Green power. options

Transcription

1 Green power options How a our universities can hep stop cimate change by switching to green eectricity In January 2001 Peope & Panet caed on every UK university to switch to green eectricity, generated from renewabe sources that do not contribute to cimate change. Our campaign has met with considerabe success, initiay in October 2001, when Loughborough became the first university in the country to switch to using 100% green eectricity. Since then at east 10 other universities have made the switch. However over recent months various caims have been made to the effect that universities cannot switch to green eectricity - either because suppies are not avaiabe, or are prohibitivey expensive. But how accurate are these caims? To answer these questions Peope & Panet has cosey examined the suppy options which exist for universities that wish to switch to green eectricity. This report summarises our findings and detais the options that do exist for universities to make the switch. October 2002

2 Suppies of green eectricity are currenty avaiabe. suggest that those universities were unaware of a suppy options. The most recent suppy contract was Our research shows that green eectricity is avaiabe, and that any caims to the effect that it has run out are incorrect. agreed in August 2002 to suppy green eectricity to the universities of Bradford, Hu and Humberside. Within this dea Bradford University wi be suppied with There are 7 suppiers who are currenty offering green eectricity products to business customers. 100% renewabe eectricity - 15 miion kwh - from October In this rapidy deveoping market new In the course of preparing this report two of these, Ecotricity and Scottish & Southern Energy (both of whom suppy nationay), expicity confirmed that they can currenty provide universities with renewabe eectricity. Over 14 universities are now being suppied with renewabe eectricity, in proportions varying from 2% to 100%. In January 2001 ony 3 universities were in this position and suppies are continuay becoming avaiabe. Every university has a different eectricity demand pattern and consumes a different amount of power. This variabiity makes it impossibe to estimate precisey what premium (if any) universities are ikey to have to pay for green eectricity in the current market. However there is good evidence that green eectricity is avaiabe on competitive terms. no UK university was suppied with more that 40% green eectricity. In the first 8 months of 2002 at east 7 universities have entered into new green eectricity contracts. These deas were signed after other universities had caimed that suppies were not avaiabe, which 3 of the suppiers featured in this report charge no premium for their green eectricity product. At east 7 of the universities who are aready suppied with green eectricity negotiated contracts that are cost-neutra, meaning that when the effects of the Cimate Change Levy Which Universities are currenty suppied with green eectricity? Start date University Renewabe Suppier suppy % October 1999 Leeds Metropoitan University 30 - Apri 2000 Edinburgh 40 Scottish Power - York 10 - October 2001 Loughborough 100 British Energy October 2001 Surrey 6 Scottish & Southern Eectricity November 2001 Sussex 100 Ecotricity November 2001 Sheffied 2 Ecotricity/UK Eectric Power December 2001 Sheffied Haam 5 Unit [e] January 2002 Pymouth 10 Bizz Energy March 2002 Bristo 64 - Juy 2002 Gasgow 10 Scottish Power October 2002 Bradford 100 Bizz Energy October 2002 Hu 68 Bizz Energy October 2002 Huddersfied Major contract Bizz Energy Source: UK universities isted

