Is less energy consumption our destiny?

By Ken Warner, managing director, Energy Renewals

Our energy demand is set to peak in 2030 before dropping, according to a new report.

The decline in demand is likely to come about following a mix of stricter policies, new technology and the growth of solar and wind power.

The World Energy Council, the UN-accredited global energy body, predicts worldwide demand will hit an all-time high in 2030 and then begin to tail off in its latest report on possible future energy scenarious.  This is in stark contrast to the historic trend which has seen global energy demand more than double since 1970.

Whilst there will be many different facets which will contribute to the potential reduction in our future energy use, one of the areas where less consumption will be achieved is in the use of smart technology.

Companies can already apply smart technology in order to reduce their carbon footprint and therefore their energy bills.

In fact, it was this which formed the basis of my presentation at the Facility Management and Property conference held at the University of Cambridge earlier this month. I explained to a room packed with facilities and procurement professionals that using smart technology is the way forward. It’s cost effective because you reduce your energy consumption and manage your usage.

However, whilst the report, produced ahead of the World Energy Congress in Istanbul, predicted a fall in energy consumption, demand for electricity is expected to grow and will double by 2060 which will require greater infrastructure and the application of smart technology for more efficient and cost effective consumption.

Solar and wind energy, accounting for 4% of power generation in 2014, will grow at a phenomenal rate, to represent 39% by 2060, the report suggests, but coal will decline radically before disappearing entirely from the energy mix, although it’s use had only dropped by 5% to 81% in 2014.

Three scenarios were drawn up in the report, produced in partnership with consultancy Accenture Strategy and the Paul Scherrer Institute, a research centre in Switzerland: the first being fossil fuels providing 50% to 70% of energy by 2060; in the second, oil production will reach a 94m barrels per day peak in 2030; although the third scenario highlights the possibility of oil production first reaching a peak and then plateau at 104m barrels per day for 10 years from 2040.

Persuading motorists to switch from petrol powered cars is regarded as one of the biggest obstacles to overcome by the report. Oil powered 92% of cars in 2014, but as electric vehicles are adopted more widely, that is expected to drop to 78%-60%.

For us at Energy Renewals, persuading companies to monitor and therefore better manage their energy usage is our biggest obstacle. Bosses like the idea of both reducing consumption and bills but baulk at the thought of devising, implementing and managing such a programme particularly as the biggest wins are inevitably gained over a longer period of time which demands consistent monitoring, reporting and tweaking as well as on-going staff training.

Even when we highlight Demand Side Response or DSR whereby the National Grid pays companies to cut their energy consumption at times of peak demand, thereby reducing consumption and bills as well as delivering an additional revenue stream, senior managers are wary. They love the idea, it’s a winning formula all round, everyone can see that, but they often find the thought of implementing a programme to achieve that goal difficult to comprehend.

It’s up to the likes of energy companies to educate business that it isn’t as complicated as they may first imagine, particularly if specialists are appointed to audit usage, devise a programme, implement, monitor and report back.

When you consider that businesses which have signed up to the National Grid’s DSR programme are earning around a combined £1 million a year and a staggering 96% of companies are not taking advantage of the financial rewards DSR brings, it really is a gift horse not to be looked in the mouth.