Rather than asking if a business can afford to supply its own renewable energy, the question should be can it afford not to? Bruce Woodman, Managing Director of low carbon energy specialists, Pure Energy Professionals (PEP), looks at the benefits of Corporate Renewable Energy Ownership and proposes a proven pathway to securing low-cost clean energy for the long term.
Companies continue to seek ways to insulate themselves from rising and volatile global energy markets, while providing a more secure and sustainable future for employees, shareholders, suppliers and customers. And the answer for many lies in Corporate Renewable Energy Ownership (CREO).
What exactly is CREO?
CREO is where a business produces its own clean energy for self-consumption to reduce grid electricity and, potentially, gas purchases. In-house renewables ownership allows a company to gain and retain greater control of their electricity, heat and fuel supplies. This ultimately results in better financial budgeting and reduces the impact of unforeseen price spikes. It also provides a direct route to getting carbon emissions down, setting a practical course to deliver net zero goals.
CREO – a commitment that goes beyond greenwashing
Owning sufficient renewable energy generation – typically large scale wind and solar PV –
sends a strong message about a company’s commitment to sustainability and the future of its business.
Yet, the question arises, does CREO pay? With a good nearby wind and solar resource within 5 to 10km, the answer will almost certainly be “yes”. The cost of generating power and transporting it to the site of use will likely be lower than grid electricity, with a more predictable price long into the future. It will also be genuinely “green”.
While at country level, the UK and others have legally binding obligations to reach net zero in 25 years’ time, individual businesses also need to achieve their own net zero targets – regardless of whether national systems are able to decarbonise in that timeframe. But rather than ask if a business can afford to supply itself from renewables, the question should be ‘can it afford not to?’
Along with the quality of the nearby wind or solar resource, the biggest influence on energy cost is the cost of capital. If that can be fixed long-term then the year-to-year variability should be small. Then the company has the benefit of low-carbon energy for the foreseeable future, as well as a handle on energy budgets. The business can then be largely immune from energy market volatility.
Renewable energy infrastructure is capital intensive – and sufficient investment for large scale decarbonisation may not be readily available from internal resources. It is common for renewable energy projects to be funded to a large extent by limited recourse loans secured on the project cashflows, and ultimately the assets themselves, rather than a corporate guarantee.
Beginning a CREO strategy
Understanding the nature of an organisation’s demand and specific site usage is crucial from the very start. It enables the scale of generation to be assessed and onsite or nearby locations to be evaluated. Once the company’s overall energy consumption profile is known, the usual start point is the site where energy consumption is highest. The site itself and surrounding area can be quickly assessed for its suitability for renewable energy generation. If it becomes clear that there are no options, then the next largest point of consumption can be assessed, and so on.
Having identified a site, an initial desktop study covers key development issues, considering design options and potential risks. If the site appears worthwhile, landowners – most of whom are positive about earning long term lease payments – are approached. Furthermore, energy infrastructure that directly supports local businesses, investment and employment is typically more acceptable to local communities than projects backed by comparatively faceless national or international power developers.
Once the planning stage is completed, the project can move ahead to financing, procurement, construction and operation. A skilled and experienced renewable energy generation partner will assemble an expert team to ensure smooth running and optimal value, including the necessary permits, land and grid agreements.
Lessons from CREO pioneers
Connecting renewable energy generation directly to a company’s premises is not new. It is a proven path for early pioneers such as AG Barr, Asda, and Tesco. IKEA is a notable early and large adopter. The Swedish furniture retailing giant has engaged PEP as its renewable energy specialist for over 15 years across whole project lifecycles in North America and most of Europe, as well as the UK. Today, IKEA has a multi-billion initiative to target 100 percent renewable energy consumption across its whole value chain and beyond. IKEA’s largest franchise holder, Ingka Investments, has also invested and committed more than €4 billion into renewable energy projects to date.
In addition, PEP supported Aviva Investor’s entry into renewable energy generation, providing investment support, construction, operations and asset management for many years across 25 UK wind projects.
This article appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.