Category Archives: Climate Change

Business need for reduced costs drives Cleantech demand

By David Bicknell

New research from audit specialist Grant Thornton has highlighted the change drivers behind the growing demand for cleantech products to reduce business costs.

Grant Thornton’s third annual International Business Report (IBR) report on the global cleantech industry shows that in general the adoption of cleantech products and practices is motivated by the commercial need to reduce costs and increase profits. It is no longer about being ‘green’.

For example, despite short-term fluctuations, the trend for key commodity prices continues upwards for example, Brent Crude oil recently rose back above US$120 a barrel. The outlook for nuclear energy is unclear following the Fukushima disaster – Germany, for example, has opted for the renewables route – and partly due to this uncertainty, cleantech is emerging as a suitable alternative source of energy or a means of reducing  consumption of expensive resources.

Over half of the business practitioners surveyed for the IBR who choose cleantech options do so to reduce their costs (52%); with 45% making the choice as a way to increase profitability. Corporate social responsibility (CSR) requirements and environmental concerns also remain important, but are not the main reason for adoption.

This increasing maturity of the sector is filtering through to expectations of cleantech business for the year ahead creating a bullish outlook for 2012.

Compared with companies in other sectors, the Grant Thornton report suggests that privately held businesses in the cleantech sector are now among the most confident enterprises in the world when it comes to future prosperity, far outpacing the optimism found in most global industries – and with good reason.

64% of cleantech businesses interviewed expect revenue to increase this year, up from 54% the previous year. 64% of respondents also expect higher profitability this year compared to 42% in 2011.  Cleantech providers currently see the greatest demand from the developed economies of Europe (51%), and US and Canada (39%).

Nathan Goode, head of energy, environment and sustainability at Grant Thornton UK said: “Interest in cleantech is no longer just about environmental concerns, it’s about whether it offers solutions that can boost the financial performance of companies. What we’re seeing is the potential for these technologies to compete with traditional forms of energy and the expectation that over time, they should.

“Governmental support remains key in many sectors and jurisdictions for cleantech to be successful, and fluctuations in this support are causing short term volatility for the cleantech arena. The mood of optimism in the sector appears to be driven by fundamental trends and reflected in broader indicators such as oil prices.

“Cleantech is a sector on the road to commercialisation but it is not necessarily all the way there yet. We’re at a stage now where the value proposition for cleantech is to save money and consequently demand for cleantech is set to increase meaning we could be on the cusp of something very big indeed.”

Cleantech and IT

The Grant Thornton report demonstrates how the cleantech sector is in transition. There are more companies involved in R&D (42%) and IT (29%) than in previous years (31% and 22% respectively).

Goode said: “Judging by this analysis, cleantech appears to have parallels with the biotech industry in that R&D is being used to explore new concepts and applications for existing technologies. As a result, R&D and IT is receiving greater focus as companies exploit advances in areas such as storage and smart grid technologies. In addition, the sector is adopting a broader base on which to apply its learning, putting greater focus on areas such as waste and water.”

In contrast, manufacturing activity has become relatively more subdued. The number of businesses citing involvement in manufacturing of energy efficient products has decreased over the past year from 26% in the 2012 survey to 19% in 2011, although manufacturing of products for cleantech energy generation has increased marginally to 17%, up from 14% the previous year.

There could be a number of reasons for this, but the Grant Thornton report stresses that the issue of capital constraint represents a big challenge for the sector and as a result, governments.

Goode added: “Manufacturing items such as wind turbines and waste processing plants is an incredibly capital intensive business.  However, what we’re seeing is a slowing in the pace of growth as a result of constraints on raising capital.  This continues to be an issue, especially in European economies where credit is constrained.

“Governments must be mindful of acting as a brake on investment, as it will quickly become a barrier to achieving carbon reduction targets and the desire to supply businesses and households with alternative supplies of energy – and at a time when it’s really starting to compete.”

Winds of energy change blow through Germany and China

By David Bicknell

Change in government priorities and policies can drive structural change that generates significant investment and growth. That is now particularly the case in energy production projects in the aftermath of the Fukushima disaster.

