Net Zero; Increasing focus on Energy Transition- in conversation with Martyn Lyons. 

By Martyn Lyons and Isabella McKenzie-Sanchez

Diversifying the Energy Portfolio 

As the world collectively strives towards achieving net-zero carbon emissions, the focus on the end goal often overshadows the intricate journey of the energy transition process. In this article, we explore the need for a more nuanced approach to energy transition, emphasising emerging technologies, alternative fuels, and the coexistence of these solutions as sustainable resolutions with measurable impact. Merger and Acquisition services (M&A) can be seen as a catalyst for positive change, as through expert market research and integration support, they can empower companies to effect sustainable and successful transformation. 

Whilst there is ambition, and indeed fundamental need, to achieve Net Zero; for us to reach it, it is crucial to increase focus on the transition journey itself. Governments and stakeholders must prioritise the development, implementation and use of sustainable practices, technologies, and policies that facilitate a smooth transition. This means not only setting and regularly revisiting ambitious targets, but also ensuring that appropriate legislation is implemented, and the necessary infrastructure and support systems are in place to move towards them.  

The potential of HVO and alternative fuels 

The landscape of energy transition is teeming with innovative products and alternative fuels that warrant a closer look. For example, Hydrogenated Vegetable Oil (HVO) presents a unique opportunity to reduce carbon emissions in Diesel engined vehicles and marine vessels. HVO offers a cleaner, more sustainable option for traditional diesel, significantly reducing greenhouse gas emissions. The real benefits of HVO, including its use as a direct drop-in replacement for diesel fuel, improved combustion efficiency and up to 90% lower emissions, make it a compelling and obvious choice in the broader landscape of alternative fuels. However, despite its promising qualities, the lack of recognition and incentives from the UK Government hampers its widespread adoption, compounded by its current costliness compared to regular diesel. 

 Combining this with the Electrification of Vehicles 

As we explore alternative fuels, it is imperative to consider their integration with the electrification of vehicles. Striking the right balance between electric vehicles and those powered by alternative fuels is key to a seamless transition. A comprehensive strategy that acknowledges the strengths and limitations of each approach will pave the way for a diverse and resilient transportation sector. This transition is slowed by the government’s recent decision to delay the introduction of its ban on the sale of new internal combustion engine (ICE) cars and vans by five years to 2035. This ban exemplifies the lack of infrastructure in place to support the roll-out of transformative change, which leads to the delay of tangible results. 

Harnessing the Power of Renewable Facilities 

Beyond fuels, emerging energy transition technologies like solar panels, air source heat pumps, and ground source heat pumps have proven their efficacy. These technologies are not futuristic dreams but present-day solutions contributing to sustainability. Governments should also encourage widespread adoption of these technologies to further the transition to a cleaner, greener energy landscape. 

Celebrating Successes and Aligning with Global Commitments.  

The National Grid stated that Zero-carbon power in Britain’s electricity mix has grown from less than 20% in 2010 to over 50% in February, May, October, November, and December of 2022. This is encouraging news; however, there are more urgent measures needed to replace aging nuclear power plants and continue to meet growing energy demands sustainably. Incorporating elements from the Paris Agreement, it is crucial to emphasise the global need to limit temperature increases to below 1.5°C. Governments play a pivotal role in incentivizing and legislating the use of sustainable energy solutions. By aligning policies with international commitments, we can create a conducive environment for the rapid adoption of cleaner technologies. 

What can M&A do? 

M&A services play a pivotal role in in supporting transitions of businesses from traditional energy backgrounds who are looking to expand their portfolio and head towards a renewable future. M&A experts can identify strategic partnerships and potential acquisitions that align with a company’s renewable energy goals, by conducting thorough market analysis and due diligence, they enable businesses to navigate the complexities of the renewable energy landscape, identifying opportunities for growth and sustainable practices, as well as developing integration plans, and ensuring a smooth assimilation of new technologies and processes. This proactive approach not only enhances operational efficiency but also positions businesses in the forefront of the evolving renewable and sustainable energy industry. 

A Need for Comprehensive, Progressive, Action 

In conclusion, while the pursuit of net zero remains a paramount and fundamental requirement, the actual journey towards its achievement through sustainable energy transition requires accelerated focus and attention. Governments and stakeholders must collaborate to explore, invest in, and implement a diverse range of solutions. By celebrating successes, addressing challenges, and aligning with global commitments, we can and must pave the way for a more sustainable and resilient future.

By Martyn Lyons and Isabella McKenzie-Sanchez  

Martyn Lyons is a UK Associate Partner of Global PMI Partners and an industry expert in the Tank Storage and the Energy Sector. Martyn was Chairman and Director of the UK Tank Storage Association (TSA) for over 10 years and is now a non-executive director of TSA. He has significant experience of working within UK PLC framework, Private Equity Ownership and International Listed Company Ownership.  

Isabella McKenzie-Sanchez is a writer and the Sales, Marketing, and Communications Manager for Global PMI Partners.  

Global PMI Partners is a specialist consulting firm supporting our listed company and private equity clients with their inorganic growth strategies and M&A integrations and divestments. We provide expert, on-demand M&A services and resources, leveraging our market leading M&A approach & methodology. With a track record of over 500 operational due diligence, acquisition integration, divestment, carve out and growth projects utilising our UK team of 170 seasoned professionals (400+ globally, across EMEA, North America and APAC), Global PMI Partners is adept at helping our clients achieve the desired value from both acquisition and divestment strategies.