Last week saw the release of the UK Green Building Council’s (UKGBC) Renewable Energy Procurement & Carbon Offsetting Guidance for Net Zero Carbon Buildings (Guidance), which is intended to help solve this very conundrum. Over the last eight months, Burges Salmon has formed part of and been supporting the industry Task Group facilitated by UKGBC to put together the Guidance.
The Guidance provides clarity for the property and construction industries on the procurement of high-quality renewable energy and carbon offsets for net zero buildings and organisations in the UK, through offering a consistent set of principles and metrics and builds on UKGBC’s Net Zero Carbon Buildings: A Framework Definition.
We are seeing varying approaches to this issue in the market, but are finding that our clients are often focusing on how they can secure a direct link with renewable energy generation in order to clearly evidence:
- an exclusive right to the energy attributes of the renewable energy generated (via the purchase and retirement of REGOs); and
- additionality (meaning that via its actions, the customer is contributing to additional renewable energy generation capacity being installed on the system that, but for those actions, wouldn’t have been installed).
The reasons for this emphasis differ from organisation to organisation, but are often linked to the organisation’s CSR agenda and the need to decarbonise to meet its net zero targets.
The Guidance highlights that on-site renewable energy sources should be prioritised. However, where spatial and locational restrictions prohibit this, a corporate power purchase agreement can provide a customer with the direct link to renewable generation which will enable it to meet its CSR goals.
In the release of this Guidance, it is extremely encouraging to see further recognition of the importance of organisations’ energy procurement decisions in the UK’s pathway to Net Zero.
We have seen a sharp rise in interest in this issue from our clients and are currently working on both private wire arrangements and corporate power purchase agreements across the spectrum of sectors, including for local authorities, utilities and corporates. Whilst there continues to be nervousness around the transparency of green suppliers’ green tariffs, these routes can provide real confidence for organisations where procurement of high quality renewable electricity is now a key strategic focus.
It is definitely a learning curve for everyone, in part because there isn’t necessarily the level of transparency that we would like to see in the market currently, particularly on the renewable energy side