Proof of concept: Building an integrated energy strategy for long-term distillery resilience

Series overview

UK distilleries face a convergence of pressures that few other sectors can match. They are energy-intensive by nature, often remotely located, and operate under the scrutiny of some of the most ambitious industry-wide Net Zero targets in the UK economy. With over 90% of emissions in the whisky sector coming from direct, on-site fuel use (source: Scotch Whisky Association), and with wholesale energy prices remaining volatile alongside rising structural costs, the challenge of decarbonising while maintaining production reliability and commercial viability is significant.

This series from Equity Energies will explore the energy challenge facing UK distilleries, not as an abstract sustainability issue, but as a practical business and operational one. It will show why an integrated energy strategy, spanning procurement, on-site generation, fuel transition, and data-led optimisation, is becoming essential for producers who want to protect margins, meet their commitments, and remain competitive in the years ahead.

UK distilleries are defined by their rich, diverse, and often world-famous flavours, and by a production process that has barely changed in centuries. From vodka to whisky, and tequila to rum, the stills, the steam, and the carefully controlled temperatures are the constants that shape every bottle and define every unique taste. But the energy system that keeps those processes running is being transformed from the ground up, and the implications for the sector are more immediate and more complex than many producers have fully reckoned with.

Proof of concept: Building an integrated energy strategy for long-term distillery resilience

Making progress on individual elements of the energy challenge is commendable, but that’s not the same as solving it. Distilleries that install solar without reviewing their tariff, switch fuel without aligning their supply contract, or set decarbonisation targets without understanding their compliance obligations often find that they have spent money and effort solving one problem while creating another. The pathway to genuine resilience is integration, and it starts with treating energy as a single, connected system.

The energy challenge facing UK distilleries is not a single problem with a single answer. It’s a complex picture of pressures, structural cost inflation, regulatory tightening, decarbonisation commitments, and infrastructure constraints that requires a response which holds all these pressures in view simultaneously.

The energy trilemma, balancing affordability, security, and sustainability, applies as directly to distilleries as to any other organisation. But it’s the sector’s unique operational profile that makes the trade-offs more acute. The heat load cannot be interrupted, remote locations limit options, the Scope 1 challenge is fundamental, and the 2040 Net Zero commitment of the Scotch Whisky Association means that the action clock is already running.

Every distillery is different, and the right strategy will reflect site location, production scale, existing infrastructure, available capital, and organisational priorities. But there are principles that apply consistently, and a framework that allows those decisions to be made deliberately rather than reactively.

Starting with visibility: baseline before you invest

Good energy strategy begins with accurate data. Before any investment decision is made, whether in fuel switching, generation, storage, or efficiency, a distillery needs a clear and reliable baseline: how much energy is being used, in what form, at what times, and for what purpose. This foundation makes it possible to assess which interventions will deliver the greatest impact, and to sequence them in the right order.

This is both a sustainability requirement, as baselining is increasingly mandatory under CSRD, SECR, and other reporting frameworks, and a commercial necessity. UK ETS exposure is calculated based on actual emissions from on-site combustion, so accurate monitoring is the only way to manage that liability effectively. MCPD compliance requires emissions records, and any credible Net Zero roadmap depends on knowing the starting point.

Real-time energy monitoring platforms, like My ZEERO, can provide this visibility at circuit and asset level, enabling operators to identify inefficiencies, track progress against targets, and make investment decisions based on evidence rather than just assumptions. This also underpins the reporting transparency that investors, retailers, and export customers are increasingly demanding from producers across the food and beverage supply chain.

Managing costs actively, not passively

Distilleries with significant electricity demand face the same structural cost pressures discussed previously. Non-wholesale charges now represent more than half of the average electricity bill, and they are rising as the grid is modernised, reinforced, and decarbonised. Unlike wholesale prices, these charges cannot be avoided through procurement strategy alone, but their impact can be actively managed.

The options available include:

• Supply capacity review: Many organisations have agreed supply capacity (kVA) with their Distribution Network Operator set higher than operational requirements, resulting in avoidable standing charges. Reviewing and, where appropriate, adjusting this figure can reduce fixed cost exposure, though it requires careful analysis to avoid underestimating usage and then incurring penalties during peak demand.
• Tariff optimisation: Aligning tariff structures with actual demand profiles, including time-of-use elements that allow consumption to be shifted away from high-cost periods, can meaningfully reduce total cost. For distilleries with on-site storage, this becomes particularly powerful when stored energy can be deployed during expensive peak windows while cheaper overnight power is used to recharge.
• Contract structure: Understanding pass-through clauses, cost recovery terms, and volume tolerances within supply contracts is essential. Many cost surprises arise from vague or open-ended contractual provisions around regulated charges. Reviewing these terms before signature, and negotiating where possible, reduces future exposure to changes outside a distillery’s control.
• Flexible procurement: For distilleries with electricity exposure, flexible contracts that allow strategic buying decisions around wholesale market movements can provide value that fixed-price arrangements do not. Specialist advice is required to navigate these structures safely, but the savings potential can be significant.

Stacking actions in sequence

One of the most common mistakes in energy strategy is treating near-term and longer-term actions as separate alternatives rather than as a sequence. In practice, the best outcomes come from layering actions in a way that delivers value at each stage, while building toward the longer-term ambition.

