Sustainability initiatives and emissions reduction targets are often bold and time-stamped, serving to put an organization’s metaphorical rear – and reputation – on the line. While this makes for catchy headlines, it also pressurizes the already-challenging endeavor of pulling off a major energy transformation.
While it may seem surprising to set a major goal without a plan of how to achieve it, it’s actually purposeful. Committing to the result, but not the mechanism, gives companies freedom to design an energy transformation plan that matches existing assets, organizational goals and budget, and industry regulations with the latest clean energy technology. Emissions reduction plans are certainly not one-size-fits-all.
Where to Begin
When Sustainability, Operational or Facility Leaders are charged with creating the sustainability roadmap, they usually say getting started is the most difficult part. Most of them know onsite energy is an important option to consider, but they may be unsure of why or how to know if it’s a fit for their sites and organizational goals. If you are such a leader, this article is for you. We will address some of the first questions you should ask (and answer) when considering onsite energy as part of a sustainability initiative.
- Why onsite energy for emission reductions?
- Why should I develop an onsite energy system vs buying carbon credits?
- How do I know if onsite energy is viable for the company?
- How does onsite energy contribute to an emission reduction plan?
Why Onsite Energy for Emission Reductions?
Onsite energy is one of the best and most practical ways for businesses to achieve power supply reliability, net Co2 reduction and cost savings.
Technologies such as wind, solar, energy storage, and even traditional gas generation technologies can be optimally deployed onsite to help companies meet sustainability targets. There are myriad configurations of onsite energy technologies, which allows it to be a diverse and agile solution for most businesses.
Onsite energy can also benefit the environment by reducing the electricity that must be generated at centralized power plants that use coal and other fossil fuels.
Onsite Energy System vs. Buying Carbon Credits: Which One?
If your organization’s goal is “going green,” the advantage of clean onsite energy creation over purchasing carbon credits, carbon offsets or renewable energy credits (RECs) is that you’re making a direct impact on your property towards decreasing emissions. Installing clean onsite energy resources is additional work as you’re constructing a project that wouldn’t otherwise happen. It’s also real as you can directly measure the environmental impact your onsite energy generation will have for its entire useful life.
Furthermore, buying carbon credits is expensive. Transferring your sustainability targets to another party through investment vehicles that return a real and measurable Co2 reduction is often more costly per unit than reducing Co2 using onsite energy. The opportunity cost of investing in renewable energy credits can be high compared to other environmental investments. The avoided cost of a ton of Co2 can range from around $40 to $500.
In short, investing in carbon offsets or buying carbon credits with the goal of Co2 reduction can come at a higher cost and a lower positive environmental impact.
Is Onsite Energy Viable for the Company? How Do I Know?
Sustainability initiatives are usually about by one (or more than one) organization goal, which usually falls into one of these categories: Co2 reduction, cost reduction, or energy resilience.
Which factor is motivating the organization’s sustainability focus will drive much of an energy transformation plan, although the desires of the organization will have to be weighed alongside other factors, like space and land use mentioned below. For example, if energy cost reduction is desired, a sustainability director would be drawn to solar power. However, if there is no roof space or land available for solar, then the next most cost-effective option may be adding batteries or a software/controller for load balancing and peak shaving.
Energy transition plans become very complex when you attempt to align the assets, all site factors, and the organization’s desires and limitations. A variety of companies are available to conduct an analysis that weighs in all these factors. Unfortunately, most such analyses are expensive and time-consuming.
What is the combined available roof space and land area where the company could potentially deploy an onsite energy system? Very limited roof or land space does not preclude onsite energy development, but it means looking at space-conscious technologies like what we mentioned above in our example.
Consider the aesthetics of the onsite energy technologies. Some onsite energy systems are unpleasant to look at. What is the impact of unsightly technologies on the company’s reputation and/or relationship with the surrounding community, and is it worth it? If not, what alternative technologies can be utilized that are either more attractive or can be camouflaged or installed indoors?
