12th May 2021
Chris Bowden, Managing Director, Squeaky
7 minute read
5 renewable energy myths busted
Taking responsibility for environmental impact is now more important than ever for businesses. From engaging purpose-led employees and customers, to satisfying activist investors, to mitigating future reputational risks, companies have a wealth of good reasons to have a climate strategy. And sourcing renewable energy has become a logical first step towards making a difference.
However, when it comes to making the decision of which renewable energy provider to choose, the answer isn’t so obvious. What might seem green on the surface can turn out to be dirty brown underneath. Suddenly your well-meaning intent is lost in a sea of recriminations.
To help businesses understand the truth about renewable energy, we’ve compiled a list of five renewable energy myths. Read on to find out the real truth behind these misconceptions and falsehoods.
1. Myth: Renewable always mean clean
Businesses are often surprised to discover that the renewable energy contract they agreed isn’t delivering them clean energy. Contrary to popular belief, renewable doesn’t necessarily mean non-polluting, sustainable or carbon neutral. Clean energy is renewable energy which comes from zero emission sources and which don’t damage the atmosphere or the planet when used or when disposed of. Clean energy sources include harnessing energy from natural resources such as the wind blowing, the sun shining, or water running. Here at Squeaky, these are the only types of generation we include in our portfolio of contracts. This means that when you choose us as your provider, you can rest assured that 100% clean energy is powering your offices, warehouses and factories.
Other suppliers use the word “renewable” to disguise the fact that their energy source isn’t in fact, clean. One good example is imported biomass. The UK government considers biomass to be a renewable energy since the biomass pellets are made from trees. But when you consider that burning biomass creates just as much CO2 as burning coal and the fact that all of those pellets are manufactured outside of the UK, often in places as far away as in North and South America, and given they are then shipped to the UK by fuel-powered boats, that so called green energy starts to look an awful lot browner.
Another popular solution is to “green-up” standard, fossil-fuel energy with renewable energy credits. In this case, suppliers continue to buy fossil fuel energy from traditional generators, and then cover up this action by buying renewable energy certificates on the open market which they package with dirty energy to create green energy!
2. Myth: It’s up to my supplier where my power comes from
It is possible to stipulate the source of your power in your supply agreement or have an independent auditor check the claims of your supplier and this can be a very good way to ensure your supplier is buying clean energy directly from only clean energy generators. You can also go one step further and enter into a Corporate Power Purchase Agreement, also known as a CPPA or PPA, which creates a contractual commitment to buy a certain amount of energy at an agreed price for an agreed term. More and more companies are now looking to buy power directly from generators, going straight to the source and encouraging the development of more clean power, and enabling them to hedge against price volatility by locking-in the power prices they pay. That provides both visibility of future electricity costs for forecasting, and ensures ESG and clean energy targets can be met.
3. Myth: Clean energy costs more than dirty energy
Clean energy generation from solar, and wind certainly used to be more expensive, but this is no longer the case. Thanks to a combination of government subsidies, massive investment, and rapidly falling technology costs, the levelized cost of green energy has been falling consistently for years. That said, many suppliers continue to charge a large premium for clean energy. From our point of view, there is limited justification for doing so as market premiums for clean energy are typically less than one percent and when buyers do a pay a premium this should really be passed on to the generator to stimulate further investment in clean energy. Whilst we can’t say so with certainty, it isn’t impossible to imagine that some suppliers do this to make a profit out of customers’ desires to be environmentally responsible businesses rather than pass on any premium to the generator as we do.
4. Myth: My renewable energy supply comes from the UK
When you think about clean energy, you imagine the clear skies and clean air that go with them. But what if that clean energy is coming from another country? Who benefits then?
We mentioned above that some UK energy suppliers choose to green up their offering by purchasing renewable energy certificates, in turn, saving themselves from paying additional fees levied by the UK government. Getting to the bottom of these types of offers can be challenging. For example, suppliers oftentimes combine a small number of certificates from UK-based renewable generators with a larger amount of less expensive European credits. Their marketing materials show pictures of wind turbines in Cornwall, but fail to mention the biomass plants they are supporting in Europe. Worse still when you buy EU green certificates you reduce the amount of money that you as a supplier have to pay into the Feed in Tariff scheme, thereby not only reducing your costs of supply, but also undermining one of the critical schemes supporting the deployment of clean energy in the UK.
5. Myth: Climate change is something to worry about in the future, not now
It is hard to believe that this myth is still floating around given the science and more importantly the evidence is clear. We need to act now to avoid climate breakdown. We’re already seeing the devastating effects of climate change on our wildlife, global food supplies, conflict, disease and global instability, and this will only get worse if we don’t take meaningful action. As Mark Carney summed up recently, the world is heading for mortality rates equivalent to the Covid crisis every year by mid-century unless action is taken immediately. "One of the biggest issues is you cannot self-isolate from climate,” he said. “That is not an option. We cannot retreat in and wait out climate change, it will just get worse." In short, climate change threatens the future of the planet that we depend on for our survival and we are the last generation that can do anything about it.
Truth: Our energy is always 100% renewable and clean
Doing the right thing for the planet shouldn’t require guesswork. All the energy we supply to our customers is 100% clean, traceable energy generated from wind, solar, and hydro sources here in the UK. Our commitment to transparency and driving change is why we are the only B-Corp certified I&C supplier in the UK.