The U.K. energy industry is at a tipping point. But in what direction will it tip?
Prime Minister Teresa May recently abolished the Department for Energy and Climate Change (DECC) within hours of taking office. It was a surprising move. But in no way does it signal a potential decline in the adoption of renewables or other clean, energy-efficient technologies.
In fact, the opposite is true — anticipate acceleration.
That’s because the wheels of change are already in motion in the quest to tackle climate change. The reduction in the cost of renewable energy technologies is directly linked to the growth of organizations investing in this space. This means in some areas renewable energy can be purchased up to 70 percent cheaper than traditional sources. While renewables were once considered as a ‘nice-to-have’, they have quickly become a necessity in the energy mix.
Continued emphasis must be placed on reducing greenhouse gas emissions, yet more still needs to done if the European Union is to reach its 20 percent energy efficiency target by 2020.
The Ambition to Reach 100
Across Europe, the Middle East and Africa, companies are striving to achieve 100 percent renewable energy sourcing. To advance along this path, more and more organizations are seeking ways to best implement renewable technology alongside traditional efficiency measures. The goal being to one day switch entirely to green energy.
As renewable options increase so do the services and incentives available. There are more paths to carbon reduction than ever before. Today’s executives face sorting through hundreds of options to find the right fit for their company’s sustainability policies and goals.
The real challenge lies in understanding this procurement and the physical implementation of renewables, both onsite and off.
These incentives are becoming available far and wide, with regional promotions like the U.K.’s own ‘feed-in tariffs’, which encourage businesses to become involved in green procurement and earn rewards for generating their own electricity. The expectation should be that a greater number of businesses look for ways to leverage the benefits of wind and solar power, emulating the likes of Mars, the global food producer. The company recently partnered with a wind farm in Inverness to generate green electricity for its U.K. 12 sites.
The Power to Purchase Renewables
Increasingly, the answer to ‘which renewable options should an organisation choose’ is Power Purchase Agreements (PPAs) — coupled with an advisor to help find a credible developer, financier and other affiliated partners.
A PPA is a long-term agreement to buy power from a renewable energy supplier. Third-party capital provides the means to build the renewable resource. The PPA provider then assumes all risks and responsibilities of ownership, including operation and maintenance, while PPA purchasers are only responsible for buying the electricity produced.
Equinix, which delivers data center services to companies across the globe, offers an example of how well PPAs can work. The company has set progressive sustainability goals, including renewable energy commitments.
Working with Schneider Electric, Equinix purchased 105 megawatts (MW) of new solar power to cover its facilities. It also contracted with developers, buying a combined 225 MW of wind capacity. Through a PPA-structured approach, the company procured enough renewable energy — 330 MW in total — to power more than 85,000 homes.
The PPAs nearly tripled the amount of electricity Equinix gets from renewables, from 30 percent in 2014 to more than 80 percent. Together, these agreements will provide 100 percent renewable energy coverage for 13 data centres.
Choosing the best path for renewable energy can be confusing, but getting it right means an engagement that’s advantageous for every organization involved. Only when businesses collectively invest in smarter, greener technologies — more essential than luxury at this point — can we make a vital step forward to bring down greenhouse gas emissions.
By Toby Crewe, sustainability director, Schneider Electric, Energy and Sustainability Services