Why independent energy generators are crucial to net zero
Independent energy generators have an important role to play in helping the UK to achieve net zero, as well as improving energy stability and affordability for businesses, says Vish Sharma, Head of Power Purchase Agreements at npower Business Solutions.
In its latest Net Zero Progress report to the UK Parliament, the Climate Change Committee found that current plans and policy are unlikely to achieve the legally binding target of reaching net zero by 2050. In addition, the Net Zero Review, which was led by Chris Skidmore MP and published in January 2023, included several recommendations to accelerate progress, such as ways to incentivise businesses and targets for deploying more homegrown clean energy.
The UK Government’s recent response - badged by many commentators as ‘Green Day’ - on 30 March 2023 saw the publication of ‘Powering Up Britain’. The extensive document sets out a number of pledges, including a plan to accelerate the deployment of renewables. More specifically, it outlined its intention to support the generation of up to 50 GW of offshore wind by 2030 and quintupling solar photovoltaic (PV) power by 2035.
The good news is that 2022 was widely reported to have been a record breaking year for renewable energy generation in the UK, so we are already making significant strides towards reducing our reliance on fossil fuels.
As such, the opportunities for independent energy generators are extensive, not just to assist the country in reaching net zero and increase energy security, but also to supply corporate energy buyers with a reliable, sustainable and affordable power - a top priority for many organisations in today’s uncertain times.
The role of the independent energy generator
Independent energy generators are most commonly privately held facilities, corporations or cooperatives with sustainable energy generation technology on their premises.
This power, whether generated on agricultural land, data centres or through solar PV at a warehouse and logistics site, for example, is then sold and distributed to meet demand, including supplying businesses - usually via a Power Purchase Agreement (PPA).
Embedding independent energy generation into the UK’s wider energy infrastructure ultimately improves the reliability of our renewable energy supply and contributes to a wider energy resilience by reducing draw down from the grid.
Many businesses are showing a significant interest in installing on-site generation. Our most recent Business Energy Tracker report revealed that, in 2022, just over one in four (27%) businesses said this was in their plans. 2023 saw this rise to over a third (36%), with solar PV proving to be the most popular solution.
At the same time, we are also responding to an understandable increase in customer demand for a renewable, sustainable energy supply. As such, there is a natural fit between independent generators who want to sell their power via a PPA, and meeting the demand from corporate buyers.
Independent energy generation and the path to net zero
Without question, independent energy generators have the potential to make a hugely significant contribution to getting the UK to net zero. We just need to pick up the pace if we are to hit targets in time.
The newly formed Department for Energy Security & Net Zero (DESNZ), which replaced the Department for Business, Energy and Industrial Strategy (BEIS), recently published its first Energy Trends report, which found that overall energy production from renewable technologies hit an all time high of 41.4% last year, largely due to wind and solar PV generation.
This is a strong foundation on which to further develop the UK’s renewable energy output. In ‘Powering Up Britain’, the UK Government also pledged to reform planning to facilitate the faster deployment of much needed renewable energy projects. Streamlining the planning process and empowering local planning authorities to make their decisions more quickly will hopefully unlock further opportunities for current and future generation projects.
As a result, independent energy generators will undoubtedly play an important part in both supporting the growth of homegrown clean energy and helping businesses procure their power from renewable sources.
With more organisations looking for cleaner, greener and more stable energy solutions, the role of independent power generators will be critical to the provision of sustainable and affordable energy both now and in the future.
npower Business Solutions latest guide for energy generators can be downloaded here.