Ep 4: 'My business cuts carbon: That's what motivates me'

ZLC Energy’s Mark Smith on running a sustainable business that fits just about every renewables solution going

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Mark Smith, co-founder of ZLC Energy
Source: ZLC Energy

In this week’s episode, we return to Cornwall to meet Mark Smith, co-founder and executive director of ZLC Energy, a multi-technology renewable energy company based in the South West of the UK that recently achieved B-Corp accreditation. He is a Chartered Engineer, Chartered Environmentalist & Chartered Water and Environmental Manager who is hugely passionate about going to work every day and installing technologies and solutions that cut carbon.

From riding the ‘solar coaster’ to finding financial & career sustainability

Mark started as a water engineer doing restoration work on the Thames Barrier system almost 20 years ago, before building BREEAM-certified buildings for the Environment Agency, and then riding the ‘solar coaster’ – an epithet that captures the wild swings in industrial policy support for the solar sector in the UK – to the South West.

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During the conversation, Mark reflects on the importance of flexibility and adaptation in running a sustainable business, specifically as regards how the abandonment of the government’s Code for Sustainable Homes – an agenda launched in 2007 that included incentives and a rating system through which to encourage the building of more sustainable new homes – left him needing to pivot towards a business model that remained sustainable irrespective of vacillating policymakers (or changes of government).

“You can gear your business up to service incentive mechanisms thinking they’re going to mobilise a lot of customers, and almost as soon as they start, or even just before, they get cut. So to have a sustainable business, don't follow those incentive mechanisms, sell on the merits that [your offering] has irrespective.” 

ZLC Energy, the company Mark later co-founded in Liskeard, Cornwall, now employs about 30 people and brings a diverse range of renewable heat and power expertise to bear on the UK’s carbon-cutting challenges.  

Its stable of competencies runs the gamut from solar PV through hydropower and biomass boilers, because as Mark says, “If we're going to achieve Net Zero, you need the range. There's not a one-size-fits-all solution, and quite often it's a palette of those that will fit a particular customer.”  

Mark also gives the lowdown on heat pumps, including what determines air-source versus ground-source suitability, and how climate emergency declarations at large institutions like universities and corporate social responsibility (CSR) commitments are driving (under-reported) commercial demand. 

Finally, we explore the challenges of hiring and retaining the necessary skills in a market where demand for electricians and plumbers is already through the roof, and how basic maths suggests that if we want to electrify everything we need at least 10x renewable power capacity. 

Community catch: 

While secondary to Mark’s current focus, we touch on how things are looking for London’s flood defences and the Thames Barrier system. We won’t try to predict what will happen as records are broken for sea ice / glacial melt and sea level rise, but you can model scenarios with this very interactive global coastal risk screening tool from non-profit Climate Central. You can also make your own decisions about whether and when cities like London will need to update their flood mitigations, starting with this excellent explainer from the Tyndall Centre of plans already in place for London looking forward to 2100.  

Read the transcript:

This text is exported from an audio editing platform and lightly edited. We apologise for any discrepancy with the final audio recording and for grammatical errors.

Nate: Hi, I'm Nate Maynard, and I'm here with Mark Smith, the founder of ZLC Energy. ZLC Energy, for people outside the UK, is a renewable energy installer and developer. You do all types of fossil fuel-free heating and energy.

Mark: Yeah, we cover all renewable power and renewable heating technologies. We work from cradle to grave, really, helping companies develop their net zero strategies across their portfolio of buildings, designing, specifying, installing, operating, and maintaining those technologies.

Nate: So, Mark, how big is your company?

Mark: We employ 25 full-time employees and about 30 including part-time staff.

Nate: Have you always been involved in energy and this kind of work?

Mark: No. My training is as a water engineer. I worked predominantly in the engineering elements of habitat restoration for rivers and flood defense. I ended up working in the southeast covering the Thames Barrier System, out into the ocean, in Essex, Kent, and the North Kent coast, all the way around East, West, and East Sussex, Hampshire, and into the New Forest and Dorset.

Nate: This is tangential, but how at risk is the Thames Barrier from sea level rise due to climate change? Could it flood that whole area? I looked at some sea level rise maps, and I live in that predicted flooding zone.

