In recent years, energy companies have offered ‘Green’ or ‘Renewable’ Tariffs which are not 100% renewable, resulting in ‘greenwash’ accusations. In the last 18 months, the development of UK solar and off-shore wind farms has been supported by large organisations’ procuring large volumes of power ‘direct’ from renewable energy plants via Corporate Power Purchase Agreements (CPPAs).
A CPPA allows corporate consumers to purchase power on a long-term basis directly from renewable energy generators without being co-located. This is an alternative to the traditional model where a utility purchases power from lots of generators, transports it on the electricity grid, and then sells power to consumers. CPPA’s are long-term agreements (typically between 5 to 20 years) and provide price certainty for both the generator and the corporate consumer, using fixed or floor pricing structures.
The Challenge and The Opportunity
The disparate nature of property portfolios has been a barrier to smaller energy consumers being able to access the benefits of the CPPA with renewable energy generators.
Low Carbon Alliance is working with a licensed energy supplier to offer consumers simplified CPPA contracts, to enable landlords and occupiers of multiple commercial properties to access the benefits of CPPA’s.
Procuring renewable energy directly from a UK renewable energy plant will result in the reduction of scope 2 emissions. It will also provide an opportunity for the consumer to demonstrate to stakeholders how it is reducing the emissions from their portfolio, whilst also supporting the development of renewable energy plants in the UK.