Green business energy is proving more popular than ever as businesses increasingly set out a procurement energy strategy aligned to sustainability as well as cost.
While not all businesses are able to generate their own energy – a sustainable way of putting less pressure on the national grid – green energy contracts are widely available.
But what exactly is a green energy contract?
Basically, the gas and electricity that powers your premises of work comes from a supplier who has sourced it through a renewable energy generator such as wind or solar farms, hydroelectric power stations or biomass plants.
The amount of energy from renewable sources differs from supplier to supplier; however, it is a legal requirement for them to publish details of their fuel mix.
The more businesses (and households) that adopt this policy, the more renewable energy is fed back into the grid, and the country’s dependence on fossil fuels reduces, helping to alleviate the onset of climate change as a result.
If you’d like some advice on the range of green energy contracts that are currently being offered on the market, please get in touch with one of our energy consultants on 01225-867722
According to a recent report from Imperial’s Centre for Climate Finance & Investment in collaboration with the International Energy Agency, renewable power is outperforming fossil fuels in US and European markets.
Over the last decade, it was found that renewables have offered a significantly higher return on investment than fossil fuels over the same period. Yet, the report reveals that levels of investment in clean energy are still well below that needed to seriously combat climate change.
These findings and the obstacles to putting the world’s energy system on a more sustainable path were recently discussed in the latest webinar of the series entitled Imperial Future Matters. It involved a virtual audience of industry leaders, students, alumni and journalists
Dr Charles Donovan, Executive Director of the Centre for Climate Finance & Investment at the Business School said: “We are in the midst of a clean-tech miracle—in particular with regards to solar power. We are 10 to 15 years ahead of schedule due to a revolutionary set of changes. If there’s any problem, it’s that solar power is too cheap today. There’s real momentum gathering behind renewable power, based purely on their economic advantage. Our results show that renewable power is outperforming financially, but has still not attracted sizable support from listed equity investors.”
Following the presentation, industry figures offered their thoughts on the key issues. Zoe Knight, Managing Director, Global Head, HSBC Centre of Sustainable Finance at HSBC Holdings PLC said: “In emerging markets, one way to improve things post-COVID is to help liberalise the energy sector in order to bring in either direct investment on a national basis or foreign direct investment from corporates that are operating globally and have made pledges to deliver 100% of their power needs from renewables. This will help to attract the capital that the country needs and in turn decarbonise and create different jobs as we exit COVID.”
The climate change emergency was at the front and centre of the news agenda before Covid-19, and even while we are still in the grip of the pandemic, it is an issue that has rightfully refused to go away.
We have found that in our discussions with clients and potential new customers that the drive towards a carbon-neutral position – by 2050, or even 2030 in some cases – is still a key focus.
Figures released by BloombergNEF showed how purchasing green energy contracts rose by 40% on the previous year in 2019, reaching almost 20 gigawatts (GW), and that appetite for change is still there if our experience is anything to go by.
Our Choice Energy Framework is proving to be a popular option for those public sector organisations looking to not only save money in their energy procurement but also be more ethical in the way they power their facilities.
There has been tremendous interest in securing green energy contracts – ones that use wind and solar energy, for example – as opposed to traditional brown energy that relies on fossil fuel power generation.
The Choice Energy Framework involves up to six energy suppliers who have been shortlisted on the basis of tariff competitiveness, billing accuracy, max/min volume threshold restrictions and terms and conditions.
Fixed and flexible contracts will be offered by the suppliers with the length of the contract varying from 12 months to as long as four years.
If you would like to find out more, please contact one of our team on 01225-867722
As the UK strives towards a zero-carbon future, green energy procurement has become a key focus for such minded companies.
Switching away from fossil fuels to renewables has become much more straightforward given the increase in the range of options available, such as solar and wind turbine generation, and the growing affordability of the energy such methods produce.
Today, renewables produce more than 20% of the UK’s electricity, and that figure is forecast to rise to 30% by 2030, especially with the largest solar farm of its kind to be built shortly in Kent.
Organisations are now aligning their energy strategy to reflect the shifting trend, with increased investment in renewables gathering momentum.
As one of the UK’s leading consultancies, Energy Management LLP recognises this and has devised a Green Energy Framework (GEF), which is designed to support public sector bodies in their commitment to a more sustainable future.
