Beyond net zero: Future-proofing infrastructure investment for large energy consumers

For manufacturers and industrial companies navigating their path to a decarbonised future, many businesses have successfully implemented energy efficiency projects which quickly save both cash and carbon emissions. The deeper decarbonisation efforts required for the UK's 2050 net zero future however require substantial investments, and when making the case for these interventions it's imperative to adopt a holistic view of the benefits beyond zero carbon to support the organisation's long-term profitability and competitive advantage.

From my experience working with industrial energy customers, there are several critical considerations.

Energy independence and price stability

In the wake of geopolitical tensions and the ongoing cost of living crisis, energy security and price stability have surged to the front of corporate concerns. Infrastructure decarbonisation projects must integrate these risks.

The integration of on-site renewables such as solar PV are a great way of reducing reliance on the national grid. For instance, Southern Water has implemented solar PV systems that significantly reduce dependence on the grid while also cutting carbon emissions by over 2.6 million kilograms annually. This is a trend evidenced in research by The Solar Power Portal which noted a spike in solar planning applications in 2022, at the peak of wholesale gas prices, as companies sought more secure energy sources.

Companies should also consider the best integration of green technologies to suit their bespoke needs - a leading example of this is the heat network at Swaffham Prior village in Cambridge, which has enabled a significant number of residents to transition from traditional fuel-oil to a greener energy system. The innovative renewable heat network integrates ground source and air source heat pump technology and aims to deliver 100 per cent of the thermal energy demand of the village through renewable energy. Along with a dedicated large-scale solar farm to power the energy centre with reliable, low carbon electricity, the pioneering scheme will not only reduce carbon emissions and improve air quality for residents but also help shape the net zero market. A long-term finance model has been developed to enable price stability, ensuring the heat network will be no more costly to residents than fuel oil alternatives.

Long-term cost reduction and innovation

Organisations should also consider the long-term cost benefits of upgrading energy systems, as well as opportunities for strategic advantage by committing to innovation and leadership in renewable technologies. For example, Leeds City Council has installed over 5,000 solar PV panels on buildings across the city, supporting its commitment to decarbonisation by 2030 whilst also saving the city approximately £4.6m on electricity over the first 25-years.

Similarly at Keele University, which was one of the first universities in the UK to declare a climate emergency, the use of solar PV is powering around half of the campus' requirements while also supporting the university's leading research into Smart Energy Networks.

Not only do solar PV systems produce affordable electricity but due to their modularity are a versatile technology which can be deployed within a range of spaces. The installations have a long lifespan (many of our recent projects have a 40-year design life) with relatively low maintenance and upgrade costs, making them a sound long-term investment.

Companies may also be able to benefit from available grants to further support the financial case for improvement projects, such as the Industrial Energy Transformation Fund (IETF). The scheme provides vital funding to help manufacturing organisations to decarbonise and the next competition window is expected later in 2024.

Future climate risks

Finally, climate change adaptation is becoming an increasingly important topic when planning energy infrastructure projects. It's evident that in the coming decades, climate change will result in increasingly extreme weather patterns. Companies must plan for operations in a world potentially exceeding 3°C of warming and this foresight should be integrated into plant replacement projects and capital works. For example, evaluating whether a plant room will be more susceptible to flooding due to heavier rainfall, or how facilities will perform in dealing with more frequent and extreme heatwaves. At Equans, we are committed to guiding customers through these challenges, ensuring their operations are resilient to future climate impacts.

Maximising project value

Once the case for energy upgrades is made, there are real opportunities to integrate environmental, social and governance (ESG) considerations into the project delivery to create greater value. Throughout our solar farm construction projects we have deployed low carbon plant such as battery optimised generators, solar powered welfare cabins and green hydrogen powered lighting and CCTV columns. Projects should also emphasise value engineering while promoting biodiversity, sustainable logistics and the circular economy.

Energy projects should also factor in sustainable procurement by using ethically sourced, high-quality materials and by supporting communities employing local and SME businesses within supply chains to boost local economies.

Given the complexities and bespoke requirements of energy infrastructure schemes, forming a strategic partnership with a specialist provider is crucial. A reputable EPC (engineering, procurement and construction) company should have extensive experience in executing large-scale projects across the UK and possess the financial resilience to guarantee performance outcomes and withstand market fluctuations, such as supply chain cost variations. The partner should understand customer needs deeply, combining industry expertise with the flexibility to deliver high quality projects without disrupting business-as-usual operations.

To navigate the journey towards decarbonisation, organisations should adopt a multifaceted approach that goes beyond net zero. This approach should incorporate energy security, efficiency, climate resilience, and ESG considerations. It is important to recognise that our commitment to ESG and its integration into our design and delivery processes is particularly significant to many of our customers. This commitment is rapidly becoming a regulatory requirement rather than an option. This is especially true for customers who are listed funds, dedicated to the principles of responsible investment and adhering to the sustainable finance disclosure regulations.

By leveraging these insights and establishing strategic partnerships, large energy consumers can ensure their infrastructure investments are robust, future-ready, and value-driven.

This article originally featured in Business Green.