Energy Efficiency: From the Boiler Room to the Board Room (Podcast)

[00:00:04.440] – Aristeidis Tsakiris
Hello, and welcome to the Podcast series “Scaling up energy efficiency”. This is episode eight, and today’s topic is “Energy efficiency: From the boiler room to the boardroom”. We are podcasting from Denmark, one of Europe’s most energy efficient and sustainable economies, which earned for the second year in a row the top spot in the Environmental Performance Index, a global Sustainability ranking developed by Yale and Columbia University. My name is Aristeidis and I work as a project officer at the Copenhagen Center on Energy Efficiency, a part of the UNEP Copenhagen Climate Centre. Without further ado, here is your host, Gabriela Prata Dias, head of Copenhagen Center on Energy Efficiency, who will moderate today’s podcast.

[00:00:54.860] – Gabriela Prata Dias
Energy efficiency can enable more than 40% of required greenhouse gas reductions to achieve global climate goals without requiring new technology breakthroughs. Improved energy efficiency has the potential to create new jobs, foster innovation, improve the productive use of electricity, like for example in cooling, clean cooking, lighting, heating, mobility, etc. And boost economic growth. Energy efficiency is the fastest and most cost effective way to reduce fossil fuel demand and build a cleaner and more resilient energy future. Yet global energy efficiency has not improved at the pace we need to achieve the climate goals. UNEP Copenhagen Climate Centre hosts the Copenhagen Center on Energy Efficiency, which supports developing countries and emerging economies transition to energy efficiency. The Copenhagen Center on Energy Efficiency is a partner to Mission Efficiency, a coalition aiming at accelerating the transition towards energy efficient economies worldwide. Mission Efficiency has an invest line of action and there are four task forces there. One of those is around the narrative the need to reframe key messages for a range of audiences on benefits, experiences and feelings received from energy efficiency. Today we will be addressing this topic, the narrative how to raise the profile of energy efficiency as the main solution for achieving net zero or more simplistically how to make energy efficiency move from the boiler room to the boardroom. And for that today we have with us Toby Morgan. He has over 15 years of experience in energy efficiency and climate change sectors, working across both the public sector and NGOs. He is passionate about tackling climate change and sees energy efficiency as the number one priority action to reduce global CO2 emissions. Toby joined the internationally renowned NGO Climate Group in 2017 after previously working on various energy projects for two London borough councils. So thank you for coming today Toby, and very welcome to this podcast. And I would like to ask you first of all, what is the Climate Group and what is the focus of your work?

[00:03:14.360] – Toby Morgan
Great, thanks Gabriela, really good to speak to you today. I really appreciate this invitation to speak on the podcast. So yeah, Climate Group, we’re an international NGO, we drive climate action fast and our goal is a world of net zero carbon emissions by 2050 and greater prosperity for all. We are founded in 2004 and we’re based in London, head offices in London, but we also have regional offices in New Delhi, in New York, in Amsterdam and in Beijing as well. And we also have a number of people working in Latin America. So we have a real global reach and we work with both businesses and with governments to formulate climate strategies, work on various projects and we really want to share the message and raise the profile of climate action. And my part of that is working specifically on the built environment and energy efficiency and we really want to raise the profile of energy efficiency, as you said, because it doesn’t quite get the same amount of profiling or attention that it deserves and people don’t realize what a huge benefit it can be. So that is my job at Climate Group. That’s what I’m here to do. And looking forward to discussing more with you today.

[00:04:32.810] – Gabriela Prata Dias
Thanks a lot Toby, for this introduction and well, as part of your mandate, you are for sure aware of the last UNEP Emissions Gap report which says that to get on track to meet the Paris Agreement goal, the world needs to reduce greenhouse gasses by unprecedented levels over the next eight years. So up to 2030, the report makes a call to action on buildings, industry and transport sectors. And often, and especially during the year 2022, the narrative has been very much around energy supply. Would you agree with that? Where do you think the energy demand side lies in the context of an energy crisis that is most striking at the moment in Europe? Are companies and governments and individuals considering what to do about energy demands or just the focus is just on supply? Can you elaborate on that?

