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Analysis: Honda hopes long grass can power sustainable energy

In one of Europe's harshest ever winters one question dominates - does the continent have the energy reserves to cope?

Plunging temperatures across the EU have placed almost unprecedented demand on some of the EU's biggest electricity suppliers and, as demand continues to pick up in improving economic conditions, some are clearly struggling to keep pace.

In December, electricity prices in Poland hit new highs as it faced up to the consequences of a power-plant construction programme that is failing to match the speed of the country's burgeoning growth.

Demand in Poland leapt 4.2% in the first 10 months of 2010, a figure that's expected to rise further as we move through the next 12 months.

"Poland is an island in Europe because it doesn't have overcapacity," said Pawel Smolen, head of strategy for Vattenfall Europe AG. He added that the global economic "crisis has not curbed demand and as a result the country may face capacity shortages given a lack of advanced investment projects."

With these potential shortfalls in mind its little surprise that some procurement organisations are taking a proactive approach when it comes to securing power supplies for the future.

Nowhere is this better illustrated than in a small corner of the west of England, where a unique project is being pioneered by Japanese automotive giant Honda.

A report by UK electricity regulator Ofgem, published in April 2010, predicted that Britain would experience its first serious power shortages in over 30 years as the decade progressed - an eventuality which Honda is working hard to counter.

"Obviously, everyone's read the stories about power shortages and we're aware of that situation but our single driver is carbon reduction," said Jeremy Edwards, manager at Honda Trading Europe.

Part of Honda's plans to counter any future shortfalls involves the building of an on-site power station powered not by traditional methods, but by an African grass that could revolutionise the ways that firms source their energy.

"We could pay extra for our electricity from a supplier who gets it from a clean source but we don't want to go down that road," said Edwards. "We want to take ownership of the problem, ask how we can find at least part of the solution and get our own hands dirty."

Honda hopes the grass, known as miscanthus, with enable the power station to provide between 5 and 30 megawatts by 2015, an ambitious target but one which clearly illustrates just how seriously some of the world's most high profile companies are taking the threat of future power supply disruptions.

If Honda's grand plan comes to fruition it would be the largest such plant to be built by an industrial manufacturer in the UK. Others, however, are following their lead when it comes to taking an innovative approach to energy sourcing.

In East London, one of Ford's major plants will be powered entirely by wind-power by the end of 2011.

Meanwhile, in 2008 Sainsbury's signed a deal with a small wind farm project based in Scotland, which involved the firm purchasing energy direct from Lochhead Farm in South Lanarkshire over a ten-year period.

More are likely to follow suit as the threat of power shortages continues and whether its grass or wind, the likes of Honda are out to prove that talk of sustainable energy procurement is far more than simply hot air.