15 March 22

The cleanest energy is the energy never used

Energy efficiency is as important to our sustainable future as wind farms and solar panels, making it a huge investment opportunity

Late last year, COP26 in Glasgow closed with a renewed commitment to limiting global warming to “well below 2℃” above pre-industrial levels.

The conference agreed that achieving its most pressing aim would require “rapid, deep, and sustained reductions in global greenhouse gas (GHG) emissions,” including reducing global carbon dioxide emissions to net zero by 2050.[1]

COP26 established that momentum has shifted. Increasingly, nations, organisations and even individuals are committing to net zero targets.

Is net zero achievable? Yes, but it will take a Herculean effort. And at the moment, the demand for systems and solutions to help the world meet that target is outpacing supply.

So what’s the answer? What can we all do now?

The future is energy efficient

In short, we need to be much more energy efficient. The cleanest energy is the energy never used. Any push to net zero is doomed to failure if we don’t make better use of the energy we produce.

Doing so is an urgent priority. We currently waste more than half of that energy because of huge inefficiencies in the transmission and distribution network and at the point of use.

For example, of 29 million homes across the UK, at least 19 million still need to be made climate resilient.[2] That also means making them more energy efficient.

The adoption of renewable energy will be key to our net zero ambitions, and energy efficiency has to be done in tandem with the drive for greater renewables.

In 2020, 3.6TWh of wind power was curtailed.[3] That’s enough to power a million homes for a year. BESS projects could have reduced this curtailment. Batteries present a massive opportunity to use energy more efficiently by storing and using power when needed rather than leaving it to be spilt and just to be blowing in the wind aimlessly.

We need to invest now for a sustainable future

If we are to reach net zero, all of this has to change and we need to put capital behind purpose to accelerate the transition.

The UK’s building stock will have to be made energy efficient, which is a huge task on its own. Significant investments will be needed not only in clean energy production, but also in the means to store and distribute it more effectively.

To some extent, this is already happening. In 2020, the government made £3bn available for energy efficiency in buildings.[4]

The National Infrastructure Strategy, meanwhile, sets out nearly £650bn of public and private investment for initiatives that can help the UK meet its climate targets.[5]

But we need to do more.

A wealth of opportunities

For conscientious investors, all this presents a major opportunity. The UK urgently needs to upgrade its energy infrastructure. It needs to transform a woefully energy-inefficient housing stock. It needs to help its industry go green.

Private capital will be crucial to this green energy revolution. We can’t modernise energy infrastructure and rapidly boost energy storage capacity without it.

Government has a large part to play, of course, by committing to long-term policies that encourage investment in clean energy infrastructure.

But investors will be key to our cleaner, greener future. Energy-efficient infrastructure projects offer an exciting way for anyone to play their part in the green recovery - for profit and purpose.

What TEEC offers

We believe that investment can be a force for good, which is why our Triple Point Energy Efficiency Infrastructure Company (TEEC) channels funds into energy efficiency projects to make the UK energy system greener and more sustainable.

For more information, visit TEEC.

[1] https://www.natlawreview.com/article/results-cop26

[2] https://publications.parliament.uk/pa/cm5801/cmselect/cmenvaud/346/34604.htm

[3] https://theenergyst.com/additional-20gwh-of-battery-storage-could-cut-wasted-wind-power-by-50/#:~:text=Analysis%20from%20LCP%20shows%20Great,homes%20for%20a%20whole%20year.

[4] https://www.gov.uk/government/topical-events/budget-2020

[5] https://www.gov.uk/government/publications/transforming-infrastructure-performance-roadmap-to-2030/transforming-infrastructure-performance-roadmap-to-2030