Scott Parlett, head of public sector at BiU, explains that there is no “one size fits all” solution for public sector organisations who want to switch to greener energy.
For the public sector, climate change is no longer a future threat; it’s already here. The most recent survey from the Local Government Association found that eight out of ten councils in England have been affected by a climate-related incident in the past five years, mostly flooding. Other public sector organisations are dealing with different climate-related problems, such as changing migration patterns and health issues.
So most public sector organisations are now fighting on two fronts: adapting to the changes we face, while trying to mitigate their own effect on the climate by cutting emissions. And despite limitations on their budgets and powers, many are making progress that puts the private sector to shame.
Decarbonising your energy supply is a key part of any emissions reduction strategy, and it’s worth considering all the possibilities before deciding how to do this.
Switching to a green tariff
Switching supplier may seem like a simple matter of choosing the best-value green tariff, but it’s not quite that straightforward. The UK’s system of secondary trading in green energy certificates (known as REGOs) means that it is both legal and common practice for suppliers to advertise “100% renewable” tariffs while really getting most of their energy from fossil fuel sources.
You have to ask potential suppliers directly how much of their energy mix comes directly from renewable sources. The more detailed the information you get, the better.
Geographical location of your supplier’s sources is important too. If your organisation is a local authority or has other strong links to the local community, it would be preferable to support the local economy by choosing a supplier who invests in renewables projects in your area.
Corporate power purchase agreements (CPPAs)
If you’re looking for more control over the source of your energy, a renewable corporate power purchase agreement (CPPA) may be a better option. Rather than using a supplier, you sign a contract directly with an electricity generator, typically for a period of between five and 20 years.
There are many benefits to this route. At a time of shrinking public sector budgets, a PPA is likely to deliver savings by giving you energy that is cheaper than market price. You also have more choice about how you want the pricing to work. For example, you may want pricing to track wholesale energy prices so that you benefit from any future lockdown-related price plunges. Or you may want an option that delivers more certainty in a volatile market.
Another benefit of PPAs is that you may be able to get one with a local generator, supporting green jobs and infrastructure in your area as well as decarbonising your organisation’s energy supply.
However, while the range of possibilities is an advantage, it can make it hard to choose the right contract for your organisation. BiU’s CPPA procurement service can offer expert advice on this.
Generating your own energy
For even more control over the source of your organisation’s energy supply, you could consider owning and managing a renewables project (or several). Installing solar panels on your organisation’s buildings is one option, but the project doesn’t necessarily have to be on site. Morriston Hospital near Swansea and New Cross Hospital in Wolverhampton are both working on full-scale solar farms, which will supply their respective hospitals but are located off site.
The word “offsetting” says “greenwash” to many people, but unfortunately you may not be able to avoid it. If your organisation uses gas, it is likely that a high proportion of it comes from fossil fuel sources, because there simply isn’t enough green gas to go round. This means that most “green gas” tariffs are “greened” through offsetting. You’ll need to do your due diligence by checking that they use a recognised offsetting scheme for this.
Another option is to think beyond just “greening” your supply to the other impacts your organisation could have. Could you support a local renewables project? Bristol City Council and the West of England Combined Authority have invested in a community-owned wind turbine that will power thousands of homes and also create an income stream to support core council services.
It pays to get advice
At BiU, we work with many public sector organisations to help them explore their energy sourcing options. We can help you come up with a strategy to fit your organisation’s culture and resources. Working in the public sector means facing difficult decisions on a daily basis, but our expertise can make deciding on your energy supply a lot less tricky.