3 are taken into account they are paying no more for green eectricity than they woud be paying for norma brown eectricity. eectricity suppiers to source a percentage of their power from renewabe sources. This is currenty 3%, rising to 10% by A system Ceary green eectricity is not as readiy avaiabe as brown suppies. Not a eectricity companies currenty provide aternative renewabe suppy products. As a resut switching to green does take more than just a phone ca to the current suppier. Instead this important move requires a modest commitment to seek out the best suppy options within what is a new and rapidy deveoping market. of Renewabe Obigation Certificates (ROCs) certifies the energy is from green sources (wind, soar, sma hydro, biofues). Suppiers without their own renewabe generation capacity, or with insufficient capacity to meet their quota, can buy ROCs from suppiers with surpus certificates. However now that a suppiers have to either generate some green energy (or purchase certificates), there is no guarantee that However there is every reason to beieve that any persistent and committed university wi quicky be abe to secure suppies at a competitive price. purchasing a CCL-exempt suppy product wi ead to environmenta benefits. In fact, according to energy market anaysts Patts, in certain cases business customers are paying extra for power that woud be generated even if Not a green power nobody paid a premium for green power. options ead to environmenta benefits. UK universities may have more than one reason Which are the best suppy options? for wishing to source their eectricity requirements from renewabe energy. Apart from heping to ensure that they meet their environmenta responsibiities and the reputationa vaue of being abe to inform students, staff and other stakehoders that they A university that wishes to purchase green power wi want to ensure that any premium they pay wi ead to rea environmenta benefits. However this wi ony be the case if the suppy product: are powered with green energy, there is often an supports new renewabe generation, or; economic incentive. is additiona to the suppier's renewabe Power generated from renewabe energy (aong obigation. with power from high quaity combined heat and power generation) is exempt from the Cimate Change Levy (CCL). The Levy is a 0.43 pence per kwh tax charged as part of the government's commitment to meet its target to cut greenhouse gas emissions under the terms of the Kyoto agreement. In response many eectricity In order to hep universities know if this is the case, Peope & Panet, using information from the Patts European Utiities Retai update, suppemented with its own research, has ranked the various green power products according to their greenness (see tabe beow). Our two main criteria were: suppiers have aunched CCL-exempt suppy products that aow universities to take advantage of the exemption. However, another government initiative designed to promote renewabe energy means that not a these suppy products wi actuay ead to environmenta benefits. The Government Renewabes Obigation, introduced in Apri 2000, egay requires a Whether suppiers support additiona renewabe generation capacity, either by investing proceeds in new capacity or by vountariy retiring ROCS (removing them from the market) The energy source, with new, genuiney renewabe sources ranked higher than arge hydro or waste incineration.

4 Which are the greenest suppy options for universities? Rank Suppier Power source Notes 1 Unit[e] 75% wind, 25% sma hydro Green ony suppier. Retires ROCs to ensure additionaity 2 Ecotricity 100% wind Green ony suppier. Some ROCs sod to other suppiers 3= Bizz Energy 90% andfi gas, 10% wind Makes contribution to additiona renewabe investment 3= Scottish Power Wind, andfi gas, hydro (mix undiscosed) Invests proceeds in additiona renewabe capacity 5= British Gas Wind, andfi gas (mix undiscosed) No proceeds invested in additiona renewabe capacity 5= Scottish & Southern Large hydro, wind, andfi gas, waste No proceeds invested in additiona renewabe capacity incineration (mix dependent on product) 7 Powergen Mix undiscosed, caimed to be mosty wind No proceeds invested in additiona renewabe capacity Source: Patts/Peope & Panet As can be seen from the tabe, the resuts of this research show that in genera it is better for universities to purchase eectricity from green ony suppiers. These suppiers have a Suppier profies: green-ony suppiers UNIT[E] deeper commitment to environmenta sustainabiity than traditiona suppiers and are argey driven by the aim of increasing UK renewabe generation capacity. Customers receiving suppy for these companies can be assured that they are making a rea contribution to growing UK renewabes generation capacity and combating cimate change. In addition there are other traditiona suppiers, notaby Bizz Energy and Scottish Power, who are aso suppying products that shoud ead to Unit [e] is a 100% renewabe eectricity suppier that does not offer any power from non renewabe sources. It is currenty the ony suppier vountariy retiring ROCs from the market, to ensure additionaity. It currenty retires 7% of the certificates associated with the green power it suppies, meaning that Unit [e] customers can rest assured that at east 7% of the power they consume is additiona to green power that is otherwise incuded in the renewabe obigation targets. environmenta benefits, abeit with ess certainty than the green-ony suppiers. It is definitey worth taking to these suppiers. Our ast concusion is that in deaing with a suppiers, universities shoud ask directy about what environmenta benefits - and specificay what additionaity - possibe purchase decisions wi have. As ong as care is taken in seecting suppiers, universities wi be abe to avoid products that sound green but make itte positive difference. Unit[e] currenty suppies Sheffied Haam University. Athough at present it can ony suppy a imited number of other universities, it is keen to enter into partnerships with committed customers, noting that one thing that is not imited in the UK is the resource, the tota wind capacity in the UK is one of the argest in Europe and is capabe of suppying over 3 times the current UK eectricity suppy. Unit [e] state that to tap into these resources deveopers and suppiers, ike ourseves, need foresight and commitment from key institutions. Any premium that customers pay to buy power from Unit [e] is justified on the basis that it comes from the ceanest of UK sources - 75% from wind and 25% from sma hydro. Athough Unit [e] does not currenty own generation capacity, it says it wi soon be investing in its

