What’s stopping cost-cutting net zero projects getting off the ground?

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    What’s stopping cost-cutting net zero projects getting off the ground?

    The economics of decarbonisation are more compelling than ever.

    Solar panels, electric transport, and energy efficiency projects offer an effective defence for local authorities, public sector bodies, and companies to shield themselves against soaring and volatile energy prices. And there is money available for organisations with serious plans to decarbonise their estates and operations, with investors and the public increasingly interested in investing their money in projects that boast green credentials as well as attractive returns.  

    But this does not mean delivering decarbonisation projects is always smooth sailing for organisations. Money may be available, but it is not always easy to access. Meanwhile, green skills shortages and a lack of climate literacy within organisations can make emissions saving schemes face numerous internal barriers.

    These were some of the themes touched upon in a webinar hosted late last week by BusinessGreen in partnership with Equans, which brought together leaders from the private and public sector to discuss the challenges of delivering net zero strategies.

    The panellists agreed that all organisations – whether they were publicly funded or privately-owned – had major economic incentives to wean their operations, fleets and estates off expensive fossil fuels.

    “Opportunities [that were] not valuable four years ago are now worth exploring – the economics have changed,” said Gregory Allouis, energy solutions director at Bouygues Energies & Services, the energy management and services giant that acquired Equans late last year. “Expensive fossil fuel energy does help the decarbonising agenda, in both the private and public sphere.”

    The shifting economics are playing out in the changing way sustainability teams discuss and pitch projects internally, reflected Bob Gordon, director of the Zero Carbon Forum, a coalition of hospitality firms committed to meeting climate goals.

    “We’re moving away from the language of doing the right thing, and more towards the language of building a better business – whether that’s reducing operational costs, whether that’s enhancing your brand, building your resilience to longer-term risks and exposure to climate risks,” he said. “Sustainability teams are having to change the narrative. I don’t think that’s necessarily slowing us, but it is just changing the way that we are approaching it.”

    As a case in point, Kate Vandenburg of London event venue the Business Design Centre noted that shifting the historic venues’ lighting to energy efficient LEDs had led to major cost savings. “For a building of our size, it had an incredible impact on the amount of electricity we use,” she said.

    But of course, decarbonising a venue takes more than changing lightbulbs, effective as such projects are. Fresh from swapping out gas hobs for induction hubs in its kitchen, next on the retrofitting hitlist for the historic Islington building is the decarbonisation of its heating system – a proposition that will be significantly more invasive to its day-to-day operations given the logistics involved. Vanderburg admitted the project will take time to plan and schedule.

    Indeed, a number of barriers are holding back decarbonisation projects within firms and public organisations, especially once the “low hanging fruit” projects with a rapid return on investment are picked off. Among the challenges highlighted by the experts were skills shortages, organisational culture, technical issues, or – in the case of Essex County Council – the way funding is handed out by central government.

    “Having to compete for funding is very resource intensive and takes a long-time,” said Councillor Peter Schwier, adding that government grants for retrofitting buildings come with conditions around timing of delivery that are frequently incompatible with on the ground realities. “I’d like to see longer funding so we can make greater longer time changes to the benefit of our residents, green skills and infrastructure across Essex.”

    Devolution of power to local authorities on transport would also help the council deliver on both its decarbonisation agenda and its plans to boost rates of active travel, Shweir said. “It would give us greater control over how we go about getting a better service and a longer consistent service and we can alter it – depending on the budget – and make it an agile service for the benefit of everybody wants to use it,” he added.

    The availability of trained people able to design, develop, and deliver decarbonisation projects was also singled out by panellists as an on-going challenge. “It is a big concern to absolutely everybody, regardless of whether you are a local authority or industry generally,” Shweir said.

    However, work is underway across the economy to tackle looming green skills shortages, with larger firms playing an increasingly proactive role in partnering with government and smaller businesses to boosting sustainability skills training. Allouis said Bouyges Energies & Services has invested heavily in skills development for years and is committed to continuing to do so, recognising the need for increasing numbers of trained professionals to help deliver the net zero transition. “It is nothing new,” he said. “We’ve been doing this for decades, training people to use new technologies, new equipment.”

    Overall, however, panellists remained upbeat about their organisation or sector’s ability to hit emissions targets, pointing to the rapid pace clean technology innovation, the increasingly robust economics of decarbonisation, and growing public understanding of climate issues.

    Allouis stressed that regardless of tough economic headwinds there is no shortage of investment interested in enabling climate solutions: “There is money available to finance these projects – that’s my take,” he said. “Of course, it is easier for a large organisation or public organisation to get access to external funds – that’s a fact. It’s more difficult for a small private business to get access to affordable money, especially lately. But it is available.

    “There are a lot of investors and members of the public who want their savings, their money to be invested in something that is meaningful, something that is good for society and their families.”  

    Clearly, there is work to do across the economy to ensure these funds can be delivered to those public and private sector organisations that want to accelerate their decarbonisation efforts. But if those barriers to accessing such finance can be addressed, then the technologies are available that can deliver both deep emissions reductions and significant long term cost savings. 

    You can watch BusinessGreen’s webinar in association with Equans here.