Posted on: 18/11/2015
As the issues around renewable energy supply become more complex, Mike Shirley explains why we’ve developed a new supply offering and the importance of the Carbon Trust’s support.
When we first launched into the retail market in 2008, there was less choice for businesses interested in purchasing renewable electricity.
Demand for renewable energy back then was still developing but over the years has grown, more suppliers have emerged and the market has become much more sophisticated.
Whilst there were some examples of early innovation, for instance the contract M&S signed with us to purchase power generated from Scottish renewable sources, for most early adopters of renewable energy there was much less transparency over the source of their supply…was it Good Quality Combined Heat & Power? Climate Change Levy Exempt? Renewable Energy Guarantee of Origin (REGO) backed? There wasn’t a great deal of clarity to be found and standards varied greatly.
Greater demand for information
These days a growing number now need to know how their electricity is generated, with some leaders now interested in being able to choose exactly which renewable technologies make up their supply and some even keen to go further and support renewable energy projects in their specific area.
Consumers have also become more interested in sustainability issues and businesses want to highlight their energy choices to demonstrate environmental credentials or distinguish themselves from competitors.
Recent years have also seen more businesses start to report their carbon emissions, either as part of voluntary carbon footprinting or to meet the requirements of mandatory schemes. Under GHG Protocol Scope 2 Guidance, which was updated in January this year, businesses can now get recognition for their energy purchasing choices provided certain reporting conditions are met to ensure transparency and traceability.
Independent verification provides confidence
Against this backdrop of growing complexity, we wanted to try and support our customers in making important commitments in terms of renewable energy purchasing and to ensure they can confidently communicate these commitments with customers, colleagues and investors.
To help provide customers with this confidence, independent verification is crucial and we are delighted that the Carbon Trust were able to offer support.
Their globally-recognised expertise in carbon footprinting provides the transparency and rigour we want to give our customers.
The Carbon Trust’s support in developing the allocation model which underpins the new product enables us to allocate renewable certificates to specific tariffs or customers. That ensures a link can be made between how energy is generated and the end consumer, and avoids the risk of double counting of certificates. The model also enables us to provide an Energy Label, bespoke fuel mix and emissions factor for the energy supplied which can be used for corporate carbon reporting.
We believe what we have developed with support from the Carbon Trust is very much at the leading edge of the industry but as the new scope 2 guidelines are more consistently adopted by businesses, providing this level of transparency and confidence will increasingly be expected as standard. We hope this will help businesses realise a more tangible value from purchasing renewable electricity which will in turn stimulate demand in future.
As recent policy changes have created constraints to further growth in renewable capacity, consumer demand could play an increasingly important role in helping to shape future support for renewable deployment and the decarbonisation of energy in the UK.
Next week I’ll be talking about the energy label we’ve developed to support businesses buying renewable.