Tag Archives: energy

Business need for reduced costs drives Cleantech demand

Posted on 26/04/2012 | Leave a comment

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.”

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Posted in Campaign4Change, change management, cleantech, Climate Change, cost reduction, CSR, energy change, energy efficiency, environmental, Green IT, greentech, sustainability

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Letter to No 10 opens up energy prices and climate change policy discussion

Posted on 06/09/2011 | Leave a comment

By David Bicknell

It seems as if with the party conference season not far off, discussions are taking place around the edge of government over energy policy, which may have some implications down the line as far as business energy costs and climate change legislation are concerned.

It follows a leak to the Daily Telegraph of a note to David Cameron  discussing the impact of energy and climate change policies on energy prices, Although the focus of the letter is on consumer energy prices, it is possible that a wider review may also need to examine the effect of government policies in the form of climate change legislation on businesses.

The letter suggests that four policies stand out as having the most significant impact on household energy bills: carbon pricing (both the carbon price floor and the EU emissions trading scheme), the new Energy Company Obligation, the Electricity Market Reform package and the Renewables Obligation.

The letter goes on to ask whether policies can be opened up, particularly support for relatively high-cost technologies such as offshore wind, in a way that minimises cost and disruption to investment.

It’s possible that, as the Guardian suggests, the leaked letter is part of a sabre-rattling exercise ahead of the conference season. On the other hand, with consumers strapped for cash, energy prices on an ever upwards spiral, and businesses struggling in a stagnant economy, a healthy debate over energy policy is  perhaps not a bad idea, though, as the Guardian headline puts it, that risks pitting fossil fuels against renewable energy.

There is some more background to the story here:

http://www.businessgreen.com/bg/james-blog/2106683/10s-criticism-decc-lacks-credibility-energy-ideas

http://www.guardian.co.uk/environment/damian-carrington-blog/2011/sep/05/greenpolitics-energy

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Posted in Campaign4Change, Climate Change, environmental, greentech, sustainability

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Greenpeace report challenges the Cloud industry on the environment

Posted on 27/04/2011 | Leave a comment

By David Bicknell

Interesting report from Greenpeace on what it describes as “the energy choices that power Cloud Computing.”

“How dirty is your data?” is claimed by Greenpeace to the first ever report on the energy choices made by IT companies including Akamai, Amazon.com (Amazon Web Services), Apple, Facebook, Google, HP, IBM, Microsoft, Twitter, and Yahoo, and it says, highlights the need for greater transparency from global IT brands on the energy and carbon footprint of their Internet infrastructure.

In its highlights from the report, Greenpeace suggests:

• The $1 Billion (USD) Apple iData Center in North Carolina, expected to open this spring, will consume as much as 100 MW of electricity, equivalent to the electricity usage of approximately 80,000 homes in the U.S. or over a quarter million in the E.U.. The surrounding energy grid has less than 5 percent clean energy, with the remaining 95 percent coming from dirty, dangerous sources like coal and nuclear.
• Both Yahoo! and Google seem to understand the importance of a renewable energy supply, with Yahoo! siting most of its data centres near sources of renewable energy, and Google is directly signing power purchasing agreements for renewable energy and investing in solar and wind energy projects in many US states as well as Germany. Their models should be employed and improved upon by other Internet (“cloud computing”) companies.
• Facebook, one of the fastest growing and most popular destinations on the web, is unfortunately on track to be the most dependent cloud computing companies on coal powered electricity with over 53 percent of its facilities estimated to rely on coal to power the Facebook cloud.

In its executive summary, Greenpeace says: “Information Technology (IT) is disruptive. Largely for the better, IT has disrupted the way we travel, communicate, conduct business, produce, socialise and manage our homes and lives. This disruptive ability has the potential to reduce our dependence on dirty energy and make society cleaner, more efficient and powered renewably. But as we applaud the positive, visible impacts and measurable, game-changing potential of IT, we also need to pay attention to what’s behind the curtain.

“The ‘Cloud’ is IT’s biggest innovation and disruption. Cloud computing is converting our work, finances, health and relationships into invisible data, centralised in out-of-the-way storage facilities or data centres. This report seeks to answer an important question about this trend, currently underway across the globe: As Cloud technology disrupts our lives in many positive ways, are the companies that are changing everything failing to address their own growing environmental footprint?”