From this article on Business Green, it appears that Germany  is set for a significant investment in wind power with the setting up of a number of offshore wind farms with new hydroelectric power plants in the offing too.

German energy companies and investors are ready to plough up to €60bn into overhauling the country’s power infrastructure, following the government’s pledge to phase out nuclear reactors.

The energy and water industry association BDEW issued a report on the first day of the Hanover industrial fair revealing that plans are underway to build or modernise 84 power stations with a combined capacity of 42GW.

As Business Green says, the report also provides one of the most detailed insights to date on how the German energy sector plans to cope with the government’s commitment to phase out nuclear capacity in the country post-Fukushima.

Another recent article shows that China is making similar investments in wind energy, spending the equivalent of £4bn in the North-Western Gansu region.

As Jonathan Watts reports, “Wind turbines, which were almost unknown five years ago, stretch into the distance, competing only with far mountains and new pylons for space on the horizon. Jiuquan alone now has the capacity to generate 6GW of wind energy – roughly equivalent to that of the whole UK. The plan is to more than triple that by 2015, when this area could become the biggest wind farm in the world.

“Although it is the world’s biggest CO2 emitter and notorious for building the equivalent of a 400MW coal-fired power station every three days, it is also erecting 36 wind turbines a day and building a robust new electricity grid to send this power thousands of miles across the country from the deserts of the west to the cities of the east.

“It is part of a long-term plan to supply 15 per cent of the country’s energy from renewable sources by 2020. Most of that will come from nuclear and hydropower, but the government is also tapping the wind and solar potential of the deserts, mountain plateaus and coastlines.”

Meanwhile, Britain could pump £13bn into the economy and create up to 10,000 jobs by upgrading its power distribution network with smart grid technology, according to a Reuters report.

The technology has the potential to transform the way electricity is generated, distributed and consumed just as the Internet transformed the way the world communicates.

The idea is to create a communication network to maximise efficiency in supply and demand and to cut costs for homes and businesses.

Related Reading

UK smart grid could create jobs, help economy

Government to invest £1bn in carbon capture and storage technology

By David Bicknell

The government is to commit more than £1bn of public funds to develop carbon capture and storage (CCS) technology with the prospect of generating an industry with 100,000 jobs.

It follows  the publication of plans yesterday to create a government-sponsored competition to design the first workable demonstration project.

CCS uses technology to capture carbon dioxide from power plants and store it permanently underground. Such a move, it is said, will help meet climate change targets.

The government has also published the first UK CCS Roadmap which it says sets out the steps that the Government is taking to develop a new world-leading CCS industry in the 2020s. The Roadmap includes:

  • The competition, the ‘CCS Commercialisation Programme’, to drive down costs by supporting practical experience in the design, construction and operation of commercial scale CCS with £1bn capital funding, and additional support, subject to affordability, through low carbon Contracts for Difference;
  • £125m funding for Research and Development, including a new £13m UK CCS Research Centre;
  • Planned long term Contracts for Difference through Electricity Market Reforms to drive investment in commercial scale CCS in the 2020s and beyond;
  • Commitments to working with industry to address other important areas including developing skills and the supply chain, storage and assisting the development of CCS infrastructure

Here is the Guardian’s view on the story

UK CCS Commercialisation Programmme

Department of Energy & Climate Change announces new consultation on CRC

By David Bicknell

In a press release today, the Department of Energy & Climate Change has announced a consultation on simplifying the Carbon Reduction Commitment (CRC) Energy Efficiency scheme.

DECC says that participants will see their administrative costs cut by almost two-thirds, equating to around £330 million of savings up to 2030.

CRC is a mandatory UK-wide trading  scheme covering large business and public sector organisation, who produce 12% of UK carbon emissions. It requires businesses to report on and pay a tax on energy used, and ranks businesses in a performance league table which provides a further reputational incentive to improve their energy efficiency.

Following Chancellor George Osborne’s criticism of the scheme’s complexity in last week’s Budget, DECC now says businesses will now have the opportunity to comment on Government’s proposals. 

The simplified package proposed is aimed at retaining the energy-saving and reputational benefits of the CRC, whilst reducing the bureaucracy of taking part.

