When it comes to doing business, win-win situations are hard to come by. But Ziko Abram and Yoav Zingher, the directors of new energy demand management company KiWi Power, seem to be on to something.
Founded in 2009, KiWi works in co-operation with the National Grid - which runs the UK's gas and electricity network - to encourage businesses to cut their carbon footprint.
The National Grid pays KiWi, which in turn pays companies to temporarily reduce their electricity during peak times. Larger organisations can earn up to £500,000 a year, simultaneously cutting their carbon footprint and lowering the need for the National Grid to build new expensive power stations.
Ziko Abram, a 28-year-old former investment banker at Credit Suisse, says: "It does sound too good to be true but we really do pay our members to cut their electricity. From a national perspective, it is cheaper to pay a consumer to temporarily reduce their energy consumption than it is to pay for an additional power station, which is both expensive and polluting. It works out for the Grid and our clients are already starting to see rewards. An increasing number of people are showing interest."
In the past year, Mr Abram and Mr Zingher have built up a considerable network of customers across the UK. These include the billionaire Reuben brothers and their Eden Shopping Centre in High Wycombe, London Oxford Airport and the Cleveland Potash Mining, the only potash mine in the UK. And more recently, Millbank Tower, the London headquarters for the Conservative party.
Larger organisations can earn up to £500,000 a year
They have also secured investment from Idan Ofer, one of the world's largest clean-technology investors and the chairman of Better Place. "We think that there is a real potential for UK companies to participate in this."
For each client, KiWi assesses how they can cut their emissions - typically via lighting, air conditioning and heating - during peak hours, such as during a world sporting event or on a particularly cold day.
The entrepreneurs say this could happen between 10 and 50 times a year depending on the appetite of the client, generally for less than an hour and never for more than two.
They produce what they call a demand reduction strategy, activating it at those times of year when the Grid is highly congested.
The initiative is based on a model the duo came across in the United States.
Israeli-born Mr Zingher, 30, says: "I worked in private equity investing in renewable energy and smart grid. In around 2008/2009, it was becoming pretty clear that the market for raising funds wasn't particularly good. We weren't really making any investments because everyone was a bit scared to.
"I had probably seen every clean-tech investment under the sun and this model appealed to Ziko and I, so we decided to give it a go. It had worked successfully in the States for almost a decade but no one had tried it in the UK before."
It was perfect timing for Hong Kong-born Mr Abram, 28, who had been looking for a new challenge. "After two-and-a-half years, I got a little bit bored of finance and wanted something to do in the clean-tech sector."
They self-funded the company for the first six months before a cash injection from Mr Ofer. How much? "It's not the kind of information we can give it out but certainly enough to put the business on an excellent footing," says Mr Zingher.
Non-domestic buildings are responsible for about 17 per cent of all UK carbon emissions and the Carbon Trust estimates that the benefit to the economy of cutting a majority of these emissions would be £4.5 billion by 2020. KiWi says their average client is able to reduce its energy demand by at least 300 kilowatts almost immediately. In around five months, KiWi has saved 50 megawatts, the equivalent of 20,000 households boiling their kettles at the same time.
Clients such as medium-sized hotels, breweries and shopping centres can typically earn between £5,000 and £20,000 a year, although larger sites with back-up generators could receive up to £500,000.
What's more, says Mr Abram, a graduate of Brandeis University in Boston and the London School of Economics: "The companies don't pay anything upfront - they don't need to buy any equipment. We do the whole lot; the audit, the installation and the monitoring.
"Building a new power station can take five years," adds Mr Zingher. "We can get this up and running in a few months."
KiWi is targeting tens of thousands of UK companies - not an unrealistic goal as businesses look for ways to join the green
revolution.
Major brand PepsiCo recently announced it has reduced its carbon footprint by focusing on energy and waste reduction when producing Walkers Crisps. And then there are those seeking to cut costs in difficult times. "We have been surprised," says Mr Zingher. "You wouldn't have thought that £50,000 or £60,000 would be that much to huge companies, but in fact, they are thinking: 'Actually, that's two people we don't need to fire'."
He acknowledges that the UK has "under-invested in the green sector for a long time. There are lots of good investments to be made. The sector as a whole is good but it's picking the right companies and knowing where to invest - that's the key."
They were eyeing up other opportunities before deciding on the clean-tech area they deemed to be the most lucrative. Mr Abram points out: "With most other areas of renewable energy, efficiency or sustainability - such as solar and wind - there are usually upfront costs involved, such as installing solar panels or LED lighting. Whereas with this, there are no upfront installation costs. I think it's the best way to start."
Mr Zingher adds: "We set it up because it is a good business that is sustainable. If business isn't sustainable in the long-term both from a profit perspective and a green perspective, it's not going to last. If it wasn't profitable we wouldn't do it and if it wasn't good for the environment, we wouldn't do it either. The two go hand in hand.
"We are building this company to last for a long time."