Mark: Doing the Thames Barrier system restoration is a system. It's not just those gates you see on TV. We were refurbishing it from its original 70s and 80s build to extend its life to 2035. But this was in 2005, so that was a good 30 years ago.

Nate: A lot has happened since then.

Mark: A lot of stuff has happened since then. This was relatively early on in my career, and I haven't been involved in that since 2010.

Nate: How did you transition into water engineering?

Mark: I was employed by the Environment Agency, and I built some buildings for them that were sustainable, like we measure commercial buildings on how sustainable they are with BREEAM. I built some BREEAM excellent buildings for them, specifying heat pumps, PV, high levels of insulation, and modular buildings, often using recycled materials.

Nate: Is that sort of like LEED in the US, maybe a green building certification?

Mark: Yeah, a similar sort of thing.

Nate: So you did that as part of your work?

Mark: Yes, from 2006 to 2008. I developed a passion for sustainable building. The government at the time introduced the Code for Sustainable Homes, aiming for all homes in Britain to be zero carbon by 2016.

Nate: And then what happened?

Mark: A different government came in and killed it.

Nate: As they tend to do.

Mark: Good ideas often get squashed. So I moved down here to start a sustainable building company to service that market. Almost immediately, that market got shelved. However, what remained was the feed-in tariff for PV. I had secured the feed-in tariff for initial buildings, set up relationships, and with my co-founder, provided solutions for renewables. We then delivered our own ground-mount solar projects across the UK.

Nate: Building your company out through that. But now there's no more feed-in tariff for solar. How did you navigate that transition?

Mark: What was in place then was a feed-in tariff, and the Renewable Heat Incentive and Green Deal were on the cards. Now, all those incentive mechanisms are gone, but that's okay. These mechanisms kickstart an industry. The solar PV industry, for instance, was boosted by the feed-in tariff and is now rolling, despite some bumps along the way, often called the "solar coaster."

Nate: The solar coaster?

Mark: Yes, because it was massively up and down. The same thing happened with other schemes. You can't base a sustainable business solely on these incentives. You have to sell the technology on its merits. People still buy luxury items that are not necessary. What we sell is necessary, and many people are committed to doing it because it's the right thing to do.

Nate: What are the main products you sell? What are people most trying to develop?

Mark: We have the competencies to install solar PV, wind turbines, combined heat and power systems, and hydro. In terms of renewable heat, we install heat pumps, solar thermal systems, and biomass boilers. Achieving net zero requires a range of technologies because there's no one-size-fits-all solution. Often, it's a combination of these that fits a particular customer.

Nate: How many heat pumps are you installing, and what is that process like? I think a lot of people are curious about what a heat pump is and whether they can have it in their home.

Mark: We install typically between one and two heat pumps a week domestically and about five commercially. It's not vast volumes. Being honest, people need to consider it for new builds, where it's a no-brainer because you can put the infrastructure in place from the start. In a retrofit scenario, the cost and complexity increase because you have to adapt the heat distribution system, such as radiators, to the lower temperatures that heat pumps operate at efficiently.

Nate: What about ground source heating?

Mark: Ground source heating involves putting heat exchangers into the ground, which is disruptive and costly. Air source heat pumps are more affordable and are efficient for climates like the UK's. Ground source heat pumps are more efficient but are better suited for new builds where you can plan for the necessary groundwork.

Nate: In the UK, what percentage of new builds are coming onto the market as zero carbon or low carbon?

Mark: Most new builds are driven by building regulations, so you could say 100% are low carbon to some extent. For deploying heat pumps, I'd say around 50%. Ground source installations are less common and tend to be in self-builds rather than commercial estate builds.

Nate: That goes back to the cost element.

Mark: Yes, but more high-rise and communal living spaces are adopting ground source because the economics are better in those scenarios.

Nate: Is there hope for places like Canary Wharf adopting these technologies?

Mark: Yes, especially in new builds where disruption is less of an issue.

Nate: Here in the UK, there's no incentive for solar PV?

Mark: No, it's purely based on energy cost savings because you'll consume your own energy. There is a smart export guarantee for any excess energy you put back to the grid. The payback on solar PV at a domestic level is about seven to ten years. Commercially, the return on investment can be around 20 to 30%, sometimes under three years.

Nate: Has the energy crisis impacted your business? Are more people looking to switch from gas due to high prices?