Secretary of State Ed Davey said:

“We have listened to businesses’ concerns about the CRC and have set out proposals to radically cut down on ‘red tape’ to save businesses money. The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency”.

DECC says the simplified package will include:

  • A shortening of the CRC qualification process.
  • Reducing the number of fuels covered by CRC from 29 to 4.
  • Reducing the amount of reporting required by businesses.
  • Reducing the length of time participants will have to keep records.
  • Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances. 
  • Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
  • Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance.

The formal consultation will run for twelve weeks, with the Government planning to amend the legislation for CRC by April 2013.

Consultation on a simplified CRC Energy Efficiency Scheme

Osborne’s Budget signals possible end of Carbon Reduction Commitment energy scheme

By David Bicknell

George Osborne’s Budget earlier today has raised significant question marks over the future of the Carbon Reduction Commitment (CRC) energy efficiency scheme.

Osborne said this, “Environmentally sustainable has to be fiscally sustainable too. The Carbon Reduction Commitment was established by the previous Government. It is cumbersome, bureaucratic and imposes unnecessary cost on business. So we will seek major savings in the administrative cost of the Commitment for business. If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.”

It will be interesting to know how those ‘major savings’ in the administrative cost might be achieved. That sounds like a softening up for the end of CRC to me.

Related Links

The Guardian: Green ‘stealth tax’ attacked by business groups

How a Dutch SME is helping make software energy efficient

By David Bicknell

It may take a little time, but in the future organisations will be able to track the energy efficiency of their software and know how much it is costing them to run.

It follows an idea developed by a Dutch SME that specialises in the quality of software. Amsterdam-based Software Improvement Group (SIG) has partnered with the nearby Hogeschool van Amsterdam (Amsterdam University of Applied Sciences)  to create the Software Energy Footprint Lab (SEFLab).

SEFLab is now setting out to establish how the quality of organisations’ software code affects their energy consumption. The work will couple SIG’s knowledge and expertise in software monitoring  with the enthusiasm and technical expertise of the local university students.

Campaign4Change asked Dr Joost Visser, SIG’s Head of Research how it is going about tackling the energy efficiency of software, and what elements of the problem it needs to examine.

Joost Visser: There are basically two types of this problem that you can break this down and look into. One is across the software lifecycle. So just as with software defects where the later you find them the more expensive they are, so with energy efficiency, if you try to optimise your software once it’s already in production, you may have to make an explicit investment that might not provide an adequate payback. But if you already know what requirements you need to keep in mind at the design stage for energy efficiency, then, for example, you might actually choose a different communication protocol which can improve your efficiency. At each of the development process, there are things to do: in requirements, in the coding and in the testing.

Another issue is the hierarchical level of software. The thing you might see as the consumer is the application. But actually that’s not the first level that impacts energy efficiency. The first level is the user themselves. In a car, the person that is actually touching the accelerator has a lot of influence on how much fuel you would use. To reduce your fuel usage, you may need to change your (driving) behaviour. The same thing applies with users of software. If they know what the consequences are of clicking here and searching there, they might behave slightly differently and it might have an impact on energy efficiency. If you give people feedback, they will behave differently.

C4C: What sort of user feedback have you had?

JV: We did a survey around 9 months ago where we asked a lot of users about these types of things and the overwhelming conclusion of that survey was that, ‘Yes, we would like to change our behaviour but at the moment we have nothing to go on. We don’t know how to make that change.’

There is a premium on green products. People want to be green – but they have to be able to make a meaningful choice. There are various elements to consider. First there is the application layer. Then we have the various components from which the software application is built: a database; a runtime environment framework, and Java as a virtual machine. Then underneath there’s the operating system. Microsoft has made a big effort in its operating system to take energy efficiency into account but I think there are many more steps to be made there. Then there is communication. You have to think about your mobile device uses radio to communicate when you’re browsing. You may have to make an explicit switch to a Wi-Fi network which might be more energy efficient. Is it more energy efficient than 3G? We don’t know yet. That is one of the things we’re going to find out.

