ETI hires Cambridge Consultants to lead HEMS project

25 November 2015

ETI and Cambridge Consultants have joined forces to deliver a smart home energy system that provides UK users with key insights and information about their home energy behaviour. The UK needs to find ways of reducing the carbon emissions used to heat homes, consumers have however, been apathetic about making low-carbon changes a priority. Through the project, the ETI hopes to help consumers see the benefits of reducing waste and moving to low-carbon energy solutions. The two year deal is worth around £4.9 million.

The Energy Technologies Institute (ETI) was established by the UK government in 2007 to provide a bridge between public, private and academic institutions that are working toward systems and technologies that will help the UK reach its 2050 climate commitments. The institute’s stated goal is to “accelerate the development, demonstration and eventual commercial deployment of a focused portfolio of energy technologies, which will increase energy efficiency, reduce greenhouse gas emissions and help achieve energy and climate change goals”.

Next decade is critical

One of the key issues faced by the UK in its bid to reach its (binding) 2050 greenhouse gas emissions targets is to decarbonise home heating. Home heating accounts for around 20% of the UK’s total carbon emissions, and with around 90% of the current housing stock still expected to be around in 2050, and with fewer than 4% using low-carbon heating – innovation and incentives are required to get people to shift from the preferred gas central heating (by 90% of users) to low carbon technologies.

As part of the ETI’s efforts to develop ways in which homes can be heated through a low carbon approach, the institute has appointed Cambridge Consultants to lead a £4.9 million, two year, home energy management system (HEMS) project. One of the key challenges the project aims to overcome is the apathy many consumer energy users have toward their sometimes wasteful emissions.

There are two principal pathways for decarbonising domestic space and water heating

The current HEMS project incorporates smart meters into peoples’ homes to provide a means of monitoring energy usage – with a number of means of recommending energy wastage reduction, through prompting consumers to change potentially wasteful behaviour. Under the leadership of Cambridge Consulting, the project will be expanded to “create an energy management system for a building that is not simply an automation of existing controls.” The upgraded HEMS approach will provide services that inform and engage consumers to transform their home heating measures. “Most of us have only a vague idea of what the kilowatt hours we buy from our energy supplier actually mean – and how they translate into our experience of being warm and comfortable at home,” says Tim Ensor, head of connected devices at Cambridge Consultants.

To overcome apathy, while shifting consumers to lower carbon emitting heating modes, the HEMS will provide a consumers with a range of options and information about the smart ways in which to deliver and store heat in their homes. Through proving “consumers with a range of solutions for better control of how they use energy in their homes,” as well as “providing the industry with compelling propositions and business models for the future,” the project hopes to bring about wide spread changes in heating behaviour by which all the stakeholders win.

Few consumers are presently engaged to change heating systems

Donna Gandy-Wright, project manager at the Energy Systems Catapault, which is delivering the HEMS project for the ETI, remarks on the partnership: “We chose Cambridge Consultants to lead this project as it has all the necessary skills under one roof – from user experience and web designers to radio engineers and mathematicians. It also brings a valuable fresh perspective to the issue, which we hope will help the energy industry reinvent its relationship with its customers.”

Ensor adds, “Our track record of delivering breakthrough innovation – combined with the ETI’s insight into the UK energy market – makes for an exciting partnership that has the potential to transform the way we manage our home heating.”

Homes require new low carbon installations

Implementation roadmap
The new system will be developed for testing during the 2016-17 winter. The results will be analysed to provide insight into consumer behaviour patterns around energy use in the home. Possible further developments to lower costs across the board will be developed from the results.

The move to incorporate green technologies within homes is also being considered within the new development of commercial projects. Deloitte for instance recently opened the world’s most energy efficient building, while McKinsey & Company has released research into the value added of green space development. 


Private equity firms ramp up sustainability focus

19 April 2019

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.