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UK move to distributed energy 'could cut CO2 footprint by 11%'

Highlights

137 million mt CO2 cut from health, industry, hospitality

Energy efficiency the dominant contributor

Carbon accounting rules need reform

London — The UK's health, industry and hospitality sectors could deliver savings of 137 million mt of CO2 between 2017 and 2030 if 50% of sector companies adopted distributed energy technologies, Centrica said Monday.

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By far the biggest single contribution comes from the application of energy efficiency and cogeneration, the two together delivering around 90% of the CO2 cuts estimated for health and industry, and 36% for hospitality.

The potential CO2 cut equates to 11% of the sectors' carbon footprint and would reduce the UK's entire Carbon Budget to 2030 by 3%, Centrica said.

Companies are increasingly turning to distributed energy for three reasons, Centrica said: falling costs; new revenue streams; and easier financing.

"Battery prices are down 79% since 2010 and are expected to fall further still to around $70/kWh by 2030," another 67% drop on today's prices, Centrica said.

Companies with on-site generation are buying and selling electricity live in the wholesale market and access revenue from the Capacity Market, while a growing number of banks are offering green loans to businesses, it said.

The bulk of the savings are in energy efficiency, the report showed.

A 50% switch to distributed energy technologies would mean the National Health Service saving 8.8 million mt CO2 from 2017 to 2030 via energy efficiency including cogeneration (91% of the savings); analytics (5%); solar PV (2%) and LED lighting (2%).

Industry could save 106 million mt CO2 over the period via a similar split, energy efficiency/cogeneration delivering 89% of the emission cuts.

Hospitality is the exception, with 23 million mt of savings coming from solar PV (39%), energy efficiency/cogeneration (36%), battery storage (18%) and analytics (7%).

"NHS England could save GBP130 million a year on its energy bills if 50% of the organization adopted distributed energy solutions," Centrica said.

The company calls for three policy measures to drive a transition to distributed energy.

The Department for Business, Energy & Industrial Strategy should assess the role of distributed energy and promote the technologies across government and public bodies.

The Committee on Climate Change should do more to include distributed energy in future carbon budgets, and there should be reform of the UK's carbon accounting rules.

This should allow companies to report real-time carbon intensity data from their on-site storage or generation investments, and benefit fairly from the comparison to more carbon-intensive power plants running during a specific time period, Centrica said.

--Henry Edwardes-Evans, henry.edwardes-evans@spglobal.com

--Edited by Jonathan Dart, jonathan.dart@spglobal.com