5 own capacity foowing a successfu initia their own sites or the customers and. In pubic share offer in Juy return for a 12 year power purchase agreement a university woud receive an excusive, ong-term source of green eectricity for ess than the price of brown at ECOTRICITY no cost or financia risk. Ecotricity offers genuine green eectricity from UK wind generation. Unike Unit [e], Ecotricity does not promote additionaity by retiring ROCs from the market. Most are used to meet its own requirements, with 25% OTHER POSSIBLE SUPPLIERS Green Energy UK sod to other suppiers. However a the proceeds from the sae of ROCs are used to fund new capacity. They are currenty abe to suppy universities immediatey with 10% green eectricity, and then increase this by 10% every year for the next four years. The newy buit renewabe energy sources wi mean that in five years, 50% of eectricity wi come from new green sources. Suppier profies: traditiona suppiers BIZZ ENERGY Bizz Energy, a new entrant to the marketpace, ony suppies to business customers. It currenty suppies Bradford, Huddersfied, Hu and Pymouth universities. "Our focus is on new capacity - 10% A the green power sod comes from UK additiona new deep green eectricity per renewabe sources: wind and andfi gas. annum, an incrementa target which is 10 Bizz Energy ses a of the ROCs attached to times the Government's target for the same these saes to other suppiers, but does period," expained Ecotricity. support additionaity in that a proportion of Responding to concerns about avaiabiity Ecotricity stated that their scheme is not at a imited. We have enough in our reserves to suppy arge businesses and see no reason why this shoud change. the profits it makes on its CCL-exempt product is returned to the generators so they can invest in renewabe generation. Bizz Energy charges no premium for it s Greener Bizz product. On price they state that athough the price for brown eectricity hit rock bottom earier this year... we endeavour to match a competitor's brown price where possibe, however we most probaby wi not be in a position to match the absoute best price. However shoud we achieve an acceptabe price eve Ecotricity woud not charge a further premium as the percentage of green increments on a year by year basis. SCOTTISH POWER Scottish Power's Greensource tariff is one of the most popuar green power products amongst business customers. Whist it charges no premium, proceeds are invested in new capacity. This means that customers can support new renewabe generation without paying a premium. In addition, Ecotricity aso offer an extra suppy option for the more committed customer known as Merchant Wind Power. Under this scheme they wi suppy, insta A power sod under the tariff is UKgenerated and comes from wind, andfi and hydro. Scottish Power coud not discose how much power comes from each source. and run one or more wind turbines, either on