Mark: Yes, particularly for renewable heat. There's the Boiler Upgrade Scheme, which offers grants for heat pumps and biomass boilers. This helps offset the initial capital costs and encourages people to switch.

Nate: What would you want people to know about heat pumps and related policies?

Mark: Take advantage of the Boiler Upgrade Scheme if you're planning to change your heating system. It's a good time to make the switch, especially if you're doing a refurbishment. We need to remember our target to reach net zero by 2030 to 2050 and take action now.

Nate: What about commercial clients?

Mark: We deliver more work for hospitals, universities, and large logistics companies. Universities, for instance, have climate emergency targets, which are important for their reputation and for attracting students. Commercial clients are often driven by corporate social responsibility, shareholder demands, or customer requirements.

Nate: What are the types of solar installations you most commonly do in Cornwall?

Mark: Cornwall has a high irradiance and good wind resources. We've done a lot of solar farms, but typically we supply the behind-the-meter market, directly to customers, rather than servicing the grid. This approach gives customers immediate energy savings. We do a lot of rooftop solar for hospitals, universities, and other buildings, dealing with various types of roofs.

Mark: Straw, straw. Well, funnily enough, that's not a ridiculous comment, right? So there...

Nate: I've seen some straw roofs here.

Mark: Yeah, there's... There's thatch, which is one thing. It's a domestic type of building. But, we did have a product for a while called Straw Mit, which is like a roof structure built with insulation using straw. We end up putting it on flat roof structures. Which we do put PV on.

Nate: You got me out of that question.

Mark: There you go, yeah, yeah. In terms of thatch on people's residential properties, no. That would be a nightmare.

Nate: A fire risk and...

Mark: Just, we'd make loads of holes in it. I don't think there's a system that would work with that.

Nate: Mostly rooftops then, not...

Mark: Rooftops. We do ground mount too. For customers, up to a megawatt ground mount or car ports. But typically, the first step is all rooftop because it's better value.

Nate: We've been speaking to people about renewable energy, heat pumps, the whole net-zero package. They've been highlighting the fact that there's a skills shortage. There's not enough people who know how to install heat pumps, or solar, or those types of energy solutions. You run a business and have to hire people. Are there enough people out there who have the skills you need? Do you have to train people? What's the green skills shortage?

Mark: I'd say, yeah, there is a skills shortage. We struggle to get electricians with the right caliber for the renewable heat sector. Not necessarily the right caliber, but maybe the experience or the appetite. There's such demand across the construction sector for electricians. What we do is slightly more challenging. You have to have an appetite to be challenged. A lot of what we do is commercial plant room stuff. There's a skills shortage in that industry in general, let alone within the renewable energy industry. Same with plumbers. Plumbers are in demand anyway. Then you want to upskill them to do heat pumps, which can be done. It's slightly different technology. It involves more fastidiousness. Attention to detail is really important. The technology is advancing fast, and the training centers aren't catching up.

The training centers should be leading the way. That's where government policy has messed things up. Flip-flopping between, "Yeah, it's a great idea," and, "No, it's not a great idea." People respond to a consistent, "Yes, it's good," and can plan for that. When they take the foot off the gas, those training centers that have set stuff up end up failing. People need to have that confidence to go down that route. Same with training. Why retrain if you think it's not going to be a consistent direction of travel? So, we tend to recruit people with the passion for renewables, with a base skill set, and then train them up.

Nate: So you're doing the training in some cases?

Mark: We do the training, yeah. That's supported by product manufacturers and training houses. But securing those skills in the first place is interesting. Retention is a challenge because there's always the pull of a slightly easier world of standard plumbing or standard electrics. We find people get tempted away by that. Pay scales are pretty competitive, which is good because people can earn well. That's a good reason to get into the industry, and we can train people. But you need to be passionate about the technology.

Finding people who have the passion to cut carbon. We're not just recruiting based on financial packages or employee packages. There needs to be a commitment to the ethics of the behaviors to make it the right fit for both employee and employer.

Nate: Make it the right fit for both employee and employer.

Mark: Whatever the government does, this is the direction of travel. We need to take action on how we power and heat ourselves in a more sustainable way. If you want a long-term career option, then plumb for it. It's really interesting. At the end of each day, we go home knowing we've cut another chunk of carbon.

