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Study Names Utilities Best Placed to Improve Corporate Customers’ Sustainability

EDF Energy, E.ON, Centrica and RWE npower are the utilities best positioned to help companies in the U.K. make their energy supply more environmentally friendly, according to a new report.

The study by independent analyst Verdantix compared 13 power utilities operating in the U.K. on 37 assessment criteria, including their provision of green electricity contracts, sustainable gas contracts, on-site renewable energy and heat generation, energy management implementation, and carbon and climate change legislation advice. Verdantix also assessed the companies’ corporate sustainability and low-carbon energy strategies.

Firms in the study included Scottish Power, whose parent company Iberdrola owns utilities serving more than three million customers in the U.S., and also operates one of North America’s most active wind power developers.

The report is based on in-depth interviews with a panel of 15 senior decision-makers with responsibility for selecting power utilities, in eight industries. Verdantix also interviewed leaders from utility firms.

“The fuel mix of power utilities in the UK gets a lot of attention from environmental commentators, but for Heads of Energy or Chief Sustainability Officers responsible for sustainability strategy it’s just one part of the picture,” said Verdantix analyst and report author Vanessa O’Connell.

She said that 73 percent of Verdantix’s customer panel said that carbon and energy management was the major sustainability issue for their firm. Rising energy prices and the U.K.’s Carbon Reduction Commitment are driving companies to increase their spending on energy efficiency, energy management technology and climate change advisory services.

The study found that the demand for energy management services is transforming utilities’ business models. All the utilities have energy services teams, Verdantix said. Centrica launched a separate business division, Energy 360, in 2009, which has grown to 500 employees through four energy services acquisitions in 2010. E.ON’s Sustainable Energy business team has grown forty-fold since 2007.

The reported noted that the head of RWE npower’s sustainability program reports directly to the CEO, and EDF Energy has committed to reduce the intensity of its CO2 emissions from electricity production by 60 percent by 2020, against a 2006 baseline.

Leading companies also tend to make strategic investments in innovation, such as E.ON’s pilots of wave, tidal and sustainable gas projects, and Centrica’s accelerated smart meter roll-out plan.

The report also found that five specialist utilities – Good Energy, GDF Suez UK, Ecotricity, Scottish Power and SmartestEnergy – have focused on low-carbon energy supply by maintaining above-average compliance with the country’s Renewables Obligation. Good Energy’s assets are 100 percent renewable, and Ecotricity re-invests all its profits in solar and wind firms.

Other companies in the study included Gazprom Marketing and Trading Retail, Haven Power, Scottish and Southern Energy and Total Gas and Power.

In related news, a report says that the proportion of “zero energy” buildings in Europe will increase quickly over the next few years.

The report from Pike Research says that energy service companies (ESCOs) will expand rapidly as the European Union makes a push for all new buildings and major renovations to be nearly zero energy by 2021. The ESCO market will increase from $11.9 billion in 2010 to $18.4 billion by 2016, a compound annual growth rate of 7.5 percent.

“The ESCO business is evolving quickly in Europe,” industry analyst Levin Nock said. “This group of companies will be extremely important to the implementation of the European Union’s vision for energy efficient buildings. The goals may be driven by mandates, but many of them will be executed by the ESCOs.”

Currently, less than 1 percent of Europe’s 30 billion square meters of buildings is green-certified, Nock said, but certification should more than triple to 687 million square meters by 2016.

The energy efficiency markets in Germany and France are about as large as the combined market of the rest of Europe, Pike said.

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