[00:05:33.160] – Toby Morgan
Yeah, for sure. Thanks Gabriela. So I think it has really brought it into focus at the moment, the energy crisis in Europe and everything that’s happening with record high prices for fossil fuels, for gas, for oil and in the UK we’ve been really hit with householders are really aware of their energy bills going up massively. But often the energy efficiency part of that demand reduction is being overlooked for a long time and it has helped to bring it back into focus. But a lot of the things that we’ve seen coming out of governments has been to help people with bills, both individuals, householders and governments and businesses, which is useful. And we do need for people to be supportive with their energy bills, but it’s actually a lot of it is not reducing that demand in the first place. So it’s not sustainable. So with energy efficiency it’s the fastest and most cost effective way to reduce our fossil fuel demand in a sustainable way. If we reduce the amount we’re using in the first place, that also enables the faster and greener transition and clean energy transition as well. So we don’t want to see it as in conflict or in competition with increased renewable electricity, we see it as working hand in hand, so they’re really complementary to each other. And if we reduce the demand in the first place, that’s good for everyone. It’s not just good for carbon reductions, carbon savings, it’s also good for it can be good to bring many other benefits as well. So if you look at energy efficiency improvements in housing or in offices or in other buildings, it can be a massive boost for jobs as well. So it’s a huge jobs creation machine. So we can see that it’s not just good for the individual, company or household reducing their bills, it’s good for the wider economy as well. And if we’re creating lots of extra jobs, you know, it can really help kick on people’s economies when we’re coming out of COVID recovery. And this energy bill crisis, it can be really good for the economy if we invest in energy efficiency, for the climate, for carbon, but also for the wider socioeconomic benefits as well. But, yeah, like you mentioned, that the rate of renovation, the rate of improvement in energy efficiency is nowhere near where we need to be. So we could say that it needs to be doubled or even tripled the current rate to reduce our energy demand, to hit our climate goals, to hit net zero by 2050, we really need to ramp up efforts. So that’s what we’re trying to do with the work of Climate Group, the work I work on, on EP 100, our corporate campaign on energy efficiency, and also the work we do on LED lighting. So we work with cities all over the world and saying to them that if they invest in energy efficiency, it’s good for the climate, it’s good for the economy, it’s good for jobs. So it really is a win win proposition.

[00:08:42.940] – Gabriela Prata Dias
Yeah, Toby, but let me step back for a second. But what we are really at the moment, seeing that energy efficiency is not gathering the pace that’s needed, why do you think this is happening and what needs to happen for energy efficiency to move forward? Is this a technology problem, economic problem, or actually a narrative one is the topic of today’s podcast. What are your views about this?

[00:09:15.110] – Toby Morgan
So I think Gabriela, like you said, it doesn’t have the profile. So what we’re trying to do at Climate Group and with our work is raise the profile of energy efficiency. It unfortunately does have a bit of an image problem. It can be seen as not the most exciting topic, but how we can get around that, how we can frame it, is looking at those wider business benefits, those socioeconomic benefits as well. So it’s not a kind of dull, dry, technical subject. So with the strap line we have with EP 100 that you mentioned, start bringing energy efficiency from the boiler room to the boardroom, we want to say, you know, this is good for businesses, you should be investing in this. We’ve seen lots of companies now setting up net zero targets or ambitions and saying they’re going carbon neutral, those types of things, but actually lots of them don’t have a clear road map of how they’re going to achieve that. So we want to see energy efficiency as the key pillar of every corporate decarbonisation strategy. If you reduce the amount of energy you’re using in the first place, that makes the transition to clean energy a lot quicker, a lot faster, a lot cheaper. But it also brings wider business benefits as well. And the same with cities. So if you’re investing in energy efficiency for cities, it’s good for your climate goals, but it brings lots of these other benefits as well. So that’s what we want to emphasize. We want to get companies away from just purely thinking about a simple return on investment type calculation when they’re looking into energy efficiency. Actually we can say this brings wider business benefits. It’s good for your business to do this. If you’re making your buildings more efficient, you’re making them more pleasant environments to work in. That’s not just good for saving energy, it’s good for your workforce, it’s good for your employees, it’s good for health and well being, it can increase the productivity of your buildings and of your staff. So if you’re looking at your whole organization, all the different facilities, the offices, the factories, the warehouses, if you improve the efficiency of those you’re actually optimizing the performance of your business. So it brings all these wider business benefits. So we’re really empathizing with EP 100, the wider business case and we want to say the top companies in the world are investing in this, you need to be doing this too. I think the energy crisis at the moment has brought it into focus and we want to really hammer home the message now that you need to be doing this. It’s not just good for the climate It’s good for business as well.

