Gresham House: Sky-high energy prices reshaping prospects for net-zero strategies
In the political landscape of the United Kingdom, the opposition party Reform UK, led by Nigel Farage, is making strides, having secured seats in Parliament and achieving significant success in local elections. The party aims to challenge the Conservative Party's dominance as the main right-wing force, with Labour, under Prime Minister Keir Starmer, currently holding the governing position.
Meanwhile, traditional farming faces a challenging environment due to increasing costs of fertilizers, energy, and labour. In contrast, the UK's vertical farming sector is innovating to overcome these hurdles. Peter Bachmann, Managing Director of Gresham House's sustainable infrastructure division, believes that the high electricity costs in the UK can be addressed by seeking alternative solutions and leveraging renewable energy sources as a competitive advantage.
Bachmann suggests that the UK has abundant wind and solar resources, but the key lies in creating enabling conditions for these resources to work effectively. This includes making better use of energy storage through the increased use of batteries. He argues that renewable energy, often perceived as expensive, is actually very cost-effective compared to other energy sources.
Gresham House's vertical farming operation is a testament to this, as the cost of power for their facilities is decreasing due to the installation of on-site solar and the implementation of efficiency measures and AI tools. In comparison, a similar vertical farming business being built in the Middle East enjoys electricity costs as low as 2p per kWh, compared to approximately 25p per kWh in the UK.
The high power prices in the UK are not only affecting the vertical farming sector but are also hindering industrial production, as stated by Bachmann. He advocates for bringing all costs and benefits of the transition to renewable energy into the open and letting people decide.
Sustainable companies, like Gresham House, are not just contributing to a greener future but are also proving to be profitable ventures. Bachmann believes that sustainable companies can create impact without detracting from returns. In fact, they can enhance returns, protect companies from the risk of additional tax or regulation, and offer superior products.
However, sustainable investments come with their own set of risks, such as political risks associated with changes in government policy. Allocations to sustainable real assets are long-term investments, and a change of government could lead to a radical change in net zero policy.
The British Sustainable Infrastructure Fund (BSIF) co-fund manager notes that high power prices are due to costs embedded in them, including direct and indirect subsidies to the oil and gas industry and balancing and non-commodity costs. Bachmann emphasizes that sustainable companies can help to change unsustainable industry practices and produce at or below the price of field-grown crops, while also reducing carbon emissions by up to 1,900 times less compared to long-haul imported produce.
Vertical farming uses 95% less water, 99% less land, and no chemicals and pesticides, making it a more sustainable and efficient farming method. The produce from vertical farms also lasts 14-21 days longer, offering fresh produce year-round. As the world grapples with rising costs and the need for sustainable solutions, vertical farming could be a key player in the future of agriculture.
Read also:
- Understanding Hemorrhagic Gastroenteritis: Key Facts
- Stopping Osteoporosis Treatment: Timeline Considerations
- Tobacco industry's suggested changes on a legislative modification are disregarded by health journalists
- Expanded Community Health Involvement by CK Birla Hospitals, Jaipur, Maintained Through Consistent Outreach Programs Across Rajasthan
