The built environment currently contributes 40 per cent of the country’s total carbon footprint. Many organisations, including EMCOR UK, have set themselves a net zero target by 2030. As well as our internal commitments, our position as an FM company means we are able to help numerous customers hit their own net zero targets.
Kam Singh is director of carbon solutions at EMCOR UK and has vast experience in public and private sector energy strategy. In this blog, he shares the trends to look out for in 2024.
Strategic energy price risk management
Energy prices have elevated due to recent global events. In fact, this volatility may be the new normal and we might not see a return to the previous pre-pandemic energy prices.
If this is the case, average energy prices will remain more expensive going forward, forcing organisations to relook at the way they procure energy. This change would ensure that companies manage energy price risks similarly to other business risks, developing rolling three-year reviews of their energy market positions.
On the plus side, this could encourage more businesses to take a much more strategic approach to energy management. If done right, projects off the back of detailed studies of energy profiles could reduce the shock of price increases and also allow for potential on-site renewable energy generation, to ultimately reduce emissions.
Carbon offset schemes
Organisations have multiple schemes available from third party organisations that promise to reduce their carbon emissions. However, their legitimacy is increasingly being called into question.
For example, Renewable Energy Guarantees of Origin (REGOs) may be a renowned net zero certification, but they have been accused of over-allocation against the actual amount of REGO backed electricity available in the market. Organisations are therefore likely to become more wary of REGOs, or they run the risk of greenwashing.
Proof that organisations’ actions are genuine is becoming more pertinent. Corporations are increasingly looking at long-term strategies due to many having 1st January 2030 as a net zero deadline, making 2024 a key milestone for a five-year project cycle.
I therefore expect that simple certification will no longer be enough. As companies move to longer-term energy pricing and procurement plans, the improved legitimacy of their net-zero claims will require credible and certified carbon offset schemes as well as Power Purchase Agreements (PPAs).
In contrast to vague statements and print-out certificates, PPAs establish proof of direct collaboration between renewable energy providers and companies. For example, a business could demonstrate that it receives 30 per cent of its renewable energy from a specific wind farm.
Furthermore, these schemes don’t require yearly renewals like REGOs, but offer multi-year contracts. In turn, this provides a longer-term, financially stable, and authentic solution to cross-organisational carbon offset schemes.
Scope one, two and three emissions
For many organisations, scope two emissions have been an obvious focus as they can produce clear, internal, data-driven targets. For example, electricity reduction schemes in buildings have advanced rapidly in recent years, resulting in better temperature, light, humidity, and CO2 detection sensors, to predict and monitor emissions.
However, scope one emissions are increasingly being prioritised through the decarbonisation of heat and fleet operations. These can, of course, also be much harder to control. For example, traditional vehicle fleets produce significant emissions, but these are not easy to sustainably phase out.
The introduction of electric vehicle (EV) fleets is the way forward. These require thorough planning to fully implement. I predict that organisations will prioritise EV fleets in coming years, which will require more detailed, spend-based analyses to effectively roll out.
We will start to see schemes where companies pay to have EV charging points installed outside the homes of their employees, with an agreement in place for who pays for charging costs.
However, scope three supply chain emissions will require the most attention. Emissions across global supply chains will need collaboration and open communication to be comprehensively addressed. There is power in numbers, too: if more corporations require supplier sustainability to meet their upcoming net zero targets, the more likely they will be to internally address these goals.
Larger corporations who rely on smaller suppliers can support them by providing more education and support. This could involve collaborations with software providers who can accurately measure emissions and develop reduction schemes. This method allows for organisations and their wider supply chains to journey on the path to net zero together.
Smart building development
There are many on-the-ground solutions for organisations to implement. Thankfully in the UK, there have been half-hourly metered electricity supplies for all sites with a demand exceeding 100 KW for around thirty years. This allows businesses to review their daily profiles, which informs their decisions on energy efficiency.
However, I expect that technological solutions will become even more popular as we transition to a more advanced level of data management that provides intelligent insights into the operation of individual assets.
Rather than simply replacing appliances like boilers or chillers at the end of their life cycle, the integration of AI monitoring software and IoT solutions allows us to make much more informed decisions about the optimal maintenance and replacement regimes.
Predictive technology can be applied to an asset level to monitor individual items of plant, which can assess when buildings require maintenance before they need it. For example, vibration sensors can be fitted to pumps and motors that can flag when it is likely to fail before it does, allowing for a pre-emptive fix and thus avoiding any business disruption.
Data collection is critical with office occupancy fluctuating so much. The National Office for Statistics found that 44 per cent of UK workers report at-home or hybrid work, meaning that buildings no longer require regular five-day operation at full capacity. Smart systems therefore need to respond to constantly changing usage patterns.
Sensors can send information to the building controls to, for example, detect CO2 levels in the building. This can in turn indicate the building occupancy, meaning systems can be adjusted accordingly.
We should be striving to maximise the collation of data from as many systems as possible across the estate, so that we can make truly strategic decisions on energy and space use.
I’d like to see generic sustainability frameworks left in the past, with organisations refocusing onto Environmental, Social and Governance (ESG) frameworks. Within these areas, businesses can identify specific metrics that allow for data-driven improvement plans across all organisational areas.
This will also allow easier alignment with the European Sustainability Reporting Standards (ESRS) for companies subject to the new Corporate Sustainability Reporting Directive (CSRD) requirements. The CSRD requires any company listed and operating within EU regulated markets to meet its EU sustainability reporting standards. Organisations that operate globally will therefore need ESG frameworks to ensure that their reporting is accurate.
Plenty to do in 2024
These trends will pose multiple challenges for organisations – or they could be viewed as opportunities. The need for data-driven insight, reporting, and more legitimate forms of decarbonisation will help ensure organisations make meaningful progress towards their net zero goals.
To learn more about EMCOR UK’s sustainability initiatives, read our sustainability report.