[00:11:57.640] – Gabriela Prata Dias
And that’s very relevant. So most of the achievements we have to get to are with the help of or with the huge support from the private sector. So you mentioned net zero strategies, they should start with energy efficiency and you already mentioned a few examples of programs that you are leading from Climate Group and these are addressed to buildings and as well as to industry. What are the aims and the final objectives and what have you actually achieved so far with these programs?

[00:12:33.820] – Toby Morgan
Yeah, absolutely. So with EP 100 we basically get companies, large multinational, corporates, to set ambitious public targets for energy efficiencies and then they have to report to us every year. So we monitor that progress and then promote their achievements and their progress and highlight it to other companies saying this is a good thing. So currently we’ve got over 120 different members from lots of different sectors. Really. So like you mentioned, buildings are really important. So we look at companies that are optimizing their buildings, but we also have quite a lot of companies in the manufacturing and heavy industry type sectors as well. So we have those really energy intensive type companies. So we’ve got manufacturers, automakers, even cement companies, people like that, that are using really large amounts of energy within their operations. So if they can optimize all those operations, go through the whole process of the different stages of manufacturing, they can really save huge amounts of energy and therefore money, and therefore carbon as well. So we want all companies to look at every stage of their business, every aspect of their business, and really optimize what they’re doing there. With the current savings to date, all the EP 100 members have saved about the annual emissions of France and Switzerland combined. So we’re looking at huge energy savings. And like you said at the start, the International Energy Agency have called for a relentless focus on energy efficiency if we’re to have emissions in this, the 2020s, which we call the climate decade, so we need to have emissions by 2030. So companies really need to be on this agenda if we’re to have any chance of hitting net zero in 2050. With buildings, with industry, there are huge savings available. It’s just going through that sort of step by step process. And companies that are on top of this agenda are really trying to get their head around where are we using energy? So they’re using data insights, they’re using monitor sensors, smart metering, those types of technologies to really see, dig down into the details of where are we actually using energy within our operations, what time today are we using it? Are we wasting energy at night by, you know, having all the air conditioning on or all the lights on? So we can look at smart technologies as well, that can really help facilitate this type of optimization of buildings and of industry as well. So, yeah, that’s what we’re trying to do with EP 100. And then the other work that we do at Climate Group as well is work specifically on LED lighting. So lighting, it’s often a neglected topic, but there’s huge savings available if you convert existing technologies to LEDs. And, you know, it’s hard to put an exact figure, but it can be between 50%, 70% savings just by doing your lighting. So it really is a no-brainer, it’s a quick win. It’s the least disruptive thing that you can do to save energy is switch out your lighting within your buildings, within your operations. So we promote all companies, all cities with their outdoor street lighting should be converting to 2025, all their lighting to LEDs. And with that technology as well, you can then look into smart city smart building type applications and you can fit various sensors and monitors, link that into the lighting systems to really gain insights, data insights into how your city is running, how your building’s running and use that information to optimize things and hopefully improve the liveability of cities and sustainability. So there’s kind of lots of wider benefits you can do from LED specifically. So, yeah, we’re really trying to hammer this message home and saying if you are setting a net zero target, if you are setting a carbon neutrality target for your business, then you need to start with energy efficiency. It really should be the first thing on the agenda. And then you can start looking into all the other possibilities of buying renewable energy and looking at electric vehicles, those types of things. But we really want to reduce the amount of energy we’re using in the first place before we do all the other stuff which is required as well.

[00:17:05.440] – Gabriela Prata Dias
And you have mentioned already several European countries, but you also have this global mandate and you have operations in many parts of the world now with a specific angle on the Global South. Do you think all the things that you’ve been saying throughout this conversation would apply in the Global South? I mean, the developing countries and emerging economies, how can we make energy efficiency actually move from the boiler room to the boardroom, as we are saying?

