Smart Energy Finances: Decarbonisation purchasing moves up the ESG agenda

This week’s edition of Smart Energy Finances sees a new study from BDEW and CapGemini detail how sustainable transformation and decarbonisation purchasing are more important than ever for Austrian and German utility Encironmental, Social, and Governance (ESG) goals.

Also of interest is new debt financing for 80 microgrids in India and a successful Series A for Silicon Anode Lithium-ion (Li-ion) batteries, aiming to bolster the market in Europe.

ESG for utilities: decarbonisation on the up

A new study by BDEW – the German business organisation for the energy and water industry – and Capgemini Invent, the consulting unit of the Capgemini Group for digital innovation, transformation and design, alongside the Austrian Energy Association, finds that the majority of companies are pursuing approaches to sustainable transformation, half also in purchasing for decarbonisation.

BDEW Capgemini Study Sustainable Purchasing 2022 finds that for 37% of the German and Austrian utility companies surveyed, purchasing and sustainability departments are jointly pursuing the goal of reducing emissions in purchasing and achieving other sustainability goals.

The majority take a critical view of the economic and political framework for sustainability measures in purchasing or in materials management in their company: 61% perceive challenges, although 51% have already considered new sustainability measures in purchasing.

Tools can play a key role in successfully scaling these and enabling holistic ESG reporting at company level. However, only 43% pursue sustainability ambitions with their help. These are mostly tools for collecting emissions; 25% use tools that are specially designed for purchasing.

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At the operational level, it is crucial for the decarbonisation of purchasing that the guideline takes sustainability criteria into account.

This is the case with every second energy and water supplier (48%) and is planned for another 20%. 32% include sustainability aspects in the evaluation of the suppliers; another 25% are preparing for this.

The basis for this is knowledge of the extent to which suppliers meet certain ESG (Environmental, Social and Governance) criteria. Based on this, 30% of the companies surveyed can apply sustainable award criteria. Another 24% are working on it.

The authors of the study recommend that decision-makers in purchasing emphasise transparency regarding emissions of purchased goods and services and systematically record the social risks of the suppliers.

Decarbonisation tools and technology solutions for ESG risk management and CO₂ accounting can be integrated into the company’s system landscape and support purchasing in sustainability processes as well as in governance and change management.

Last week’s column: Smart Energy Finances: SMS smart meters lift dividends and €15.1bn EIB green financing

Microgrid debt financing

Husk Power Systems, operator of solar-hybrid microgrids across rural Asia and Africa, will electrify 80 communities in India with $6 million in new debt financing from the EU-funded Electrification Financing Initiative (EDFI ElectriFI).

The long-term $6 million debt financing is cited by EDFI ElectriFI as a clear indication that investing in developers like Husk allows de-risking financing facilities to scale the market at speed.

The 80 solar microgrids will benefit an estimated 60,000 people and connect 10,000 new customers.

It will allow Husk to double its customer base of micro, small and medium-sized enterprises (MSMEs), which drive rural economic activity but still rely heavily on polluting and expensive diesel generation. The new microgrids will displace a significant amount of diesel generators, avoiding the equivalent of 11,640 tons of CO2.

Prior to the EDFI ElectriFI debt, Husk Power had up to 150 net-zero microgrids in operation in India. Husk is also present in Nigeria, with plans to further expand in Sub-Saharan Africa.

Series A for silicon Li-ion battery anode

GDI, a researcher and manufacturer of 100% silicon anode technology for Li-ion batteries, has completed a major Series A funding round and begun pilot production in Europe.

The completed Series A is hoped to position the company to play a major role in battery manufacturing within the energy transition.

GDI has now established European pilot production in Eindhoven, the Netherlands, with 300kWh production capacity expected to be online by the end of 2022. With this fresh injection of funding and planned strategic partnerships, GDI expects to scale production to over 100MWh by Q1 2024.

According to GDI, silicon is unique in that it can store vast amounts of Li-ions at rapid speeds, enabling sub 15-minute charging speeds and EVs with over 500 miles of range. Original Equipment Manufacturers (OEMs) are able to use less than 10% of silicon today. 

GDI has over 10 US patents and over 25 pending patents globally, in various stages.

The company further states that it has tested multi-layered pouch cells that can charge from 10-75% state of charge in just 15 minutes over 600 times in a row without plating lithium or failing, without added compression or added lithium as competitors require.

They also cite the tech’s scalability and are making anodes on industrial solar and glass manufacturing equipment that is in use worldwide at volumes of millions of square meters per year.

For this and more updates on the finance and investment scene within the energy transition, make sure to see and follow our weekly column, Smart Energy Finances.

Cheers,

Yusuf Latief,

Content Producer, Smart Energy International