the industry should focus on maximising economic recovery, to provide a domestic source of oil and gas;

• the Government should work with the sector to develop a decommissioning export strategy;

• the Government should ensure that the sector deal contained specific and measurable outcomes on increasing skills transfer to new sectors;

• the Government should outline how it would integrate a focus on underwater innovation to provide a strategy to support the export of technology and expertise;

• before the sector deal was finalised, the industry should come forward with a detailed proposal on how the new centre on transformational technology would limit the carbon footprint; and

The European Parliament, the Council and the European Commission have reached a provisional agreement on new rules for improving the function of the EU gas market and “strengthening solidarity” between member states.

The aim of the proposal was to improve the existing Gas Directive (2009/73/EC) and ensure that the principles of energy legislation (third-party access, tariff regulation, ownership unbundling and transparency) apply to all gas pipelines to and from third countries. (Presumably a UK no longer in the EU would become such a country.)

Exceptions are to be possible only under strict procedures in which the Commission plays a decisive role. The agreement ensures that the provisions of the Gas

• the Government and the Oil and Gas Authority should consider options for re-using oil and gas infrastructure for carbon capture and storage.

Committee Chair, Peter Wishart MP, said the industry was going through a period of immense change, commenting: “The Government needs to support the sector in exporting its skills and expertise around the world, and to transfer the sector’s leading engineering [skills] into other sectors”.

Meanwhile, in England, Cuadrilla Chief Executive, Francis Egan, took the

Directive are applied on EU territory (land and sea), and provides for effective oversight to ensure the application of EU internal market rules by the national authorities supervised by the Commission.

Following this provisional political agreement, the text of the Directive will now have to be approved by the European

over the past two years, driven by higher consumption, lower prices and falling domestic production.

Parliament and the Council. Meanwhile, a difficulty remains in the EU’s growing dependency on imported natural gas. The share of net gas imports as compared with the EU’s total gas consumption was 74.4 per cent in 2017. The biggest gas importer to the EU is Russia (42 per cent), followed by Norway (34 per cent), Algeria (10 per cent), and imported liquefied natural gas (14 per cent). Imports have increased

opportunity to once again argue the case for changing the seismicity rules so as to make it possible to exploit his company’s most recent discovery.

Having confirmed that Cuadrilla had found “a rich reservoir of recoverable high-quality natural gas”, more than 7,500 feet underground at its Preston New Road site in Lancashire, he asked that the shale industry be “treated fairly, with comparable seismic and

ground vibration levels to similar industries in Lancashire and elsewhere in the UK.”

He said those other industries were “able to work safely but more effectively with significantly higher thresholds for seismicity and ground vibration”. Energy Minister, Claire Perry, however, previously rejected his call for a change in the limits, and the Oil and Gas Authority previously said there were no plans to review them, so Cuadrilla shut the well, with the intention of monitoring build-up as it continued to assess the results.

Later, the company experienced another reverse when the Government rejected its application to explore at a second Lancashire site at Roseacre Wood.

A comment from Ms Perry that could give Mr Egan some hope of change about

acceptable levels of seismicity was: “We now have an independent regulator, the Oil & Gas Authority, and it is within its remit, should it wish, to look at the science [behind the seismicity issue]”. The OGA subsequently announced that it planned to carry out a scientific analysis of data gathered during fracking operations at Preston New Road, although it commented that this would not be a review of the “traffic light” system.

Scots seek to release pressure on gas

European Union internal market rules gas OK

The Government and the Oil and Gas Authority should consider options for re-using oil and gas infrastructure for carbon capture and storage.

The agreement… provides for effective oversight to ensure the application of EU internal market rules by the national authorities supervised by the Commission.

MEUC NEWS

RÉFÉRENCES COULEUR

24, rue Salomon de Rothschild - 92288 Suresnes - FRANCETél. : +33 (0)1 57 32 87 00 / Fax : +33 (0)1 57 32 87 87Web : www.carrenoir.com

ENGIElogotype_solid_WHITE14/04/2015

WHITE

Zone de protection 1



ENGIE works in partnership with customers to help them to optimise the efficiency of their buildings and operational processes. By integrating energy supply, efficiency, facilities management and business

support services, we can deliver guaranteed savings, combined with improved efficiency and sustainability.

www.engie.co.uk

Creatinggreat

sustainable business

environments

RÉFÉRENCES COULEUR

24, rue Salomon de Rothschild - 92288 Suresnes - FRANCETél. : +33 (0)1 57 32 87 00 / Fax : +33 (0)1 57 32 87 87Web : www.carrenoir.com

ENGIElogotype_solid_WHITE14/04/2015

WHITE





Digitising Energy Procurement

A revolutionary new platform for management of multiple flex energy contracts incorporating risk analysis and delivered cost.

