Net zero energy procurement: what you need to know

Many businesses have net zero emissions targets, but greenwashing can make things difficult.

Many businesses in the UK now have net zero emissions targets in place and are developing pathways to get there. The procurement and use of renewable energy to heat and power our buildings will play a critical role – but cutting through the greenwash can be a challenge.

Cue new guidance from the UK Green Building Council (UKGBC) on how to ensure that your green energy procurement will have a genuine impact on emissions reduction. In this piece we provide a short explainer on the recommendations.

Renewable electricity procurement

UKGBC’s guidance sets out three principles that must all be met to achieve a “high quality” renewable procurement route:

  1. There should be exclusive ownership of the energy attribute.
  2. The energy must be from renewable, non-fossil fuel energy sources.
  3. It must provide credible additionality.

Additionality – and the problem with REGOs

The principle of additionality is critical to the guidance: it means an organisation’s procurement choice should directly result in increased renewable energy generation (and therefore genuine emissions reduction).

But, as the UKGBC points out, “at the time of publication, only three UK suppliers have been recognised by Ofgem to provide additionality”. Good Energy is one of them. We generate renewable power from our own wind and solar farms and buy renewable power from small independent renewable generators. Added together, it matches the amount of electricity consumed by our domestic and business customers across the UK.

The problem, explains the guidance, is that for the vast majority of so-called “green tariffs” on the market, this isn’t the case. A recent report by the Climate Change Committee identified that the procurement of renewable electricity is currently having a limited impact, and in many cases, no impact at all on emissions reductions.

One of the issues lies with the REGOs market: REGO certificates can be sold independently to the power itself – this is referred to as being ‘unbundled’. As the guidance explains, “in practice this means that suppliers could purchase fossil fuel power but sell it as a green tariff or 100% renewable electricity if supported by an equivalent amount of REGO certificates.”

Recommended routes for procuring renewable electricity that meet the three principles

Achieving truly green electricity procurement

The message, in short, is that if you’re looking to procure renewable electricity via a green tariff, you need to check how the supplier is sourcing their electricity.

A simple question to ask is, ‘how much of the green electricity you supply each year is backed by agreements with renewable generators, and how much is just backed by REGOs?’ If any of it is just REGOs, without also buying the power to go with them, then it’s not additional, and it’s not driving the growth of renewables in the UK.

Our greenwashing FAQs explain further.

Green gas procurement in a nutshell

Around 75% of the UK’s heating demand in buildings is met by gas, most of which is derived from fossil fuels. Decarbonising the gas grid is one of the biggest challenges for the UK to overcome as part of its transition to net zero – and it’s going to take time.

So to achieve a genuinely net-zero building, the UKGBC guidance recommends:

  • Designing energy systems that are compatible with being powered from renewable sources (at the design stage for new buildings, or at the next system replacement cycle for existing buildings).
  • Organisations currently on an existing gas system are encouraged to procure green gas where feasible, such as through a gas purchase agreement (GPA) or green gas tariff. In the case of green gas tariffs, suppliers must disclose the proportion of the tariff that is certified biomethane, and whether the gas and certificates are bundled or not.

Green gas: The Good Energy approach

Right now, there just aren’t enough biogas producers to meet the UK’s gas demand. So Good Energy supplies 10% biogas – as this represents the maximum percentage of the UK’s gas demand that can be met by sustainable, UK produced biogas. We then offset the rest by investing in verified carbon reduction projects in India, China and Turkey. All three projects focus on biogas generation: we’ve chosen them because they have benefits that stretch across a number of the UN Sustainable Development Goals, from Climate Action and Affordable Clean Energy to Health & Wellbeing and Gender Equality. You can find out more about them here.

If you’d like advice on procurement options to help meet net zero goals, get in touch for advice. You can also visit our website to find out more about our fuel mix, and what we do. 

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