Land Use Concerns
Because they are located closer to the end-user, some onsite energy technologies cause land-use concerns. Distributed generation technologies that involve combustion—particularly burning fossil fuels—can produce many of the same types of impacts as larger fossil-fuel-fired power plants (e.g. air pollution). These impacts may be smaller in scale than the impacts from a large power plant, but may also be an issue if they’re close to populated areas.
Also, some onsite energy systems require features that might not be readily available. For example, several distributed generation technologies, such as waste incineration, biomass combustion, and combined heat and power, may require water for steam generation or cooling. Is a water source accessible? Determine what existing features can be capitalized on, and what features will be a hindrance to certain technologies.
How Will Onsite Energy Help My Company Reduce Emissions?
It’s one thing to generally know that onsite energy could enable the company to reach its business objective of reducing emissions. However, examples with actual figures are far more impactful and easier to communicate to boards or leadership teams overseeing the energy initiative. With the detailed results of an energy analysis, Operational, Facility or Sustainability leaders can illustrate the power (pun intended) of onsite energy.
For example, a solar plus storage system allows a facility to operate as normal with a 50-100% reduced carbon footprint for commercial businesses. The solar energy created has a reduced environmental impact when compared to electricity that is generated by utilities using coal power. For instance, the typical number of pounds of Co2 generated by utility companies per kWh is 2.21. A solar system generates .07-.2 pounds of Co2 to produce the same kWh of energy. This pound-to-pound comparison takes into consideration all factors of Co2 creation, from transmission of utility energy/centralized generation to the commercial building. The significantly reduced carbon output even includes the construction and engineering incurred by adding solar as part of the onsite energy plan. Those are impressive and enrolling numbers to present to a board.
At your company’s site, there may already be some existing assets which can be utilized to support the deployment of onsite energy. For instance, a combined heat and power technology could convert wasted heat and energy into useful cost savings and facility management tools. Also solar panels on the roof could reduce the roof temperature by about 38% and the indoor temperature by about 5% which would greatly decrease energy costs during the summer months.
Existing features such as a water resource or large parking lots can all be utilized in optimizing an onsite energy solution. Water can be used to cool the operation of specific technologies and parking lots are often in great locations for solar production while adding value by decreasing the temperature of vehicles with shade.
Existing generators running on diesel, gas, natural gas, or propane can all be supplemented or replaced by energy storage technologies, which lessens the carbon footprint. An energy analysis will guide you through a cost benefit of selling and implementing newer technologies onsite.
We’ve referenced an energy analysis several times in this piece, and now it’s time to explain what we mean by that. There are consultants in the energy industry that can run an energy analysis including such factors as organizational goals, existing data and spend information, land, space and assets, and most relevant factors.
We mentioned earlier that this is time consuming and expensive. The other downside is that such an analysis is frequently performed by a company or consultant with specific energy technology expertise. This means that they likely do not have experience in all possible onsite energy options, and the plan they develop will not be comprehensive nor will it necessarily be the optimal solution for their clients.
This is the gap VECKTA has stepped into. Our energy experts were tired of seeing consultants develop analyses that were shortsighted or incomplete, and we were tired of seeing businesses paying the price for this. Furthermore, we knew that companies with aggressive sustainability targets don’t have months to wait just to receive an analysis, thereby delaying the design and deployment of the plan.
We developed smart software that can do in days what a consultant would normally do in months. Furthermore, we are not married to any technology or vendor, so we can scan the entire breadth of onsite energy technologies to truly pinpoint the best solution for an organization. Our sophisticated software analyzes every relevant factor and data to develop a conceptual study utilizing the latest onsite energy technologies. This conceptual study can help build the business case and upon decision to pursue the project further companies can leverage the VECKTA marketplace to access constructors, equipment suppliers and capital to make it a reality. Contact us today to see a demo of the platform.
Written By John Volker