6 As with Gasgow University, Scottish Power imits new business customers to 10% renewabe suppy. generation. British Gas coud not discose source percentages but assured Patts that probaby a of the power suppied under this tariff comes from renewabes rather than CHP or waste incineration. It shoud aso be noted that the mix of generation types coud soon change. It does SCOTTISH & SOUTHERN Scottish and Southern Energy (S&SE) currenty provides over 35% of the UK's renewabe energy, mainy generated from arge hydropower not charge a premium for this product but no proceeds from the tariff are invested in additiona capacity. instaations in Scotand. S&SE currenty suppies customers UK wide, POWERGEN incuding Surrey University. S&SE offers two different products, a CCL-exempt product (which incudes 30% waste incineration and 20% arge hydro) and a 'greener' option from renewabe sources (5% wind, 95% hydro). None of the ROCs attached to these saes are retired from the market, nor does S&SE invest any of the proceeds from either product in new renewabe capacity. It does charge premiums on Powergen ony offers a CCL-exempt product, which appears not to promote any additionaity. It has not reveaed detais of its power sourcing, other than to say that this was mosty wind power. Patts were unabe to determine whether any of the rest comes from mixed municipa waste or CHP. It aso indicated that not a its power is sourced in the UK. a per contract basis. "A premium for the green tariff is justified on the grounds of high refurbishment and maintenance costs associated OTHER POSSIBLE SUPPLIERS with od, arge hydro stations (and their infrastructure), which receive no other subsidy," SWEB expained S&SE S&SE currenty has significant suppies avaiabe and woud be deighted to discuss the eectricity requirements of any UK university and to taior a package to the universities specific needs. Any university interested in being suppied with green energy shoud tak to us. What is green eectricity? Green eectricity is generated in a manner that both reduces carbon dioxide emissions and is environmentay sustainabe. In Peope & Panet s definition this means that With regard to price S&SE state they suppy at very competitive prices and that the utimate price paid by the individua university woud be dictated by a number of factors, incuding the it comes from the foowing renewabe sources: wind; hydropower; andfi gas; tida; wave; soar (photovotaic); geotherma and energy crops. customer s pattern of demand, and the amount and type of green required. This definition excudes two power sources that are sometimes caimed to be 'renewabe': nucear power and waste incineration. Both of these controversia sources have significant negative BRITISH GAS environmenta impacts, the atter being Centrica's British Gas Trading subsidiary offers a CCL-exempt tariff. Like Bizz Energy, a the power sod under this scheme comes from UK pouting in its own right as we as providing a disincentive to more sustainabe waste management strategies.

7 A question of commitment "Cimate Change poses a serious threat to mankind. It wi not go away - and the 'do nothing' option is not an option. We have to reduce greenhouse gas emissions." Michae Meacher MP Minister for the Environment remember that currenty universities are not paying the fu cost of their conventiona brown eectricity suppies. Athough industriaised countries ike the UK are causing cimate change, it is mainy the word's poor who are suffering the consequences. In the words of the Roya Commission on Environmenta Poution "The prices consumers pay for fossi fues do not, for Today, and ooking forward through the century, the ives and iveihoods of one biion peope are threatened by the effects of cimate change. By 2025 the United Nations estimates that over haf of a peope iving in deveoping countries wi be highy vunerabe to foods and storms. Cimate-reated natura disasters are increasing in frequency. According to Munich Re, one of the word s argest reinsurance companies, the most part, refect the harm their use is doing and wi continue to do as the impacts of increasing cimate change make themseves fet." In view of the human cost of cimate change we very much hope that many more universities wi decide to foow the ead set by their coeagues at Loughborough, Sussex, Bradford and esewhere, and make the switch to green eectricity. during the 1960s there were 16 cimate-reated Peope & Panet, October 2002 natura disasters, a figure which increased to 70 during the 1990s. Ninety six percent of deaths from such disasters occur in deveoping countries. These stark facts highight some of the many severe negative impacts of cimate change that need to be avoided. As we hope this report demonstrates, there are practica opportunities for universities, as major eectricity consumers, to drive the deveopment of the renewabe energy market in ways that wi reduce greenhouse gases and ead to rea environmenta benefits. What is needed is a commitment, both to invest time in seeking suitabe suppies and in some case money to pay the sma premiums that are necessary to produce eectricity that does not cause environmenta harm. Some universities may find it easy to switch. Some universities may find it more difficut. Others may be reuctant to pay any premium above the owest possibe market rate. However when considering how much time and money to invest in securing green eectricity suppies, and ensuring those suppies ead to environmenta benefits, it is important to

8 About this report This report has been produced for the institutiona stakehoders of UK universities, incuding Vice-Chanceors, Energy & Environmenta Managers and interested students. It was pubished by Peope & Panet, the nationa student network campaigning to end word poverty, defend human rights and protect the panet. Peope & Panet woud ike to thank Pau Whitehead, editor of Patts European Utiity Retai, the Nationa Energy Foundation and the many Energy Managers, university staff and student campaigners who provided assistance. Printed on 100% recyced paper by a printer operating to the EMAS environmenta standard. Designed using eectricity from 100% renewabe sources. FOR MORE INFORMATION ON ANY OF THE OPTIONS DISCUSSED IN THIS REPORT PLEASE CONTACT PEOPLE & PLANET. Write: 51 Union Street, Oxford OX4 1JP Phone: Emai: ucy@peopeandpanet.org Onine: