Every journey starts with a single step. We have to help businesses to take that step if we are going to get to net zero in time, and we might not get another chance as good as this, writes Alex Rathmell, managing director for consultancy at EnergyPro
Since mid 2019 we've been helping Low Carbon Hub and Oxford Brookes University establish Energy Solutions Oxfordshire (or ESOx), a new venture that is working with SMEs in Oxfordshire to develop and implement energy efficiency and clean energy projects. The idea was to create a business model that can tackle all the well-known barriers to these projects, then put it in the hands of a great team who can figure out how best to sell them in to local businesses.
So far this has worked extremely well. ESOx have been able to build a pipeline of projects - mostly LED lighting upgrades, heating system upgrades, insulation and rooftop PV - by working with community energy groups at a town or district level to influence local businesses and spread the word, and also by drawing on long-established relationships with businesses and business networks. Our role has been to create the underlying platform - called ESCO-in-a-box - that provides a clear pathway for developing, financing and implementing projects, but ESOx themselves have managed marketing, communications and business development, with striking success.
However, the unavoidable elephant in the room - the elephant in most rooms - is of course Covid-19. A measure of just how disruptive Covid has been for businesses is that it has reduced Brexit to a footnote (except for seafood companies, of which Oxfordshire has very few, largely for geographical reasons). It's a truism that small and medium companies are 'core business focused' to the exclusion of almost everything else, and Covid has deepened this to a kind of 'survival focus' for a great many.
We will never know for certain how the Oxfordshire pilot would have gone if we hadn't spent the last 12 months lurching from lockdown to tiers to lockdown, but here's what I think: I think it would have been harder.
Don't get me wrong, now that ESOx is moving into the project delivery phase it is a struggle to get final decisions and arrange on-site works, and this phase has been pushed back further by the current lockdown. Covid is an international tragedy, a national catastrophe (and disgrace, frankly) and an unbearable intrusion on millions of lives. But because of this cataclysmic effect, it seems to be causing profound emotional responses. For businesses this manifests as 'survival mode', but remarkably this doesn't seem to mean you put your head down and wait out the storm, it means you lift your head up and look for help. So without Covid I think it would have been harder to get businesses to pay attention to Oxfordshire's new 'one-stop-shop', which after all is a team of people who are trying to provide support.
Over the last few months the #NetZeroSME 'discovery phase' led by the Broadway Initiative has been researching SMEs' attitudes to net zero and have concluded something similar. This project is bringing together business groups (such as the Federation of Small Businesses and the British Chambers of Commerce), the energy networks and the Institute of Environmental Management and Assessment (IEMA) to establish a national net zero advice service for small businesses. Their discovery research found that: "SMEs care, they are aware of the issue, they need help. A trusted service that is expert, comprehensive, helpful, accessible, findable and kind would be warmly received."
"Kind" is the word that jumps out here. What an extraordinary finding, but obvious when you think about it. Businesses are craving a hand to hold through these difficult times. I think ESOx has been able to tap into this, explaining its success so far in engaging SMEs.
ESOx is carefully positioned as an expert service that deals professionally with the complexities of an energy project on behalf of a business. It is unashamedly project-focused, pushing the conversation quickly towards the point when the client starts realising cost savings and business benefits. It has the backing of the county, city and district councils, the LEP, and the technical credibility of Low Carbon Hub and Oxford Brookes' teams, all of which gives a client confidence that it can be trusted.
But the way it does all that is supportive, patient, informal, local and yes, 'kind'. For example, it is now helping its clients showcase their successful projects through the Energy Pioneer scheme, so they can communicate to customers, owners and staff how they are moving forward on these issues. This is based on a realisation that visibility is a major way to create extra value from clean energy projects, and also a way to encourage other businesses - neighbours, competitors, supplier and customers - to follow suit. And a business can obtain greater profile by increasing the ambition of their energy decarbonisation through subsequent initiatives.
I think this notion of kindness and supportiveness has major implications for the way we approach the transition to net zero. Having declared 'Climate Emergencies' and committed to net zero targets, each region of the country is about to start asking businesses to shoulder a responsibility that is arguably even larger than the burden they have been carrying during the Covid and Brexit crises: reduce and decarbonise or offset your energy use. Net zero is simply not possible without businesses taking this action. Are we seriously just going to instruct them to do it, on top of everything else? Give them a target, maybe an app, and expect them just to get on with it?
ESOx's current projects will get a client part, not all of the way to net zero. They are focused on relatively simple measures that offer a strong business case in today's economic environment. But crucially, they are establishing trust, a peer group of like-minded businesses with common challenges, and the means to drive more ambitious action over time.
In short, what we're realising is that this isn't just about projects, it's about relationships. Energy efficiency's 'low hanging fruit' is a way to get companies to engage, provided it is positioned using the right language, the right channels and with sensitivity to the ongoing business crisis. From there, the decade's real work begins: a journey to net zero with experts on hand to navigate the inevitable complexities.
The solution relies on local, expert facilitation, and it requires investment. However making the investment now means that the first wave of clients will be businesses that have been pounded by Covid, looking for support as they recover. This could be the perfect moment to help them while establishing the relationship that will see them all the way to net zero, and creating local demand for low carbon services.
There is a fundamental role in this for the public sector. While the business engagement itself can be done by new ESCOs such as ESOx, backing from local authorities will be essential for credibility, trustworthiness and consistent funding. And eventually all these disparate projects will need to be coordinated if they are to form a meaningful contribution to a local energy plan. Net zero will mean very widespread rooftop PV, new solutions for heating buildings and industrial processes, and inevitable challenges for local distribution systems. It will be essential to have an engaged community of businesses - some of the main consumers and producers of energy in any region - to realise these visions for local smart energy systems.
That way the daunting road to a decarbonised energy system can be broken down into a series of manageable steps, each of which will make sense to a business if it is explained and facilitated properly. The business sector has been through a lot, and it needs this patient support if it is to take on yet another potentially existential challenge. In return, businesses will do much of the heavy lifting to get us to net zero, and will be better for it.
Alex Rathmell is managing director, consultancy, at EnergyPro Ltd, and EPConnect programme lead.
Information regarding our first Community ESCO, Energy Solutions Oxfordshire can be found at: www.energysolutionsoxfordshire.org.
We are now forming partnerships with other organisations to roll out ESCO-in-a-box across the country, to find out more please go to: www.epconnect.energy
The ESCO-in-a-box launch Webinar -'The Climate Emergency: How to make SMEs part of the solution' - is on Wednesday 3 March at 12pm. To join us please register HERE.
The development and piloting of ESCO-in-a-box is funded by the Department of Business, Energy and Industrial Strategy (BEIS) through the 'Boosting Access for SMEs to Energy Efficiency' (BASEE) programme. EnergyPro Ltd is working in partnership with Low Carbon Hub and Oxford Brookes University on this project. More details on the BASEE programme can be found here.
This article was sponsored by EnergyPro ltd.