Incorporated within the over-arching framework agreement is a desktop audit of current energy efficiency schemes and analysis of half-hourly (HH) energy consumption data.
Once these initial steps are taken, a site survey is then conducted by one of our chartered engineers, and based on their findings, a detailed action plan highlighting areas of improvement will be discussed with clients.
At Energy Management, we are committed to helping clients for the whole duration of their journey towards net-zero carbon, and ongoing support is available through accountable auditing.
The Green Energy Framework follows on from the successful launch of the Choice Energy Framework, another of Energy Management’s initiatives that allow public sector bodies to access the best energy solutions.
A quarterly poll issued by the Department for Business Energy and Industrial Strategy (BEIS) shows that the public appetite for renewable energy remains very high.
The overwhelming majority of the people questioned (82%) in the Public Attitudes Tracker, commissioned by an independent research company, back the transition away from oil and gas to greener sources of energy. Only 2% opposed the shift.
Plenty, however, remain to be convinced by the validity of fracking as a potential energy source moving forward, with a new high of 45% against the extraction of shale gas.
Just over three-quarters of those polled said they were concerned about climate change.
Quoted in an article on the Energy Voice website, Renewable UK’s deputy chief executive Melanie Onn said: “Even while we face the unprecedented challenges posed by Covid-19, the public supports continued action to avoid the worst the impacts of climate change and make our economy more sustainable.
“Investment in new renewables, which is supported by 82% of people, will stimulate growth and employment as the economy recovers from the impacts of the virus.
“Renewable energy capacity will grow rapidly this decade and beyond to meet our net-zero emissions target, and our industry will be investing tens of billions of pounds and creating much-needed jobs across the UK.”
For public sector bodies looking to reflect the mood of the pubic and reduce their carbon footprint, our Green Energy Frameworkcould provide answers in terms of green energy procurement and a host of other areas.
The GEF includes a shortlist of green energy suppliers who have been chosen based on the following criteria: tariff competitiveness, billing accuracy, green certification and the most favourable terms and conditions.
In the wake of the coronavirus pandemic, the government has offered companies the option of a three-month extension before they need to file their financial accounts.
Ordinarily, the information is due on 1st April but for those companies that chose to apply, the deadline has been pushed back to the start of July.
This also applies to the new system for carbon and energy reporting, SECR, which is now included as part of the end-of-year accounts.
Clearly this will be welcomed by some in these challenging economic times, but as SECR is an unfamiliar paradigm with a lot of data to be collected, it would be prudent for companies that do decide to use the extension to still act sooner rather than later.
The new regulations will require an estimated 11,900 companies incorporated in the UK to disclose their energy and carbon emissions – a far greater number than were required to act under the old Carbon Reduction Commitment Energy Efficiency Scheme (CRC).
As an external consultancy with expertise in compliance and energy-related legislation, we can collate, analyse and present this sustainability data for you.
Whilst the energy and carbon reporting data is not audited in the same way as a company’s finances at present, this is not to say it won’t happen in the future.
And as climate change is one of the top global issues, it is increasingly likely that companies will be judged by potential customers on their carbon footprint and attitude towards sustainability.
With the information now in the public domain, companies have an interest in reporting their emission figures so that they make sense in the context of their organisation, not least because the data is now in the public domain.
If you would like any advice or help in making sure you are SECR compliant, please get in touch on 01225-867722 or visit our dedicated web page.
Global emissions are set for unprecedented fall this year as a direct result of the coronavirus pandemic, according to a report in Bloomberg Green.
As less oil, gas and electricity is consumed due to the slowdown in industrial activity across the globe, and renewables take up a larger share of the energy market, global emissions will fall by 8% (2.6 billion metric tons) in 2020 – the largest fall in history.
“The energy industry that emerges from this crisis will be significantly different from the one that came before,” Fatih Birol, the International Energy Agency’s (IEA) executive director, said in a statement released from the organisation’s headquarters in Paris on Thursday.
Even though overall energy demand has decreased by as much as 6% this year, renewables in many countries get first priority to feed electricity into the grid.
While fossil-fuel generators shut down to prevent a system overload, there is nothing to stop solar, wind and hydro power producers selling all their output.
Unseasonably warm, yet windy, weather throughout April has also been favourable for solar and wind farm owners and the dominance of green energy in the overall market is only set to continue with low-carbon sources set to be responsible for 40% of global electricity generation.
