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ENERGY WEEK, WE ANSWER YOUR QUESTIONS

June, 2020

Transitioning to renewable energy is one of the most important things we must do to mitigate climate change. But discussions around energy are often full of jargon, and there is a lot of misinformation and outdated information online. For Energy Week, we cut through the noise to provide simple advice on sourcing renewable energy for your business or home. According to the Centre for Energy and Climate Solutions, energy production accounts for 72% of the world’s annual greenhouse gas emissions. You could be forgiven for attributing this trend to heavy industry or to flaring at oil and gas sites, but 31% of annual emissions are attributable to the electricity and heat used in our buildings. As such, transitioning to renewable energy should be a vital part of any sustainable business strategy, and on the to-do list of any environmentally-minded homeowner. Ahead of EU Sustainable Energy Week 2020 (22nd-26th June), we’ve researched the answers to seven of the most commonly-asked questions on renewable energy, to help you bust myths and accelerate your low-carbon journey.

Do low-carbon, clean and renewable mean the same thing when it comes to energy?

Although these terms are often used interchangeably by businesses in marketing materials, the simple answer is no. In its calculation of energy statistics, the UK’s Department for Business, Energy and Industrial Strategy (BEIS) only classes generation methods which rely on wind, solar, geothermal or water energy as “renewable”. Figures for “low-carbon” generation also take nuclear power and biomass into account. This is because, while nuclear fission does not give off greenhouse gases, mining uranium has a significant carbon footprint. Moreover, the waste produced by nuclear power plants is toxic, hard-to-recycle, and continues to give off heat after disposal. As such, it cannot be classed as completely renewable. Another buzzword in energy at the moment is “net-zero”, after the Intergovernmental Panel on Climate Change concluded in its landmark 2018 report that global carbon emissions would need to reach zero if we are to avoid the worst impacts of global warming. “Net-zero” essentially means that the emissions associated with something (be it a nation, business or energy tariff) add up to zero on balance, not that it has reduced all of its direct emissions to zero. It can still emit, so long as it “offsets” those emissions through investments which remove or mitigate emissions elsewhere.

If you are unsure as to how any government, local authority or business is defining “renewable”, “low-carbon” or “clean” when it comes to energy, you can (and should) ask them.

Is renewable energy more expensive?

In a word, no – although it used to be. A comprehensive study from the International Renewable Energy Agency (IRENA) concluded last year that onshore wind and solar power are, in the vast majority of countries, cheaper than fossil fuels, even without subsidies. It found that wind power cost an average of between 0.03p and 0.05p per kilowatt-hour in 2018, compared to an average of between 0.05p and 0.13p per kilowatt-hour for renewable energy. Bringing these figures down to the scale of your domestic or business energy bill, it is likely that switching to 100% renewable electricity will not increase costs. In fact, in Which?’s most recent benchmark of the best energy suppliers in the UK, the top-five consists exclusively of smaller utilities which offer 100% renewable tariffs as either optional or standard. This was not always the case – in decades past, renewable energy was more expensive, due to the cost of researching, developing and scaling what were then new generation technologies, and of improving distribution infrastructure in tandem. Policies which had been designed to promote fossil fuels also served as barriers. Going forward, the direction of travel is clear – renewable energy is only set to become cheaper as governments set stronger climate targets, investors scale back fossil fuel support and technologies scale up.

I’ve heard that renewable energy is not reliable. Can we switch to renewable energy while maintaining energy security?

As explained by renowned climate researcher and thought-leader Naomi Klein in her book ‘This Changes Everything’, coal became so popular during the Industrial Revolution because it enabled people to generate heat and electricity at any time. Mills, in contrast, were reliant on the correct weather conditions. While much progress has been made in improving the efficiency of wind and solar generators over the years, there’s only so much wind energy you can generate when the wind doesn’t blow, or solar energy to be had during nighttime. A 2017 study by battery developers Eaton, in partnership with the Renewable Energy Association (REA) and Bloomberg New Energy Finance (BNEF), concluded that the intermittency of wind and solar generation will prove a significant challenge by 2040. It found that entire weeks and even months will occur where wind and solar produce little to no energy, with other resources needed to plug a 72% to 80% demand gap. But this does not mean that, if you are on a renewable energy tariff, you are any more likely to experience power outages. It is the responsibility of policymakers, regulators, utility companies and other actors to ensure that the rise in renewable energy demand and generation is complemented with significant investment in energy storage. This way, excess energy generated renewably can be stored and then used during dips in generation.

