‘Good for business’ UK firms given blueprint to solve energy crisis and save billions

Electric diggers showcased on energy efficient construction site

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It comes as the Government has faced criticism for focussing too heavily on energy-saving policies for consumers and homeowners, instead of pushing industry to cut its consumption. Speaking to at the International Energy Agency summit in Sonderborg, Denmark this week, Kim Fausing, chief executive of multinational engineering company Danfoss, suggested even environmentally unfriendly corporations could benefit from greater energy efficiency.

In a report released during the conference, the IEA estimates that energy efficient policies could save the world around 30 million barrels of oil a day – three times more than what Russia produced last year.

It predicts that if energy prices were to stay the same, it would reduce costs by just over $1trillion (£796billion). Meanwhile, it would save around four times the amount of natural gas the EU imported from Russia in 2021.

Fatih Birol, IEA executive director, said that energy efficiency measures were “utterly essential” to the response to the current energy crisis.

The IEA said that, among other measures, Governments must enforce regulations that “exclude the worst performing equipment and practices from the market”, as well as incentives to “speed up the upgrade”.

Danfoss’ headquarters in Sonderborg were showcased as an example of how energy could be saved on a massive scale.

Its 250,000sqm manufacturing base there will go Net Zero this year, after growing by 123 percent while at the same time only increasing energy consumption by 11 percent, according to Torben Christensen, head of global services at the firm.

Danfoss has employed heat extraction technology to recycle energy from its machinery and data centre. In a seven-year period, it has removed 70 percent of its energy consumption through such techniques, reusing a further 15 percent and utilising local farms for biomass where needed.

Asked if there were ways to make such energy-saving technology more affordable, Mr Fausing told this website: “I think there is.

“If you look today, there are certain groups of technology that you know are driving low energy consumption – and those technologies, I would say from an investment point of view as companies, and our footprint […] it’s actually good business for us to invest in it because there are quite short payback times.

“That goes for the UK: there are many areas where you can invest where the payback times are relatively short compared to building big energy infrastructure.”

Rather than this shift being motivated by Government funding, the business chief said it should come from “a lot of private investment”.

He added: “My encouragement is that it’s really good business to decarbonise if you think about energy efficiency.”

Mr Fausing claimed Danfoss only invested in measures with a three-year payback time to remain economically viable.

Danfoss also exhibited its new build site in the southern Danish town, which was making use of electric diggers a spokesperson claimed were “comparable” to their diesel alternatives. They said such machines were now had “no difference in terms of operating” and were designed not to sit idling when not used.

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However, a report by Parliament’s environmental audit committee found that there was “little Government guidance” as to how its climate targets are to be met by housing constructors.

It noted that carbon emission from the construction, maintenance and demolition of buildings “have been ignored” in Government policy – despite causing more CO2 emissions annually than aviation and shipping combined.

Responding to these criticisms, Lord Callanan, a UK business and energy minister, said: “We have energy performance improvements. There is legislation which was introduced mandating product efficiency standards.

“In terms of industry, there’s the emission trading scheme, forcing them to pay for all of their emissions, which is driving them towards decarbonisation and energy efficiency.”

The minister charged also with overseeing corporate responsibility also revealed the Government was considering new laws to make construction less energy-consumptive.

Lord Callanan said: “In terms of building, we’re looking at regulations to possibly be introduced in the future in terms of building regulation efficiency for industrial buildings as well as domestic building.”

Brian Motherway, the IEA’s head of energy efficiency, gave an optimistic view of the direction of technological advancements, telling reporters: “Every year we get better at extracting more value from [our] energy.”

Meanwhile, Fatih Birol, IEA executive director, told the conference: “I don’t know any other solution like energy efficiency that can simultaneously address our economic crisis, energy crisis, and climate crisis.”

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