Key learnings from the report are that:

•Data centres to house the explosion of virtual information
currently consume 1.5-2% of all global electricity; this is growing
at a rate of 12% a year.

•The IT industry points to cloud computing as the new, green
model for our IT infrastructure needs, but few companies provide
data that would allow us to objectively evaluate these claims.

•The technologies of the 21st century are still largely powered by
the dirty coal power of the past, with over half of the companies
rated herein relying on coal for between 50% and 80% of their
energy needs.

•IT innovations have the potential to cut greenhouse gas
emissions across all sectors of the economy, but IT’s own
growing demand for dirty energy remains largely unaddressed by
the world’s biggest IT brands.

•There is a lack of transparency across the industry about IT’s own
greenhouse gas footprint and a need to open up the books on its
energy footprint.

•In emerging markets, where there is limited reliable grid electricity,
there is a tremendous opportunity for telecom operators to show
leadership by investing in renewable energy, but many are relying
on heavily polluting diesel generators to fuel their growth.

•Data centre clusters (Google, Facebook, Apple) are cropping up
in places like North Carolina and the US Midwest, where cheap
and dirty coal-powered electricity is abundant.

•IT companies are failing to prioritise access to clean and
renewable energy in their infrastructure siting decisions.

•Of the 10 brands graded, Akamai, a global content distribution
network, earned top-of-the-class recognition for transparency;
Yahoo! had the strongest infrastructure siting policy; Google &
IBM demonstrated the most comprehensive overall approach to
reduce its carbon footprint to date.

•Across the board, IT companies have thus far failed to commit to
clean energy in the same way they are embracing energy
efficiency, which is holding the sector back from being truly
green

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Low-carbon energy is a key theme of research council’s 2011-2015 delivery plan

Posted on 27/12/2010 | Leave a comment

By David Bicknell

With 2010 drawing to a close, it’s a good time to look ahead to the prospects for Green IT and low-carbon technologies in 2011. In many cases, beyond 2011, because plans for the adoption of low-carbon and Green IT technologies necessarily have to look towards the medium and long-term to be successful.

With that in mind, I was intrigued by the publication a few days before Christmas of the Engineering and Physical Sciences Research Council’s (EPSRC) delivery plan for 2015.

The Engineering and Physical Sciences research Council (EPSRC) is the UK’s main agency for funding research in engineering and physical sciences, investing in research and postgraduate training to help handle the next generation of technological change.

According to EPSRC’s CEO, Professor Dave Delpy, the ‘ambitious’ delivery plan with programmes in sustainable manufacturing, low-carbon energy, healthcare and digital technologies ‘will help rebuild the UK economy and meet the challenges of the 21st century.’

The EPSRC plan is based on four main themes: Manufacturing the Future, Energy, the Digital Economy, and Healthcare Technologies.

Of these, the proposals under the Energy theme look particularly interesting:

* Accelerate the deployment of alternative energy technologies, working with TSB, ETI and others on joint challenges in offshore renewables, bioenergy, carbon capture and storage and eco-efficient technologies.

* Work with the Low Carbon Innovation Group to target technologies with the potential to meet the UK’s CO2 reduction targets.

* Maximise the relevance of our portfolio and accelerate the route to impact by exploiting our partnerships with over 500 public and private sector organisations.

* Pursue high-risk, high-return speculative research to define future energy options – for example, the UK Fusion Programme and Grand Challenges such as next generation renewables and transport.

* Exploit our major links with China, India and the US, enabling leading researchers to address global energy challenges together.

* Support research on the social, environmental, economic and technical implications of energy research in order to understand future energy options.

* Train and develop new researchers, policymakers and business leaders in order to build UK capacity and vision of the whole energy innovation landscape.

Inevitably for organisations like EPSRC, collaborations with Government Departments are critical and EPSRC has links with over 10 government departments. In addition to contributing to policy development in areas such as climate change, transport and nuclear power, it has a high-profile collaboration with Department for Transport on sustainable transport; it is supporting a jointly-funded Natural and Environmental Risk Centre with Defra18; and it is working with the MoD on projects such as the generation of electricity from human movement that will make soldiers ‘battery-free’.

In this Delivery Plan period, EPSRC expects to build, or maintain, strong relationships with key departments both to provide advice and share information on future research priorities; create routes for timely policy advice to ministers and provide policymakers with better access to our current portfolio; and combine resources to create strategic programmes attracting business leverage while securing multiplier effects for public funding.

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