What options are there for sourcing renewable electricity for my home?

All UK electricity suppliers are obligated by law to purchase some renewably generated energy – so the good news is that you are already procuring some renewable energy. But the most common course of action for domestic energy customers looking to go 100% renewable is to change tariff. A green tariff does not usually mean that there is a direct chain of custody from renewable generation facility to your home. Suppliers typically “match” their demand by purchases of renewable energy on the customer’s behalf, rather than generating and ring-fencing their own electricity. This system is not foolproof, so look for suppliers who clearly list all of their sources, such as Ecotricity or Good Energy. A less commonly-taken route (due to its upfront cost) is to install home solar. Rooftop solar arrays are unlikely to meet the entirety of your home’s energy demand but will reduce bills. Many big-name brands now offer a home solar service, including IKEA and Home Depot.

What options are there for sourcing renewable electricity for my business?

As with domestic energy sourcing, most SMEs opt for a change of tariff. For bigger businesses sourcing a significant amount of energy, Power Purchase Agreements (PPAs) are more popular. A PPA is a financial agreement whereby an energy-using business will invest in the development of a new renewable energy project alongside an energy-generating business. In return, the energy consumer will be supplied with a certain amount of energy from that facility under a long-term contract, typically with a duration of 10-20 years. Businesses with a significant amount of land or roof space may also (or alternatively) wish to invest in onsite generation. Ikea, for example, has almost one-million solar modules and 534 wind turbines installed across its global estate. Target and Amazon also have huge amount of onsite solar generation. The most significant benefit of taking this course of action is a reduction in energy bills. Reputational benefits are also to be had, and if your business ever moves location, facilities with built-in solar will undeniably prove more attractive to new tenants. Whether you’re exploring onsite generation or PPAs, it is always best to invest in expert advice to ensure you are best-placed to face any challenges and to reap the maximum benefits. If your business is hoping to drive change beyond its own operations and champion a broader transition to renewable energy, you may wish to join a collaborative initiative such as The Climate Group’s RE100 or the We Mean Business Coalition.

Do I still need to be energy-efficient if I’m using renewable energy?

Yes. The fact that renewable energy is better for the environment than fossil fuels does not mean it is a resource that should be taken for granted. The more energy-efficient your home or business is, the less you will spend on your utility bills, regardless of whether you are sourcing renewable energy or not. If you are on a fixed tariff, meaning that you pay the same regardless of how much energy you consume, it is still worth saving energy. Suppliers may choose to remove you from a fixed tariff if you exploit it, for one, and saving energy helps the grid to maintain balance for the benefit of all who use it.

When organisations say they’ve reached 100% renewables, they’re usually talking about electricity and excluding heat. Why is that?

Many of the technologies used to generate electricity renewably now exist at scale, and are, thanks to policy and business support, both technologically advanced and cost-effective enough to compete with fossil fuels. The same sadly cannot be said for most low-carbon or renewable heating technologies and, as a result, 85% of the heat consumed by buildings across the UK on an annual basis is attributable to gas, with similar quotas in most developed nations. Energy Systems Catapult has documented several reasons for this, including poor policy planning on local and national scales, and the fact that there is no “one-size-fits-all” technology that would be unanimously appropriate for all organisations in all regions. This is not to say that no solutions exist and no progress is being made. Your business may wish to explore ground-source heat pumps, air-source heat pumps or alternative fuels, and, if so, you can seek out a specialist consultant. If you are a domestic energy user, you could encourage your local authority and developers working in your area to invest in such technologies.

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