Commercial Renewable Energy – Everything You Need To Know
September 30, 2019
With urgent calls to minimise our impact on the environment and pressure to meet net zero targets, it’s important that businesses understand renewable energy: what renewable options are available, their benefits, and how to procure renewable energy in the right way to help reduce your carbon footprint and achieve your decarbonisation goals.
Many businesses and organisations across a wide range of sectors are actively pursuing renewable energy. Securing energy from renewable sources is a great way to publicly demonstrate that your business cares about the environment as well as gaining more control in a variable energy market.
In this article, we’ll look at how renewable energy benefits businesses and the environment, how it’s procured for businesses and the opportunities ‘going green’ represents for businesses moving into the future.
Ignite takes a proactive and transparent approach to corporate renewable energy procurement. Contact us today to learn more about how we can transform energy management within your business and achieve net zero targets.
What is renewable energy?
Renewable energy is energy that is derived from natural sources, and includes wind power, solar energy and hydro. These sources are available in abundance and are constantly and naturally renewed unlike fossil fuels that are non-renewable. Fossil fuels emit harmful greenhouse gases when they’re burned to create energy which has contributed significantly to the climate crisis. For the future of the planet and its inhabitants, it’s important to transition from fossil fuels to renewable energy sources. As well as dramatically reducing harmful emissions, renewable energy also aids in reducing our reliance on energy imports.
Renewable energy sources
Here is a brief overview of the more common renewable energy sources:
Solar Energy – the sun provides an abundant energy source and solar technologies exist to convert sunlight into electrical energy. With falling costs in the manufacturing of solar panels, this is a great source of renewable energy.
Wind Energy – wind turbines, either onshore or offshore, use the kinetic energy from wind to produce electricity. Continued innovation has seen advances in technology, making turbines increasingly efficient. The potential for offshore wind to provide energy is huge.
Hydro Energy – it’s possible to capture the energy from water as it moves from higher to lower elevations in rivers or reservoirs. It relies in part on rainfall and can have a negative impact on the environment depending on when and how these hydro stations are built.
Tidal Energy – uses the kinetic energy of waves and currents to produce electricity or heat. This is more of an emerging area when it comes to availability but advances are being made all the time.
Geothermal Energy – involves extracting heat from the accessible thermal energy from the Earth
Offsite Renewable energy vs Onsite Renewable energy
You have various renewable energy options available to you as a business. These include the opportunity to generate and use your own onsite renewable energy, usually from solar panels. By generating your own energy, you have some independence and protection from energy price hikes. When assessing these projects, you must balance the suitability of the site with the project cost.
Most businesses will also need to procure offsite renewable energy using a broker or energy consultant like Ignite. How you procure offsite renewable energy is up to you, and can be done in a way that aligns to your wider net zero strategy – with contract options like CPPAs and a view on additionality being worthwhile.
RENEWABLE ENERGY ADVANTAGES – WHY YOUR BUSINESS SHOULD GO GREEN
There are numerous renewable energy advantages, but ultimately by making your business more sustainable in the long term you will directly reduce your impact on the environment.
As well as helping to reduce your contribution to climate change, the benefits of renewable energy for businesses include:
- Brand reputation – by taking proactive action on reducing your impact on the environment, you will gain respect from your customers, staff and other key investors and stakeholders
- More secure energy supply – fossil fuels are a finite resource and rely on energy imports that as we have seen can be impacted by global events. Renewable energy sources are natural, available across the UK and won’t run out.
- More price certainty – with Corporate Power Purchase agreements, you can get more price certainty whilst helping generate new renewable energy
Commercial and Economic BENEFITS OF RENEWABLE ENERGY
Although there are currently no financial incentives or grants for a business to use energy from renewable sources there are long term economic advantages. The economics of renewable energy offers more than just short-term rewards. Choosing green energy for your business makes sense if you want to secure a healthy bottom line for years to come.
The biggest financial benefit of using green energy is securing long-term stable energy costs. Renewable energy sources are not subject to the same price rises as fossil fuels. If you can commit to renewable energy over the long term through Power Purchase Agreements, the price of energy can be secured for a longer-term than available in the general wholesale power market.