Request a demo and see how Kiveev can transform the way you buy energy.

Build & Analyse Budgets

Assess Market Conditions

Live Market Pricing

Record Trades & Positions

Report on Performance

Energy Price Forecasts

Track & Forecast Consumption

Design Trade Strategies

Calculate Risk

Evaluate Strategies

02039576010 www.ztpuk.com [email protected]

MEUC NEWS

The rest of the sector now needs to meet this high standard so that customers across the country get better and more efficient services.

Strategic positionEnvironmental Co-ordinator with MEUC member, Wallwork Heat Treatment, Daniel Kenyon, has won a strategy competition on the Kiveev procurement and management software for flexible power and gas contracts. The competition was run by Kiveev producer, ZTP.

Mr Kenyon picked up the £250 prize for a strategy that delivered a 15 per cent reduction in costs compared to spot prices. He was presented with the award on 7 March at the MEUC’s Big Bash conference in London.

He has donated the prize money to Bury Hospice in Greater Manchester which provides care and support to local people with life-threatening illnesses and their families.

Mr Kenyon (centre) receiving his prize at the MEUC’s Big Bash from ZTP Managing Director, Alex Hill (left), and MEUC Chairman, Peter Roper.

Trio tops Ofwat business plan tableGiving its final assessment of the 2020-25 business plans of the seventeen water companies, the water regulator, Ofwat, has approved only three – those of Severn Trent Water, South West Water and United Utilities.

The plans from these three each set out how the company would cut bills by

up to £70 in real terms while “significantly improving” support for vulnerable customers. They each said they would also deliver “real change in the areas that mattered most to customers, like cutting leakage”. Ofwat Chief Executive, Rachel Fletcher, commented: “The rest

of the sector now needs to meet this high standard so that customers across the country get better and more efficient services”.

Four companies – Affinity Water, Hafren Dyfrdwy, Thames Water and Southern Water – had “the most work to do in order to meet the tough challenges”.

The Ofwat announcement included a note that across the board, water companies were proposing “significant improvements” for the period 2020-25. These included:• help for up to 1.5 million customers

struggling to pay their water bills; • a 15 per cent reduction in leakage – the

equivalent of more than 170 billion litres of water a year;

• cutting greenhouse gas emissions by 45 per cent – the equivalent of taking 360,000 cars off the road;

• a reduction of up to 80 per cent in pollution incidents; and

• at least £10 billion worth of extra investment to meet more stringent environmental standards, connect new homes and meet increased demand.

RWE acquisition of Eon generation gets Commission green light The European Commission announced its approval under the EU Merger Regulations for RWE’s acquisition of most of the renewable and nuclear electricity generation assets of Eon, having concluded that the transaction would raise no competition concerns in the European Economic Area.

Eon’s acquisition of RWE’s distribution and retail business is being assessed separately by the Commission, and is still under review.

The Germany-based companies are active across the whole electricity supply chain, from generation and wholesale to distribution and retail of electricity. Following this asset swap, RWE will be primarily active in upstream electricity generation and wholesale markets, while Eon will focus on the distribution and retail of electricity and gas.

RWE is also acquiring a 16.67 per cent minority interest in Eon as part payment for the assets it is selling in the context of the asset swap.

Digitising Energy Procurement

A revolutionary new platform for management of multiple flex energy contracts incorporating risk analysis and delivered cost.

Request a demo and see how Kiveev can transform the way you buy energy.

Build & Analyse Budgets

Assess Market Conditions

Live Market Pricing

Record Trades & Positions

Report on Performance

Energy Price Forecasts

Track & Forecast Consumption

Design Trade Strategies

Calculate Risk

Evaluate Strategies

02039576010 www.ztpuk.com [email protected]

Proud to support the MEUC membership in:• Understanding the opportunity• Securing the best deal for you• Reducing consumption• Understanding change and the steps you should take

For help, advice or to chat through issues, email [email protected] experienced Water Account Manager will call you back.

www.sesbusinesswater.co.uk

ahead of the curve - meuc … · ahead of the curve innovation and efficiency lead the way pages 20...

Documents