Nate: Tangible progress, secure line of work. That sounds pretty...

Mark: Yes, and it's good fun. It's diverse. Every time I've revisited what I should do, a chunk of my life was ecology or water engineering. I've really enjoyed that. It's nice to hang out doing ecological work. But every time, we need to cut carbon.

Nate: The next decade.

Mark: It's just carbon. My business cuts carbon. That's what we do. And that's what motivates me. I'm also buoyed by the commercial sector, which wants to do it.

Nate: Seeing them take it seriously?

Mark: Yeah, irrespective of what Rishi Sunak says, business leaders will be doing it anyway. That's not necessarily what's reported, but that's great.

Nate: That's why we're here. But if you want to say more on wind...

Mark: Wind is much more viable for commercial customers. Let's take you to net zero, see what your demands are now, and chunk bits off it with different technologies. Solar is always going to be there, but wind is always going to be there too. Solar works in the summer, and wind works in the winter. Solar works in the day, and wind works at night. Wind is the better technology with a smaller footprint. We've been stopped for seven, eight years in the UK from deploying onshore wind, but onshore wind is, by the government's own reports, the cheapest form of energy there is.

Nate: Why was onshore wind stopped?

Mark: Because some people think it spoils their view. Polls show that everyone of a certain demographic wants it, and another demographic doesn't. We need to start listening to the people who will inherit this place in the future and deploy more wind.

Nate: For your commercial clients, what does onshore wind mean? Are you putting a wind turbine on top of their factory, or are these wind sites some distance away?

Mark: We have industrial estates with turbines on them. That's a great idea. Just like having industrial estates with solar on their roofs. Why not? You're not going to make them any less attractive.

Nate: Really?

Mark: Yeah, they're beacons of hope. We can do this stuff. There's always a wind element in solutions for commercial customers, but there's a barrier to deploying that in the planning system. Polls show 70-80% support for onshore wind. It's the cheapest technology. It's zero carbon. Why not?

Nate: That's a lot of support.

Mark: It's a lot of support.

Nate: I didn't think people agreed that much on anything.

Mark: Offshore wind is more expensive, but because it's out of sight, out of mind, people think it's okay. It's still better than not doing it, but it's more expensive to maintain. Just take the brakes off.

Nate: The other thing, you said it's a platform to raise something, so if you're having a soapbox moment...Here's your...

Mark: Thank you very much. There's a technical solution that can really cut carbon in a short period of time, and we could deploy it if we were able to. The big constraint is the grid. The transmission system can't really do what we need it to do.

Nate: It's not designed for a hospital to have a wind turbine and feed that electricity back into the grid.

Mark: The intermittency means you'll never perfectly match generation to demand. The grid should act as the battery, with your neighbor using the energy instead. Batteries are very expensive and have their own impact. The grid isn't able to transmit that energy between points without significant investment. The UK is looking at a microgrid, smart grid model as the solution, but that's hard to deploy. Our progress in the UK on decarbonization: if you have a pie chart, 100% of our energy chunked into thirds—power, heat, and transport. In the last 15 years of policy drive and climate change response, we've decarbonized 33% of power.

Nate: So one third of one third.

Mark: One third of one third. So 10%, say. We've done 10%. In terms of heat and transport, we've not made an impact. One or two percent in each of those. You couldn't really count it.

Nate: Wow.

Mark: So, we talk about the progress we've made. Thirty-five percent of power decarbonization is great, but it's only ten percent. If we electrify everything, which is the current direction of travel, we need ten times more power.

Nate: Way more power?

Mark: Ten times more renewable power and the grid system to transmit that around the country. If you take into account the intermittency of renewables, you need to overspec the generation to match demands. Ignoring any energy efficiency measures, we need at least ten times more renewables in seven years.

Nate: At least ten times more. I think a lot...

Mark: I think a lot of these things could change significantly with a determined government. You asked me about what the government should be doing. We went from a localized, decentralized power network to a centralized one in history. Humanity did that in the last hundred years. We can do that again. It just needs decisive action. It will be expensive, and people won't like it, but they'll look back and think it was a good investment.

Nate: We're now in a moment in history. I'm going to walk away from this conversation inspired and kind of wishing I had been an electrician. Thanks so much for speaking with us, Mark, founder of ZLC Energy.