When we talk about flexibility in relation to energy, we often think about areas like demand-side response and flexible procurement. But as our energy system evolves, and new products and services emerge, many food manufacturers are finding flexibility in new areas of their energy strategies.
Here are just a few of the new opportunities for businesses to be flexible in the way that they…
When it comes to procurement, many savvy businesses have already realised the benefits of a flexible buying strategy. So for those that are striving to embrace flexibility in their energy procurement, a Corporate Power Purchase Agreement (CPPA) may not be their first consideration – but perhaps it should be.
With many businesses striving to improve their sustainability credentials as we move towards Net Zero, organisations with a CPPA in place can prove that they’re buying from a specific, low-carbon source. In the past, the fairly rigid nature of CPPAs may have deterred manufacturers from exploring them further, as they were typically entered into for a minimum of 10-15 years. But the good news is, CPPAs are changing, and it’s becoming easier for businesses that want greater flexibility to get involved.
Many CPPAs are portable so businesses don’t have to remain within the same supply contract – if they want to leave their supply contract when it ends, they can, and the CPPA remains intact. The previous supplier can simply sleeve the volume through to the new supplier. Many businesses are also now able to take a proportion of the offtake from the generator, whereas previously they would take the majority of the offtake. It is the increased flexibility from the generator/developer side that is driving this change. Developers are building larger installations, due to benefits of economies of scale and no access to subsidies. This means that CPPAs are becoming more accessible to a wider range of businesses that need flexibility.
Market volatility over recent years has made energy procurement a daunting task, but with a CPPA, the offtaker purchases energy at a pre-agreed price structure per MWh. This means you can obtain budget certainty for a proportion of your volume for an extended period, as well as reducing the impact of rising non-commodity costs.
By facilitating the development of new, long-term renewable energy projects, CPPAs provide much-needed additionality to the grid. Additionality is a huge indicator to customers, stakeholders and employees that your organisation is a sustainability leader.
As part of your purchasing agreement, you’ll receive certification in the form of REGOs (Renewable Energy Guarantees of Origin), which prove the origin of your supply, such as onshore wind or ground-mounted solar. So, a CPPA can help you avoid the risk of greenwashing, allowing you to state with confidence that your organisation is putting clean energy back into the system.
Fund on-site generation projects
For many businesses, the business case for generating energy on-site is clear-cut – on-site generation can help organisations to reduce their reliance on expensive grid energy, boost their resilience and reduce their carbon emissions. But many projects fall at one particular key requirement- funding.
That’s because the upfront cost of self-funding the installation of assets such as solar panels, biomass boilers and wind turbines can be very high, so many businesses are prevented from accessing the benefits of on-site generation simply because they do not have this capital available. But self-funding is just one of the funding options available for on-site generation projects.
With a range of funding options available and different levels of flexibility associated with each of them, businesses should no longer feel that they cannot access on-site generation because they cannot provide all of the funding for a project themselves.
The Business Case for Sustainability
There is a growing pressure for businesses to invest in cleaner energy, driven by the net zero and Environmental, Social & Governance (ESG) agenda, but aside from this pressure, there is also a solid business case for investing in renewables, with more organisations seeing the benefit that this can bring.
A 2018 report found that RE100 companies are more profitable than their peers, supporting the business case for sustainability and showing a clear link between being a clean energy leader and a company’s financial performance.
Embrace flexibility with Inspired Energy
At Inspired Energy, we’re here to guide businesses through our transition to a low-carbon energy system, and flexibility certainly has a big role to play in our energy future.
So whether you’re looking to explore whether a CPPA is right for your organisation, find funding for an on-site generation project or access new revenue streams for flexible assets, our experts can provide you with best-in-class advice. Call us on 01772 689 250 or email firstname.lastname@example.org.