Partner Insight: As the UK looks to strengthen its industrial base, Madeline Lockyer, Markets Director at Carbon Shift, Equans UK & Ireland, explores why funding, flexibility and electrification need to be considered together.
Equans will explore this further on 14th October in their webinar ‘The Future of Industrial Energy' – find out more and register.
There is renewed focus on the future of British industry. The Chancellor's call last week for a "new age of industrialisation" reflects the ambition to build modern industrial capabilities, strengthen resilience and support future growth.
But for manufacturers themselves, that ambition has to contend with a practical challenge: energy.
Energy costs, infrastructure constraints and the need to decarbonise industrial heat are increasingly influencing operational and investment decisions. At the same time, new approaches to energy flexibility, advances in electrification and evolving funding opportunities are changing the options available.
For manufacturers planning their next phase of investment, the opportunity is to stop considering these issues separately.
The industrial energy equation is changing
Industrial decarbonisation is often framed as a technology challenge: what can replace the assets and processes responsible for emissions?
Technology is obviously fundamental, but it is only one part of the investment decision.
Take the electrification of industrial heat. The technical solutions matter, but so do the implications for electricity consumption and infrastructure, the relative cost of energy, the flexibility available within the wider energy strategy and the capital required to make the change.
Change one of those variables and the business case can change with it. Manufacturers need to look beyond a simple comparison of technologies and consider the wider energy system around an investment.
Funding, flexibility and electrification need to be considered together
This is particularly important because the investment landscape is evolving. Emerging funding opportunities, including the forthcoming British Industrial Competitiveness Scheme (BICS), have the potential to form part of the investment picture for industrial energy users.
At the same time, flexibility in how energy is generated, consumed and managed can become part of the conversation about cost and resilience, while advances in electrification are opening further routes to reducing reliance on fossil fuels for industrial heat.
The important question for manufacturers is therefore not simply which technology should we adopt? It is: how do technology, energy strategy and available funding combine to create the strongest investment case for our business?
This means looking at the whole investment case. What additional electricity demand will electrification create? Can greater flexibility help manage that demand? What infrastructure investment is required? And could available funding improve the economics of the project?
None of these considerations determines whether an investment is right on its own. Bringing them together gives manufacturers a more complete picture of the potential costs, risks, carbon savings and operational benefits.
From technical potential to investable projects
Businesses need to understand their existing energy and emissions position, identify where the strongest opportunities lie and then develop projects with sufficient commercial and operational detail to support an investment decision.
That means bringing engineering, operations and finance departments into the conversation: technical viability, operational impact, investment requirements and anticipated outcomes need to be understood together.
This principle sits at the heart of our approach within Carbon Shift: moving from targets and technical opportunities towards practical, investable projects with a clear route to delivery. For manufacturers, this is ultimately about making the energy transition work for the business.
Making industrial decarbonisation investable
The challenge is significant, particularly for manufacturers reliant on energy-intensive processes and industrial heat. But the changing energy landscape also creates opportunities to rethink how energy is used and invested in.
Manufacturers that can bring technology, funding and their wider energy strategy together will be better placed to identify projects that are commercially and operationally credible.
Exploring the future of industrial energy
We will explore how manufacturers can put these principles into practice during our upcoming webinar 'The Future of Industrial Energy: How UK Manufacturers Can Unlock Funding, Flexibility and Electrification' at 11am on Wednesday 14 October.
During the 45-minute session, Equans experts and industry partners will examine industrial heat decarbonisation, BICS, flexible energy strategies and electrification, alongside practical experience from industrial energy projects delivered across Europe.
If you work in energy, sustainability, operations or investment within a UK manufacturing or industrial organisation, register to join the webinar and explore how funding, flexibility and electrification could shape your next industrial energy investment.
This article is sponsored by Equans UK & Ireland.