C4C: One of the areas that many organisations are talking about is the impact of consumerisation and the use of touch devices creating a new user interface that organisations’ applications will have to be rewritten for. What does than mean from an energy efficiency perspective?

JV: One of the very very real challenges now is that we want to go to those new devices with mobile strategies but time to market dictates how we think about energy efficiency. So you might choose to do develop once on different devices but on many devices, there’s no accounting for the energy consumption. You might go to HTML5, for instance, but it might consume much more energy than when you create a native application. I think by making the choices visible, we will enable people to choose. We will take away the time-to-market issue and people will be able to say,’ OK, we can have this a couple of weeks later and still make things provably more energy efficient’, which consumers will appreciate.

C4C: Will we get to a stage where the consumer will think about the energy efficiency, or are they really only going to be thinking about the coolness of the product i.e. I want an iPad and I don’t really care what the energy efficiency is?

JV: Let’s be realistic about this. Consumers want to get hold of new things. They’re right – they’re consumers. So the coolness of the device has to incorporate the energy efficiency. It’s a lifestyle product. If you offer that, they’ll want it.

C4C: But in the corporate world previously, the IT department would buy the product. Now the user, the consumer, is buying the product and he or she wants a cool devices and they don’t really know about the energy efficiency side of things.

JV: If you compare it to other types of products, fridges, for instance, suppliers do compete on energy efficiency. They all want to be rated A, and that’s partly to do with regulation and partly to do with the demands of the customer. But an essential thing to make that work is that there is a measurement, a consumable rating, that’s meaningful. And now with software, we are developing the science behind it.

Is it about green hardware? Or is it using an energy efficient battery? Or just using a bigger battery? It gives you as a consumer the incentive to use it.  There is also the recycling of the batteries to be taken into account, of course.

C4C: Going back to the way the user is using the software. If you take the car analogy, ultimately there is a cost for you if you’re not driving efficiently. How do we portray those costs in terms of energy efficiency of software?

JV: Maybe you should get feedback about your consumption, not in terms of the litre of fuel you used, but in terms of euros. You want to make that last step. Similarly in software there is a lot of knowledge about CPU cycles and megabytes. But in the end you want to know what is the calorific value of what you’re doing. And that has to be put into some perspective.

C4C: If you were to take it to the nth degree, would you be able to get an idea of how much electricity or energy you had used in your browsing session?

JV: If you keep all your tabs open, do you as a user know if that has any impact, or is that negligible? If you knew it was consuming energy, maybe you’d take the trouble of closing them because it has value for you. Energy consumption goes further than simply your own device. If you’re browsing, you’re pulling information in, and the server starts doing things for you and data starts being generated. It might be stored, consuming energy, for the next 50 years. And it makes a difference how it gets archived or stored. All of this has to be made simple for the consumer to comprehend. Then there’s the organisational side, those organisations that have bespoke software built for them.

They might be interested in ‘green’ from the idealistic point of view. Their clients are interested too and they want to be socially responsible. But those organisations are also very much interested in the cost aspect. Energy costs are rising and it’s not just costs, but scarcity too. If more work implies more energy, at some point you may not be able to get it as easily as before. Either you will get it back in higher energy costs or it just won’t be there.

C4C: Is there any way you can create a benchmark or figure that talks about how much inefficient software usage can cost?

JV: Not yet. For data centre efficiency, there is the PUE. It has lots of drawbacks as well. But is has had a good impact and made choices more clear. We are working on it. We have some development of KPIs. But it’s hard. There’s a real research challenge here. One reason is the mapping of software applications to hardware. It’s not one to one. We may have one software application running on many pieces of hardware and due to virtualisation and other techniques, we have many applications running on the same hardware. With the hardware you can map how much energy goes through it. But how do you map that to the consumer of the energy i.e. the software? That’s a very difficult puzzle.

