Powering towards Net Zero

Climate change is one of the biggest collective challenges we face, with a need for ambitious action from all nations to keep global temperatures below 1.5°C. Here in the UK, we’re already making good progress; greenhouse gas emissions have reduced by 43% from 1990 levels.

However, the Committee on Climate Change - whose independent research has helped to shape the UK’s Net Zero ambitions - believes that the emissions reductions achieved in power generation are in fact masking a lack of progress in other sectors. Its 2018 Progress Report to Parliament tells us that emissions reduction progress has been slow across agriculture, buildings, industry, waste, and transport. Much more needs to be done if we are to reach our nation’s commitment to Net Zero by 2050. Although we are still waiting for policy makers to turn aims into practical measures, businesses can still take real action to play their part.

Sustainability makes good business sense

Taking a fresh look at how you buy energy is key to tackling the twin challenge of cutting carbon, while strengthening your business. Proactively choosing green energy creates a win-win situation; it’s a bold action which your organisation can take to help halt climate change and it can also bring immediate commercial and reputational benefits. Across all sectors, customers, shareholders, stakeholders and supply-chain partners increasingly expect businesses to operate sustainably. It’s one of the reasons why more than 190 of the world's leading companies have already formally committed to sourcing 100% of their electricity from renewable sources under the RE100 initiative. These companies consistently outperform their peers financially .

Facilities managers who would like to demonstrate that their organisation runs on 100% green energy should actively specify renewables from their supplier. The ideal green electricity contract is one where the supplier can guarantee power which is traceable to 100% renewable generation assets, such as specific offshore windfarms. If Greenhouse Gas reporting is within your remit - or your customers demand it - you’ll also want to be sure that your supplier can provide you with Renewable Electricity Guarantee of Origin (REGO) certificates, to enable you to report zero scope 2 carbon emissions and allow your organisation to participate in sustainability programmes such as RE100 and the Carbon Disclosure Project.

Lower costs and risk with a Corporate PPA
For those ready to make a longer-term commitment to carbon reduction, it may be time to consider a Corporate Power Purchase agreement (PPA). Corporate PPAs not only have a direct, positive impact on the amount of renewable capacity on the grid, they also enable businesses to secure long-term, stable energy costs and reduce their exposure to marketplace risk.

Under a Corporate PPA, a business will receive energy from a specified renewable energy project or asset for periods of up to ten years. The arrangement guarantees investment for the generation project and a fixed energy price for the business throughout the contracted period. Our own offshore wind Corporate PPA has already provided budget certainty and more stable operating costs for Northumbrian Water through a long-term fixed price for electricity. The company will source approximately 100 GWh a year for ten years from our Race Bank wind farm. This agreement is an important element in Northumbrian Water’s intelligent procurement strategy and will help them to achieve their carbon reduction goals. It will cover 30% of their energy requirement. The remaining 70% of their energy will also come from 100% renewable sources, delivered through the company’s existing supply contract. By adopting a blend of solutions for its total energy demand, Northumbrian Water can spread its price risk, whilst keeping a firm focus on sustainability.

If your organisation has already made the decision to develop a long-term energy strategy but is trying to decide which type of renewable technology to invest in, offshore wind is a good option - as it allows you to provide your organisation with a secure, sustainable electricity supply for a stable, competitive price.

Prepare now for future change
However you decide to approach carbon reduction, it’s worth considering that the environmental responsibilities all businesses face look set to increase over the coming months and years. In addition to the new policy and regulation expected to follow the new Net Zero legislation, increased public awareness is adding pressure on all businesses to operate sustainably. The overriding message is ‘be ready’. The journey to net zero will be challenging for businesses of all types and sizes, but can also provide facilities managers with new opportunities to manage costs, boost reputation and be a part of our nation’s exciting energy transformation