Sometime in 2006 John Allan, the current chairman of Tesco and Vice President of the CBI, turned to his Strategy Director and said: ‘We’re only talking about it, aren’t we: sustainability.’ At the time John was the Chief Finance Officer of DeutschePost DHL, one of the largest companies in the world, with over 500,000 employees and a carbon footprint the size of Texas. His Strategy Director, Jon Bumstead, set about doing something. His initiatives led to DP DHL’s highly successful Go Green programme, the achievement of its first 30% carbon efficiency target four years early and the incubation of a start-up that has evolved into the UK based sustainability consultancy Neutral Supply Chain.
Fifteen years on Jon and his business partner – here your Blogger – develop and implement sustainability strategies for global companies in their supply chain operations. Customers have been broad: from McDonald’s, CEVA and Aramex to the Government of Dubai; and today the French manufacturer Schneider Electric. The target is Net Zero emissions – and no compromises.
Success in reducing emissions depends upon good methodology applied rigorously and innovatively, from concept to hands-on implementation. This has four stages: Assess – Reduce – Reuse – Replace. It ensures that energy measurement, data analysis and efficiency of use come first. Recycling and the circular economy must be built in. Then we replace existing fossil fuel dependency with renewable generation, energy storage, demand management and Insetting over Offsetting.
Of course the devil is in the detail. We know that the energy performance of a warehouse in Dubai will be very different from one in Telford. But with smart data analysis, benchmarking and a tailored approach to retrofit a scaled-up programme works.
From Global Supply Chain to Home
Almost two years ago we realised that what we were doing in our customers’ supply chains applied equally to domestic housing. We therefore set out to apply the same techniques and technologies to our own home retrofits. The challenges and complexities turned out to be the same:
- It is essential to measure and understand the way energy is used in the home to design the best retrofit for efficiency and decarbonisation.
- The variety of technical options and gadgets that are on the market seem overwhelming.
- The higher cost per kWh of electricity over fossil fuels, when combined with increasing energy price inflation makes decarbonising heating particularly challenging.
Six months later we were setting up a new company, Neutral Home Ltd and winning a UKRI Smart Grant to develop a data service that will automate key decisions in the home around energy efficiency and join up what are often stove-piped equipment, such as heat pumps, solar array inverters, car chargers and battery storage. We call it the Home Brain and are building it to make optimised decisions for demand management. It is enabling retrofit business cases which take best advantage of home renewable energy generation wherever possible, along with the arbitrage afforded by dual band and fully flexible tariffs such as Octopus Go and Octopus Agile.
Starting with individual homes we quickly moved into the social housing sector, working with the Housing Association Vivid on a 56 apartment complex in Basingstoke. We already knew that understanding human behaviour is essential in achieving energy efficiency, so we make the social aspects a cornerstone of each project: from lifestyle choices to serving the vulnerable customer. Just as in our commercial work the technical solutions for retrofit differ between a modern block of flats and a 200 year old detached house, but the methodology, data analysis, programme design and implementation approach are the same.
With scale and a joined-up project come better returns on investment, the ability to bring external finance for capital expenditure and, perhaps most importantly, large scale data. Together these lead towards the creation of domestic energy networks, demand response and the re-invented national grid that renewable energy generation demands of the UK’s power distribution infrastructure.
The range and complexity of our housing stock, with a wide variety of different retrofit needs, occupier lifestyles and economic circumstances all add up to make the scaling up of decarbonisation a major challenge. But experience in the commercial sector, learnt across supply chains which span the globe, has shown that a similar approach to domestic housing in the UK can be successful:
- Measure and use the energy data from each home.
- Tackle its whole energy system, not just one aspect.
Build in renewable energy generation and storage and automate its use to cut per kWh costs and manage demand.