[00:17:36.790] – Toby Morgan
Yeah, absolutely, these things are really applicable globally, so we want energy efficiency to be raised all around the world. But yes, it’s specifically, it is really relevant in the emerging markets. We have lots of members from emerging markets and energy efficiency there is really important often these markets. So Asia Pacific in India, in Latin America, there’s lots of manufacturing type companies as well. So we’ve got a number of big members from those countries. And if you’re in those energy intensive industries, energy efficiency is really key as well, so they can save huge amounts. So one of our cement company members in India actually went through the whole process of the cement manufacturing plants and just by tweaking a few things here and there, have saved 10% of their overall carbon footprint. So 10% of cement companies like the carbon footprint of a small country, to be honest. So if you can each out savings through the various parts of your business or your manufacturing process, that can equate to huge savings and huge financial savings in emerging markets as well. The energy mix tends to be still quite fossil fuel heavy as well. So, you know, the energy savings therefore equates to huge carbon savings because often there the energy mix is quite fossil fuel intensive still. So it becomes great for the business, but it’s also good for climate emissions as well. And it helps with the transition to renewable electricity. If we’re using the amount of energy used in the first place, that helps the whole energy transition. So it’s kind of a win win thing. So, yeah, it’s really important for those emerging markets. Often the biggest barrier can be for companies, for cities, can be those upfront costs as well. So we really need more support for emerging markets to get some innovative financing in there and unlocking public private financing because it’s the same in developed economies as well. The upfront cost is still one of the major barriers and it’s often the major barriers cited by our members are the upfront cost. So we do want to see more innovative financial instruments used and bought in, and supporting policies is really key as well. So governments, states, cities, whoever it is, can bring in supporting policies that can help with this transition and really unlock those savings.

[00:20:22.290] – Gabriela Prata Dias
And I think we have reached the final moments of our podcast today. I would like to thank you very much for your availability and for sharing your experience and the Climate Group experience. And with this, I don’t know if you would like to save some final word, otherwise I’ll just wrap up with some final comments. Anything else from you that you would like to share?

[00:20:51.620] – Toby Morgan
Yeah, absolutely. Thanks Gabriela, and really appreciate this opportunity, it’s been great to chat. So, yeah, as we said, we want every single company in the world to have a dedicated energy efficiency target. So when you’re looking at your corporate decarbonisation goals, if you haven’t got energy efficiency in there, then you’re really missing out. So we want every single company to prioritize energy efficiency. Like I said, it’s not just a simple return on investment decision, it’s looking at the wider business benefits for both corporates, for cities as well, and all these additional socioeconomic benefits that it can bring, like jobs, like health and well being and improving the optimization of your business. So we want every single company to really prioritize energy efficiency if they want to do that with EP 100 at Climate Group, that is great as well and we’d be more than happy to speak to you. So please drop us an email and we’ll be happy to talk to you about what we’re trying to do here and we’d love to have you join our movement as we call it, with EP 100.

[00:22:01.740] – Gabriela Prata Dias
Thank you very much Toby, and thanks to Climate Group for sharing the time with us today. So with this, I’ll just finish by saying yes, we’ve heard today about the multiple benefits of energy efficiency, how energy efficiency can be important in covered recovery and in a situation of record energy prices. The opportunities around specific energy efficiency programs like the EP 100 that’s led by the Climate Group and the opportunities around the corner on new applications or on smart applications using digital solutions as well and the fact that we need absolutely to prioritize energy efficiency when defining net zero strategies. And this should be effectively the first thing to address. So with this we hope we can achieve very quick and impressive savings like the ones you mentioned in the industry in India, and we also need strong financing support from all corners of the world. And with that, thank you very much and see you on next podcast.

[00:23:20.710] – Aristeidis Tsakiris
Thanks for listening to the podcast “Energy Efficiency: From the Boiler Room to the Boardroom” with Toby Morgan and Gabriela Prada Dias. If you liked our show, share it on your social network. And if you want to know more about today’s topic, check the Copenhagen Center on Energy’s Efficiency web page. Stay tuned and subscribe to receive notifications about our next podcast. See you at the next episode. And do not forget that energy efficiency is a journey, not a destination. Cheers.