It’s not all a breeze for renewables
Renewables are still facing challenges of their own, however. In the wake of Covid-19, renewable energy has been rocked by global supply chain disruption and heightened part costs.
Around 11% of the world’s wind turbines were shut this week because of the virus, according to Bloomberg, while work on constructing new wind farms has been delayed by restrictions on the movement of workers and regulatory processes.
With the big oil players all having significantly invested in renewable energy, an article in Power Technology says they are expected to respond to the record slump in oil prices by cost-cutting and shifting focus away from their clean energy commitments in the short term.
All things considered, this could lead to a slowdown in new renewable energy projects coming online this year.
For the third time in just under a year, the UK has broken its record for consecutive days of coal-free power generation.
In May 2019, the UK went a fortnight without coal-fired power for the first time since the pre-industrial period, but the continued drive towards net-zero future and the rise in green energy output meant this barely lasted a month.
That record of 18 consecutive days, six hours and 12 minutes stood for seven months but was beaten today.
Currently, the UK’s energy system has not used coal for power generation for more than 440 hours, accounting for less than 1% of electricity generation in the UK.
Unseasonably warm weather and the coronavirus pandemic have both contributed to the new milestone.
Last Monday (20 April), solar energy accounted for 30% of all electricity generated, while the global lockdown has forced down demand due to a significant slowdown in production.
Sunnier times ahead?
“Solar is playing a critical role in delivering a fossil-free grid and cleaner, cheaper power to Britain. As we look towards a net-zero future, solar will become an increasingly greater part of the energy mix, tackling high power prices, climate change, and biodiversity loss,” said Solar Trade Association 9STA) CEO Chris Hewett.
“With the Government beginning to consider how best to kick-start the economy following the Covid-19 crisis, it has a golden opportunity to place renewables at the heart of its recovery package. Solar, in particular, can provide a glut of quality green jobs and growth at short notice, with your average solar park able to be built in less than six months, and home installation in less than a day. The industry is ready to help drive the revival.”
The public appetite for change
The dramatic slump in oil prices is another factor that could accelerate the U.K’s net-zero push by promoting green energy sources, according to Dr Jonathan Marshall, Head of Analysis at the Energy and Climate Intelligence Unit.
Although previous falls in fossil fuel prices have been seen to have an adverse effect on investment in renewable energy, Marshall argues that the public mood has changed and that the reverse could now be the case.
Marshall believes that an over-dependence on imported fuel, estimated to be heading towards 65% of the market share by 2035, combined with highly volatile energy prices are shaping a new way of thinking amongst an increasingly politicised public.
In so many areas of life what was once seen as normal is now being re-evaluated, and power generation is no different, he says.
“Putting a rocket under the UK’s low carbon transition, as well as pulling the plug on industries that have been on life support for years, could be one of the ways of giving the public what it wants,” claimed Dr Marshall.
The coronavirus pandemic has left global economies at a standstill and knocked the confidence in global and connected trade.
The question has been asked: would businesses benefit from pivoting to more localised value chains, as France President Macron advocates, or do global supply chains enable a global shift towards a climate-resilient future?
While that is open to debate, the damage caused by the coronavirus is there for all to see, in hard figures. In what has been described as “an ugly” situation, the World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year.
The World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year
The virus is having a huge impact on transport and productivity with many supply chains being affected. Manufacturers are trying to shift the structure of their supply chains to make up for missed deliveries or inputting pivoting systems to make different products entirely.
PPE and hand sanitiser are two obvious examples where this is the case. Turning whiskey into wine was not an unfamiliar process before the outbreak, but how many distilleries would have imagined they’d end up making products that people would raise a glass to because they made them safe not happy?
The world has been turned upside down in so many respects.
Sustainability to suffer in the long run?
With this shift in supply chain structure comes concerns, that the short-term focus placed upon operational capacity and processes could unravel efforts to integrate suppliers into more sustainable practices.
As data from the Financial Times reveals, COVID-19 has unmasked an overt reliance on manufacturing suppliers located in China, with 300 of the world’s top 500 companies owning facilities in Wuhan, the city where the pandemic began.
It has become more and more apparent that, for many organisations, the globalisation of manufacturing has created a scenario where supply chains are unprepared for disruption.
This is due to either being very localised or spanning several different countries, it can even be to the point where end-user businesses won’t be aware of associated links to deforestation, human rights abuse and other environmental and ethical factors.