Following the carbon trail

Utilities need to take a more rigorous approach to monitoring and cutting their carbon footprints, and that means including their supply chains in the effort, says Tom Grand.

Utilities face a seemingly never ending stream of challenges, including regulation, ageing infrastructure and smart technologies. It’s perhaps not surprising, therefore, that some of them view carbon reduction as just the latest challenge rather than an opportunity to improve efficiency.

Even then, that has not stopped pressure building on firms to achieve more in terms of carbon reduction. In a recent survey, two-thirds (63 per cent) of large global utilities agreed that carbon reduction was going to be a bigger priority for their company this year.

Yet almost half (45 per cent) admitted they had no programme in place to monitor their carbon emissions and energy use.

Further, more than three-quarters (77 per cent) said they did not monitor the carbon emissions and energy use of their main suppliers, many of which would be involved with carbon and energy-intensive work such as building and maintaining infrastructure, travel to perform network maintenance, or decommissioning outdated power stations.

The market survey was commissioned by Achilles, which has the UK licence to run the certified emissions measurement and reduction scheme (Cemars). This allows companies to measure their greenhouse gas emissions, put in place reduction plans and gain independent certifications. Achilles also operates UVDB, the pre-qualification and verification scheme used by most UK utilities, which includes fundamental questions on suppliers’ approach to carbon.

The survey was conducted by independent research company IFF, which interviewed supply chain professionals from 65 large utility companies from the UK, Spain, the Nordic region, Brazil and the US.

These results come as many large utilities are required to track their energy use under Esos (the energy savings opportunity scheme), the UK’s response to an EU agreement to cut emissions by 20 per cent by 2020. The legislation came into effect at the beginning of 2015 and requires all companies to audit energy use, identify a cost-effective energy savings scheme and notify the Environment Agency by 5 December.

So what are the barriers companies face to reducing emissions? It is no secret that monitoring emissions properly can be a time and labour-intensive exercise, but there are now serious drivers in place to do so.

David Riley is carbon manager at Anglian Water, and a member of various industry groups aimed at tackling carbon emissions such as the Water UK Carbon Working Group, where he is chair.

Commenting on the findings of the Achilles survey, he says: “The good news is that the survey showed a high percentage of firms clearly understood the need and benefits of carbon reduction.”

Recent figures show Anglian Water is advanced in its carbon reduction journey, due to having a dedicated carbon reduction programme within the organisation and among its main suppliers. Riley’s team scrutinised the entire carbon cycle, including emissions from capital projects, processes and outcomes such as manufacture and transportation, and everyday operations.

Over the past five years the company has delivered significant reductions in operational carbon and met its challenging embodied carbon goal of halving emissions in assets it built in 2015 from a 2010 baseline.

As part of this, the company joined Cemars to benchmark, monitor and reduce the company’s operational emissions, and those of its suppliers. By Riley’s estimation, the scheme has been vital in overseeing a further carbon reduction of 111,000 tonnes by encouraging suppliers to follow the same process.

It is not just the scheme that achieves results like this, however, and Riley advocates three key factors for success in reducing carbon: leadership; procurement; and innovation.

“The first step is leadership,” he says. The board, investors and directors must create the vision to release the value of low carbon solutions. There has to be a clear business driver that if carbon is reduced, then costs, bills and inefficiencies will also be reduced.

The second strand is procurement, and part of Anglian Water’s success is that it asked suppliers to help to deliver carbon reductions and made this part of the procurement process. The company set proper targets and challenged the supply chain.

Riley says: “It is absolutely vital to get the supply chain involved. As a standalone organisation you can achieve a lot, but when you engage the supply chain you achieve much more significant reductions.

The third key factor is innovation, and in Anglian’s case it started looking at emissions from “extracting raw materials, transportation, fabrication and construction of infrastructure assets, as well as the operational carbon to run it all”.

Anglian Water has shown that the way to achieve maximum results is to lead by example – first implementing a programme to benchmark, monitor and reduce emissions in-house and then to ask suppliers to follow in their footsteps.

A credible programme with thorough auditing is  not easy, but fully committed firms will recognise that it takes effort to achieve long-term, sustainable and tangible results which benefit everyone – the business, its bottom line and ultimately the environment.

Tom Grand, regional director, UK & Ireland, Achilles