Navigating the route to net zero: small businesses, big changes.
Earlier this year I set out three priority areas for Sheffield Technology Parks (STP) in our Overview and Impact Report 2023. One of these is ‘Targeting net zero’, under which I described our ambition to align ourselves with Sheffield’s target to be net zero by 2030. I asked the question: how can we take a building comprised of an 1800s Cutlery Works, 1980s new build and early 2000s refit and create an energy efficient building our clients can be proud to call home?
As we try to understand what net zero means for a small business like us, big challenges are presenting themselves. My point in writing this post is to share and explain these specific challenges, which may be helpful for other SMEs heading in the same direction.
Where are we?
Before I delve into the details of our net-zero strategy, I need to reflect on where we currently stand. We need to reduce our carbon utilisation as soon as possible, so I've commissioned a consultancy firm to undertake a high-level review of the necessary steps.
We occupy an 1800s building, which was renovated in the 1980s and further upgraded in the early 2000s. So a fairly grim mixture of insulation and building standards combined with lots of (old) windows, external walls and open circulation areas. Our current gas and electricity use is high, although nothing compared to heavy industry.
The main source of our Scope 1 emissions comes from the way we heat the building. One immediate priority is to transition away from our gas-fuelled heating system. This is twofold – it’s not a sustainable source of energy for the long term; but we also have a horizon challenge in that our long term five year fixed contract is up for renewal in 2024. Prices have fallen from their peak last year, but I’m still faced with a 300% increase in costs compared to our current tariff. Numbers like that really pull your attention into focus!
We're exploring several options, each with its own set of complexities and costs:
-Connecting to the District Heating Network seems like the most obvious choice as the pipes run past our car park. However, after undertaking a survey and detailing the groundworks required, the expense of connecting to this complex infrastructure has made it unviable for us at nearly £400k.
-A comprehensive heating and cooling AC system upgrade, including replacing our aging kit, comes at a cost of approximately £250,000.
-Partial AC and Electric Heaters would be a compromise solution and is more affordable but still requires an investment of nearly £200,000.
-Gas Boiler Replacement: Although simpler, replacing the boilers with electric ones doesn't resolve the issue of our aging 250 radiators. It would also pose the challenges in coordinating radiator and pipework upgrades alongside 35 businesses sharing the space.
The Scope 2 emissions - where the energy is generated - is a consideration for all of the above options. In all cases, I need to consider the emissions associated with the entire life cycle including manufacturing, installation, operation, maintenance, and disposal or recycling. The environmental impact of each option needs to be considered in the context of our current electricity source from biomass burning too. Not a simple calculation!
In addition to addressing our heating system, we recognise the importance of upgrading our building's insulation. Wherever the heat is sourced, being able to use less should be a priority. This includes upgrading windows to prevent heat loss. However, our unique heritage as a converted cutlery factory in Sheffield's conservation area presents some hurdles. Replacing heritage windows on just one of the eight elevations costs approximately £280,000, which is less than a third of the total 275 windows around our building.
Bringing our community with us
The tech businesses we work with face their own challenges. Vast amounts of hardware used generates significant amounts of e-waste as we refresh our devices every couple of years. Additionally, choosing which providers to use for software and storage can be a challenge. Recent estimates suggest ChatGPT alone needs around 250 MWh/day as the running energy consumption to satisfy daily queries. It seems as more of our lives become dependent on technology, we're often blind to the environmental impact such developments have.
We're not only committed to making our building more environmentally friendly but also to encouraging our community to adopt sustainable practices. We've recently upgraded our shower facilities, and we're now working towards creating a bike hub with lockers, changing rooms, and mechanic facilities to further incentivise greener commuting options. Electric vehicle charging points will be part of the mix too. This effort aligns with our commitment to reducing Scope 3 carbon emissions and includes considering how our clients travel to work at Sheffield Technology Parks.
What does this mean for the wider economy?
I hope this information has been or will be useful in the future to other small organisations that are working towards net zero.
What I have shared does also serve to highlight a far bigger problem – If it's going to cost Sheffield Technology Parks approximately £1 million to make significant progress towards net zero, what does this mean for the wider economy? Small businesses, like ours, may struggle to find the financial resources and resilience to invest in net zero if the investment doesn't promise a tangible financial return.
Eye-watering levels of support and incentives from government, perhaps as soft loans or grants, will be needed to make the transition feasible for businesses of all sizes. And to achieve ambitious - but necessary - net zero targets, the support has to come quickly.
If you've read this and want to discuss your own experiences I'd be keen to understand what challenges you're facing, and what your plans are to overcome them.