Another thing is that we’d all like to have a benchmark. To have a benchmark, you need comparable things. But think about it. You have online payments for a bank versus using a browser. The type of work you do with the software, the user transactions, so to speak, is completely different.  If one consumes a certain amount of energy and the other consumes double that, what does that mean? Does that mean the one that consumes more is worse? Not necessarily. It may simply be doing more work. So we have to develop KPIs that allow meaningful comparison. One suggestion is to how much energy per function point. That sounds good, but actually it’s completely wrong, because a function point is about functional size and how many features you offer.  Yet it doesn’t have anything about the workload in it. You have to involve the workload into the KPI otherwise it cannot work.

Now workload is something that’s completely different between different vendors and operations systems and end users. Comparing an operating system to an end user application will not work. That’s why we’re trying to build these up through the lab.

C4C: You could end up having two years of discussions between vendors over what would be an appropriate standard for energy efficient software, couldn’t you?

JV: The way to make these protracted processes shorter is to have people with lots of initiative who just go for it in their own sphere of influence, and show that it can be done, and create a reality that others can follow. International standardisation processes take a long time, but you shouldn’t wait for it. You should go for it.


Software Energy Footprint Lab

8 ways to make your software more energy efficient

IT and Climate Change: out of sight, but not out of mind?

By David Bicknell

There isn’t a much bigger example of fundamental change than climate change. And there aren’t any bigger examples of breaking down the barriers to change than trying to get some meaningful action to cut greenhouse gas emissions. At a time of economic autumn, there is a risk of climate change and sustainability heading down the business/government ‘must-do’ pecking order.

So it’s good that the United Nations conference on Climate Change has come round this week to concentrate minds. This year, it’s in South Africa, in Durban.

I liked this blog written by Colin Curtis, director of sustainability at Dimemsion Data, who sums up some of the issues and discusses how the company’s own IT department has performed in reducing the organisation’s carbon footprint, notably through virtualisation.

I suspect with the travails of the Euro, we may hear less about the UN conference this week than we did a couple of years ago in Copenhagen. But out of sight needn’t mean out of mind.

Environment Agency publishes Carbon Reduction Commitment league table

By David Bicknell

The Environment Agency has published the initial league table for the Carbon Reduction Commmitment (CRC) Energy Efficiency scheme.

As the Agency puts it, the Performance League Table (PLT) ranks organisations participating in the CRC on how well they manage their energy efficiency. PLT positions are based on a participant’s changes in energy use against a baseline and not their total emissions. As a result the PLT should motivate organisations to improve their energy efficiency.

The 2010/11 PLT recognises those organisations who have already taken action to monitor and reduce their carbon emissions and is based on information supplied by participating organisations.

The Agency’s website is already under pressure from the number of hits on the site, but the table is available as an Excel file here

CRC (Carbon Reduction Commitment) league table now expected in November

By David Bicknell

It seems that the league table associated with the Carbon Reduction Commitment (CRC) energy efficiency scheme is now expected to be published in November.

This blog post on Local Energy suggests that a November date is expected. That could mean the table will be out next week or alternatively,  it may still be a month away.

Local Energy quoted Carl Sweeney the Operations Manager of the CRC Energy Efficiency Scheme at the Environment Agency, saying:

“At this time, we anticipate that the PLT will be published in November. We have agreed with DECC that we will notify participants of the publication date one week before release. There is much ongoing work in the background to review and produce the PLT as accurate as possible, so at this stage I can’t be more specific as something unexpected could delay us.”

Third parties familiar with the situation say that the Environment Agency is getting ‘a lot of calls’ on when the table will be published. 

What does the league table mean? The Carbon Trust, a not-for-profit company that provides specialist support to help business and the public sector cut carbon emissions, puts it like this:

“A publicly available CRC performance league table will show how each participant is performing compared to others in the scheme. If your organisation is a good carbon performer, the league table will help give a significant boost to your organisation’s reputation, demonstrating its success in cutting emissions. Please note, however, that because of the changes announced in October 2010, there is likely to be no direct financial benefit under the CRC from an improved position in the league table.Your organisation’s league table position each year will be determined by performance in three metrics:

  • Early action metric: 50% of your score is based on what percentage of your organisation’s electricity and gas supplies is covered by voluntary automatic meter readings (AMR) in the year to 31 March 2011. The other half is based on the proportion of your CRC emissions certified under the Carbon Trust Standard or an equivalent scheme. Visit to find out about achieving the Carbon Trust Standard.
  • Absolute metric: The percentage change in your organisation’s emissions, compared to the average of the previous five years (or number of years available until 2014/15).
  • Growth metric: the percentage change in emissions per unit turnover, compared to the average of the previous five years (or number of years available until 2014/15).