A well-structured roadmap for a typical distillery might progress through several phases:

1. Immediate: Baseline energy and emissions; switch to HVO where fossil oil or diesel is in use; review supply capacity and contract terms; identify quick-win efficiency measures.
2. Near-term (1-3 years): Install solar PV and battery storage where site conditions allow; evaluate CHP viability and fuel options; assess AD potential where by-product streams are sufficient; align tariff and procurement strategy with generation assets.
3. Medium-term (3-7 years): Develop AD and CHP where feasible, integrating GGSS and peer-to-peer export opportunities; explore grid capacity upgrades for sites where electrification of heat becomes commercially viable; investigate thermal storage as a bridge technology.
4. Long-term (7+ years): Progress toward electrification of heat processes as electricity prices, grid access, and technology costs improve; evaluate green hydrogen for sites where other pathways are limited; secure renewable energy procurement to match 24/7 consumption where possible.

In reality, no pathway will remain static from the day it is first planned. Market conditions will shift, technologies will mature, planning outcomes will vary, and capital availability will fluctuate. What matters is that a clear direction is established, with decision points identified and trade-offs understood, so that when conditions change, the response can be deliberately recalibrated.

The AD and CHP opportunity: a commercial and decarbonisation case combined

For distilleries with sufficient by-product streams, anaerobic digestion paired with CHP represents one of the most compelling integrated energy opportunities available. AD converts draff and pot ale into biogas that can replace fossil fuel combustion directly, so when that biogas is fed into a CHP unit, it generates both heat and electricity on site, reducing grid dependency and improving overall energy efficiency. And where the distillery has a gas grid connection, biomethane injection under the Green Gas Support Scheme adds a direct commercial revenue stream.

The integration opportunities extend even further. A distillery generating electricity through an AD-fed CHP system and exporting below the 5 MW threshold may qualify for licence-exempt supply, allowing it to trade directly with neighbouring businesses through a private wire arrangement. Revenue from electricity export, combined with GGSS income from gas injection and the avoided cost of fuel that would otherwise have been purchased, can create a compelling economic case for the capital investment involved.

The integration opportunities extend even further. A distillery generating electricity through an AD-fed CHP system and exporting below the 5 MW threshold may qualify for licence-exempt supply, allowing it to trade directly with neighbouring businesses through a private wire arrangement. Revenue from electricity export, combined with GGSS income from gas injection and the avoided cost of fuel that would otherwise have been purchased, can create a compelling economic case for the capital investment involved.

There is also the possibility of collective action. The Scotch Whisky Association’s membership base, combined with the geographic clustering of many Scottish distilleries, creates potential for shared approaches to renewable procurement, basket Corporate Power Purchase Agreements (CPPAs), and even joint generation or AD infrastructure that individual distilleries could not economically develop alone. The infrastructure for this kind of collaboration is not yet established, but the commercial rationale is clear, and the SWA’s Net Zero commitment provides a natural forum for its development.

The case for an integrated partner

The complexity of the energy challenge facing distilleries reflects a wider truth about the energy transition: it cannot be navigated effectively through a series of separate transactions with separate suppliers. A new fuel contract here, a solar installation there, a different electricity supplier at renewal: each decision might be locally sensible and yet collectively incoherent, solving one problem while creating another or leaving significant value unrealised.

What distilleries increasingly need is a partner that can hold the whole picture: one that understands the interaction between procurement and generation, between tariff design and storage, between fuel switching and compliance, and between near-term cost management and longer-term decarbonisation. A partner that does not just supply a product, but helps build a strategy.

That is what Equity Energies, as part of the DCC Energy group, is positioned to provide. Through the group’s integrated capabilities, distilleries can access a joined-up approach that covers every dimension of their energy challenge:

• Certas Energy: supply and logistics of HVO and low-carbon fuels, with the infrastructure to serve remote and rural sites reliably.
• DT Gen: backup and standby generation capable of running on diesel, LPG, HVO, or hydrogen, providing resilience without compromising sustainability progress.
• Centreco: design and installation of solar PV and battery storage systems, including full EPC capability and integration with tariff and grid strategy.
• Equity Energies: strategy, energy data, procurement, tariff design, compliance support, and carbon monitoring, bringing all of the above into a single, coherent energy framework.

The value of this approach is not just the breadth of what is available; it’s that the pieces are designed to work together. Solar generation informs storage sizing, and storage strategy then informs tariff design. Tariff design is aligned with procurement, and procurement is tracked against a baseline that supports compliance reporting. All of this is informed by real-time data that allows the strategy to be reviewed and refined as conditions change.

The proof is in the distilling

The UK’s distilling sector has always understood the relationship between craft and process. The quality of what is produced depends on the precision of how it’s made. The same principle applies to energy strategy. It’s not enough to make a series of individual decisions and hope they add up to something coherent. The best outcomes come from a strategy that’s designed as a whole, sequenced intelligently, and managed with the same care and attention to detail that goes into every bottle produced.

The pressures on distilleries are real, and they’re not going away. But so too is the opportunity. The sector’s Scope 1 challenge is significant; the pathway to addressing it is not straightforward; and the timeline is running. But for those who approach it with the right strategy and the right support, the energy transition represents a genuine commercial and reputational advantage.

The proof, ultimately, is in the distilling.

Imraj Nijjar – Business Development Manager, Equity Energies