RENEWABLE ENERGY AND NET ZERO TARGETS
Energy managers and sustainability officers are working hard to meet net zero targets. One of the easiest first steps is to review how you source your energy and switch to renewable energy sources. It’s important when working towards meaningful and realistic science-based net zero targets that you fully understand the role renewable energy has to play. You should carefully consider when and where you’re getting renewable energy from to make sure it aligns to your wider strategy.
Procuring renewable energy will certainly make your organisation more sustainable, but it is only a small piece of the puzzle. You also need to decrease energy consumption or demand.
Find out more about Ignite’s work with New Look and how we helped them achieve carbon neutral status.
How to switch to renewable energy
We’ve already covered the reasons to switch to renewable energy, now let’s look at the switching process and the major considerations.
If you are considering moving to renewable energy for your business, there are two questions that you might have:
- Can switching to renewable negatively impact my business? Switching to renewable sources of energy is likely to have a minimal impact on your operational costs. In fact, using green energy will benefit your business in the long run due to the reasons discussed in this article.
- Is it easy to switch to renewable energy? Currently there is not sufficient renewable energy on the grid to meet demand so you may need to look to other options and contract types to guarantee renewable energy. Procuring green energy can be managed in similar ways to traditional supply contracts. Ignite are experienced in negotiating renewable energy contracts that balance your appetite for risk with overall business objectives. We make the process easy.
How to procure renewable energy?
The UK government has committed to achieving carbon neutrality for all energy used across the UK by 2050. Ignite can make sure your business is ahead of the curve by ensuring the energy procured for your business comes from renewable and sustainable sources.
Find out more about our renewable energy procurement service.
There are several mechanisms for procuring green energy including Power Purchase Agreements and via REGO or Enhanced REGO energy.
What are REGO CERTIFICATES?
REGO (Renewable Energy Guarantees Origin) backed energy ensures that the energy your business purchases is offset by renewable energy being generated and exported to the grid. This type of supply is not traceable, however, does guarantee there is enough supply of green energy to meet your needs.
What is ENHANCED REGO?
Enhanced REGO offers the same benefits as REGO-backed energy, with one crucial difference. This kind of supply contract is traceable, meaning the energy you purchase can be traced back to an individual source of renewable generation. Enhanced REGO can improve your green credentials as REGO certificates can be available to display in-store, detailing the source of the power that runs your business.
What are POWER PURCHASE AGREEMENTS and how do they relate to renewable energy?
Power Purchase Agreements (PPAs) offer businesses a way to secure green energy at a known price for a longer period of time than is possible on the wholesale market. This ensures stable energy costs at the same time as making sure that your investment in green energy genuinely results in new capacity being brought online. This could be for some of or all of a business’ volume and can range from 5-20 years. Find out more about the full benefits of Corporate Power Purchase Agreements.
RENEWABLE ENERGY AND THE NEED FOR DEEPER GREEN
More and more businesses are interested in securing deeper green energy. This represents a step beyond simply purchasing REGO-backed renewable energy and refers to having more of a positive real-world impact when it comes to energy procurement. The concept of deeper green energy is tied to creating new capacity on the grid rather than simply purchasing existing renewable energy. The purchasing of PPAs is the best way for businesses to achieve this while also reaping other benefits.
IGNITE ENERGY –YOUR RENEWABLE ENERGY PARTNER
Ignite offer unique end-to-end energy management services including renewable energy procurement that involves managing procurement strategies and opportunities, controlling energy budgets and managing risk amongst markets.
We believe energy procurement should be transparent and effective. That’s why we work to make sure that you get the right energy for your needs.
Ignite Energy can save your business millions of pounds in energy costs through tailor-made strategies and solutions. We pride ourselves on outstanding service – you will benefit from the support of a dedicated and experienced team that understands your business inside and out.
We are experts in energy management for large businesses and organisations.
Contact us today to find out how we can help your business to procure renewable energy.