National Grid lights London by night ©urbancow
National Grid lights London by night ©urbancow

Case study: Building carbon savings into tendering

1 September 2017

The company powering Britain is working with suppliers to improve sustainability and lower costs

As the organisation in charge of keeping the UK’s lights on and hot water running, National Grid needs to consider climate change more than most. But the company isn’t shirking its responsibilities – and it’s making sure the contractors in its supply chain aren’t either.

The infrastructure National Grid builds – everything from transformers to electricity pylons and power lines – can make a big difference to the country’s carbon footprint. In 2008, it set a target to reduce its carbon footprint by 45% by 2020 and by 80% by 2050.

Meeting this ambitious target means actively engaging with suppliers, says Alison Fulford, carbon adviser in National Grid’s capital delivery team. “If your supply chain is not [engaging with this agenda], you will be putting lots of work back on yourself to hit your targets,” she points out. “It’s about raising this as a priority.”

To get suppliers thinking about carbon emissions, National Grid has built measurement and reduction into its tender process. Suppliers are asked to use an in-house carbon footprinting tool, tailored to the project, and to complete a quantitative assessment of the projected carbon impact of their design solution.

So far, 25 of the company’s biggest suppliers have been trained in using the tool, and a number of events have been held to spread the message.

Critical to success, says carbon adviser Terry Ellis, is asking the right questions of suppliers during the tendering process. “Think about what it is you really want to ask,” he advises. “Don’t be fluffy, or you will get fluff back. Be specific, and focus on the most important parts of a project.”

Being specific has allowed National Grid to make sure it is using the right equipment for each project. A recent tender for electrical switchgear revealed differences in both carbon emissions and the operational efficiency of different makes and models of the same equipment.

The collaborative approach is paying off. To date, more than 20,000 tonnes of carbon dioxide equivalent have been avoided by choosing lower carbon products and services. On one tender, such an approach identified savings of £3m. These results have also seen National Grid win an award for environmental leadership at the recent Business in the Community Responsible Business Awards.

Going forward, the aim is to embed sustainable thinking throughout the wider business and supply chain. “It’s making people see that considering sustainability and the environment will help them do their jobs,” Fulford says. “For suppliers, it can give them a competitive edge.”

Ellis cites one supplier who recently didn’t score well on carbon efficiency and then asked National Grid for help to improve. “That was a moment for me, where I thought: We are really changing people’s views.”

Carbon reduction in action

In February 2011, National Grid began a seven-year project to upgrade the cables and wires below London. To do so, it needs to build and upgrade substations. One, in Wimbledon, was the first tender at National Grid to include a weighting on carbon. The winning bid, which demonstrated a 23% carbon reduction and £3m cost saving, was awarded to Laing O’Rourke.

The carbon saving is equivalent to taking 7,600 cars off the road for a year. The cost and carbon savings came from identifying more efficient equipment and reducing the amount of insulating gases used.

More sustainable materials, such as low-carbon concrete and recycled steel, were also used. The success of the project means National Grid has put a target in place to put an internal price on carbon used in major projects by 2020.

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