The weighting of these three metrics will change over time. In the first year, early action will count for 100% of your organisation’s league table score. Over the first few years of the scheme, the early action metric will gradually fade in importance until the absolute and growth metrics receive 75% and 25% weightings respectively in 2014/15 and thereafter.

As the Carbon Trust points out, if an organisation is a good carbon performer, the league table will boost its reputation, though there will be no direct financial benefit under the CRC from an improved position in the league table.

However, when the results come out, you can well imagine a few marketing departments either keen to trumpet their organisation’s performance or, conversely, trying to shore up their company’s ‘green’ reputation.

See later story: Environment Agency publishes CRC league table

Why the public sector must stop buying printers

In the first in a series of Campaign4Change guest insights, Tracey Rawling Church, Director of Brand and Reputation at Kyocera Mita UK explains what steps the public sector needs to take to transform its procurement of printers and make its ITTs more cost efficient and low-carbon friendly

To cut its costs and carbon emissions, the public sector should stop buying printers. That may seem a ridiculous statement, coming from an imaging company executive, but actually there’s a serious point here. Most ITTs are written around a notional product – calling for a certain number of machines of a certain specification. And the tender process is quite rigid, so companies invited to tender are forced to propose a solution that fits the criteria in the ITT.

But in many organisations, the number of devices has crept up over time and device to user ratios are unnecessarily high – so replacing machines on a one-for-one basis only perpetuates a system that has become bloated and inefficient.

Sometimes the decision is made to consolidate devices, replacing desktop printers with shared multifunctional devices and an ITT is written on that basis, but to achieve real efficiencies that could reduce costs by typically 30% and carbon by as much as half, a detailed print audit should be undertaken to determine precisely what hardware is needed at which locations to support business processes.

However, even this approach misses the opportunity to obtain a solution that is properly optimised not just at the point of implementation, but into the future.

In the private sector, there is a growing trend towards managed document services, a holistic approach that encompasses every aspect of the printing and imaging needs of an organisation.

A managed document service project begins with a detailed audit of both the machines currently in place and the document flows through and within the organisation. Then a solution is designed that aims to reduce reliance on hard copy by combining document management software with a fleet of machines that have exactly the right functionality to support the document flow.

In most cases, this results in a much smaller number of devices, usually with more extensive functionality than those they replace. A bespoke service contract is crafted that includes remote monitoring of device states, service support to agreed service levels and detailed reporting of device use that can be segmented and analysed in a myriad of ways. And using the business intelligence gained from the reporting suite, the service can be continuously optimised to ensure it remains efficient, accommodating changes in the organisation over time.

For example, the managed document solution provided for insurance giant RSA has reduced paper consumption by 21% in just one year – despite the fact that their product depends on having a printed certificate. And energy consumed by imaging devices has been reduced by 55% with resulting savings in both electricity costs and CRC levies.

As you can imagine, this type of service doesn’t fit easily into a device-centric ITT. So vendors who know they could save cash and carbon through applying a managed document service are forced to respond with a ’round peg, square hole’ solution that is less than ideal, simply because the tender process focuses on products rather than outcomes.

Concerns about carbon emissions and resource scarcity are driving the evolution of innovative business models that overturn conventional norms and challenge the status quo. But unless procurement processes keep pace with these changes, the benefits of this fresh thinking won’t be realised.

To really drive through change, let’s have ITTs written by commercial managers and procurement departments that focus on objectives and targets rather than feeds and speeds. Throw down a challenge to reduce paper consumption by x, cut energy use by y% and drive down costs by z and see what the industry comes up with. I guarantee it will deliver solutions that are more resource efficient, productive and economical.


MDS in the public sector
RSA case study
For more information on the full results of the latest independent research into printing attitudes and behaviour,  email Tracey Rawling Church: