Reflecting on 10 years since the Climate Change Act was passed into law

10 years on, we reflect on the targets set out in the Climate Change Act of 2008, and explore our progress towards a low-carbon economy. Mike Shirley, Head of Marketing, considers our adoption of renewable energy and the ways in which we can garner an increased interest in the need to accelerate our transition to a more sustainable energy future by building additional renewable energy capacity. 

The Climate Change Act of 2008 set out a target to reduce net UK carbon by the year 2050 to 20% of a 1990 baseline. Last year, the Climate Change Committee reported that emissions had fallen by 43% and the economy had grown by two thirds.

However, the need to reduce total emissions by an additional 37% remains as a part of the Act. Along, with the need to limit a global temperature rise to below two degrees Celsius above pre-industrial levels in accordance with The Paris Agreement. We believe that the increasing adoption of renewable energy will help to accelerate this transition to a more sustainable energy future and ensure we meet our national and international targets.

For individuals and organisations who keen to explore renewable energy, is there a ‘right’ place to start?

Signing up to a renewable energy tariff is a real low hanging fruit. However, it is important to understand what you’re actually buying. To truly add your consumption weight to the decarbonisation process, you need to be clear that the renewable energy you are buying is authentic, is backed by Renewable Energy or Gas Guarantees of Origin (REGOs & RGGOs) and is validated to be allocated against your supply.

Are green tariffs really valid?

REGOs are the way forward, but there is a difference between simply having REGOs in your portfolio and tracking renewable electricity from the original point of generation, through the system to the end consumer. For a consumer to receive the ‘value’ of the renewable electricity, they should ensure that they are the only consumer benefiting from that MWh of electricity. As more consumers commit to renewable electricity, the REGO will become the core differentiator and will carry the value differential between conventional and renewable tariffs.

What more can be done to maximise the uptake of renewable energy?

A great option to stimulate investment is the use of a corporate power purchase agreement (PPA) where the buyer agrees to procure energy over a long period from a proposed generation plant in return for long term price stability, and a supplier agrees to manage the energy off-take and billing. The developer can use this commitment as collateral to raise funds to build the new generation plant. SmartestEnergy are actively looking to support these solutions and will sleeve the energy into our customers’ contracts.


Is the current policy and market landscapes good or bad for the renewables market?

The focus of policy has shifted from specifically supporting renewable generation to making the system more flexible to cope with the growing proportion of intermittent generation, which reached a record high of 31.7% in the second quarter of this year. This provides different challenges to the system and creates opportunity for innovation we haven’t yet imagined. This in turn works hand-in-hand with the continued development of renewables to increase renewable generating capacity whilst reducing energy intermittency.


What’s the benefit of renewable energy?

Renewables essentially provide zero marginal cost electricity. This will fundamentally change the operation of the UK. As the value of generated electricity drops and generation rises, we could have near-unlimited low, or no cost electricity, which releases many new opportunities, not least in heat and transport. We are starting to see electric vehicles and heating innovations hit the market but not yet at scale, and the opportunity to cheaply power these technologies could revolutionise the sector.
What plans do you have to shape the renewable energy industry in the future?

We believe that all customers will become ‘prosumers’ – producers and consumers of electricity – and providers of balancing services (either on their own sites or externally for value). We are an asset-lite energy company that is transitioning our business to provide the appropriate services for that new reality.

What is the long-term outlook for renewable energy?

Technological and consumer behaviour changes will be supported by automation, miniaturisation and personalisation, making systems more prevalent and more local whilst removing the need for human intervention to balance these new smart grids. Companies and communities will be able to largely support themselves, benefiting from cheaper and more secure supply.

Interested in hearing more perspectives on this topic?

Read the extended Q&A published on LinkedIn covering the above questions in more detail. In addition to my responses above, additional perspectives on the future of ‘green’ generation are provided by:

  • Sam Kimmins, Head of RE100, The Climate Group
  • Nadia Smith, Policy Analyst, Renewable Energy Association
  • Ben Brown, Energy Bureau Manager, Landsec