Towards a Low Carbon Future –Opportunities for Business

CBI Annual Energy Forum 2009

Jonathan EvesNI Innovations & Insights Manager

28 January 2009Hilton Templepatrick

Total UK emissions now stand at around 695 million tonnes of CO2 (MtCO2), with business and public sector organisations accounting for 241MtCO2 each year by use

To meet the targets set by the Climate Change Act and the Committee on Climate Change carbon budgets, total UK emissions need to drop by 80% to 159MtCO2 in 2050

Huge economic challenges for UK plc and public sector bodies

Support for business and public sector will be crucial to deliver material carbon and cost savings and new low carbon technologies, companies and products

Challenging carbon targets in a challenged economy

We were set up in 2001 by government as a independent company limited by guarantee

We have a mission to accelerate the move to a low carbon economy

The Carbon Trust

We cut carbon emissions nowBy providing business and the public sector with expert advice, finance and accreditation

By stimulating demand for low carbon products and services

We cut future carbon emissionsBy developing new low carbon technologies through project funding and management, investment and collaboration

By identifying market failures and practical ways to overcome them

We help business and public sector organisations to deliver carbon savings now and in the future

We are delivering carbon and economic benefits as we help make the low carbon economy a reality

Economic Benefits

Cost savings now - we have delivered £1 billion in energy savings to our customers

Over the last 12 months we have saved our customers over £1m every day

Green Jobs and Industry – We have supported the development of over 200 new UK low carbon technology projects and companies

Private Sector Investment - The Carbon Trust’s £100m of public funding is leveraging £700m of private sector investment each year into the UK’s low carbon economy

Carbon Savings

Carbon Savings to date - We have helped our customers to save over 17MtCO2 since 2001

Carbon Savings in 2050 - our development of low carbon technologies is expected to deliver savings of up to 23MtCO2 a year in 2050

Value for money – National Audit Office, “The Carbon Trust’s advice for business has proved value for money and its Innovation Programme appears to be on course to do likewise”.

Cutting carbon now – delivery in NI

Key achievements in 2007/08 include

We helped our customers to save 116,000 tCO2 and over £19m pa

Stimulated £36 million of investment in energy efficiency and low carbon technologies

Awarded over £2.9m in interest-free loans that will reduce energy costs of 35 NI companies nearly £1m per annum

Over 900 delegates attending our seminars and workshops.

Carbon Trust Publications

The Carbon Trust and CBI partnership

Business Opportunities– to maximise the opportunities that the move to a low carbon

economy will create and deliver significant carbon savings that will help us meet our national targets.

Emissions Reduction – To integrate emissions reduction into corporate strategy,

manage and reduce the direct and indirect emissions and provide a wide range of advice and support for companies of all sizes.

Policy– to create the appropriate policy frameworks to enable

business to invest over the long term in low-carbon goods and services. Areas of of focus include innovation policy, fiscal incentives, energy-efficient buildings and emissions in products.

Climate change – a business revolution?

Climate change is a key strategic issue in most industriesIndustries will face different

periods of ‘creative destruction’Differential access to

technology or capital can be criticalThe greatest value-at-risk and

opportunity may be in niche parts of the value chain of major industry sectorsCompanies that prepare can

gain value and will avoid riskPolicy makers will significantly

determine the nature of the transitionThe choice of policy framework

and implementation detail is critical to value

Different sectors have different levels of opportunity and risk

Source: Carbon Trust and McKinsey & Co. analysis

Calculated maximum value-creation opportunities and transition value-at-risk for companies

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Company value-at-risk (%)

Offshore Wind Opportunity for UK

UK may require 29 GW Investment up to £75bn 70,000 jobs£8bn annual revenuesEquivalent to peak decade of North Sea Oil & Gas Development

Source: “Offshore wind power: big challenge, big opportunity” Carbon Trust 2008

Offshore Wind Opportunity for UK Actions required

Reduce costs Provide developers sufficient returns with an efficient incentive mechanismRemove regulatory barriers to deploymentGovernment to commit, industry to respond

Offshore Wind Accelerator

Aims to cut the cost of energy from offshore wind by at least 10%

Provisional commitment of £30m (up to £10m from Carbon Trust)

Areas of focus:

Offshore foundations – novel foundations with potential for lower costs

Wake effects – improving the optimisation of offshore wind farm layouts

Access, logistics and transportation –reducing access costs novel for wind farm construction and operation

Electrical systems – improving efficiency of offshore wind farm electrical systems

Climate changing opportunities for NI businesses

Low Carbon Design of Buildings

Provision of Energy Efficiency Solutions

Renewable Energy Supply Chains

Exploiting Waste Heat Opportunities

Waste to Energy projects

Wind Energy on Industrial Estates

Low Carbon Products for Construction &

Engineering Sectors

Decarbonising electricity supplies

The Applied Research Grant

We are endeavouring to encourage and support the progress of low carbon technologies towards large scale deployment.

We aim to support activities that contribute to the development and commercialisation of technology with the potential to reduce UK carbon dioxide emissions. – “the path to commercialisation”

We offer grant funding up to £500k for applied research leading to low carbon products or services – Unlikely to fund projects with total value of less than £50k

We expect all the partners to make a contribution to the cost of the work– Cash or “in-kind” - In-kind contributions have to be ‘fair and

reasonable’

Open to all organisations including businesses, universities and individual innovators

Proof of Concept

First Prototype

Testing and Development

Large Prototype

Commercial Unit

Technical Risk Investment

Applied Research

EPSRC

Post Doc

PhD’s

TSB

Product Development

VC

Bank Loans

Business Risk

Carbon Trust Applied Research Space

Supporting low carbon innovation in Northern Ireland

Willis Renewable Energy Systems - Solasyphon – Highly innovative solar heating system– 2009 Rushlight Award in the innovative solar

technology category in LondonApplied Research Grants – 70% successful so far in either:

– Secured follow on-funding – Filed patents, – Generated sales (or expected to do so shortly)

Seen as “Investor of Choice”Next R&D Open Call: 16th February – 16th April 2009

Conclusion : Where does your company sit?

Source: Carbon Trust and McKinsey & Co. analysis

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Company value-at-risk (%)

Towards a Low Carbon Future – Opportunities for Business

The contents of this presentation are the copyright of the Carbon Trust and may not be copied or republished without the prior written consent of the Carbon Trust. The trade marks, service marks and logo used in this presentation are the

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The Carbon Trust

Northern Ireland Science Park

The Innovation Centre

Queen's Road, Queen's Island

Belfast, BT3 9DT

Tel: 02890 737919