In a world where precious fossil fuels are extracted, including shale gas in North Dakota, crude oil in the Upper Niger Delta and coal from open-cast mines in China so large that they are visible from space, no energy business can do this without damage to the environment. So in considering the challenge of procuring energy sustainably in the UK, is it a case of “Let he who is without sin cast the first stone…..”?
CIPS defines sustainable procurement as “… a process whereby organisations meet the needs for utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to organisation but also to society and economy whilst minimising damage to the environment.”
When considering sustainable procurement within the Higher Education Sector it becomes a topic discussed widely, particularly in recent years, within the student body. One particular area of focus is fossil fuel divestment. As part of their overall sustainability strategy Institutions have been making significant strides in moving away from funding of research activity by companies involved in extracting fossil fuels to the detriment of the environment. As a result, the number of British Universities divesting from fossil fuels has grown substantially. Indeed the National Student Survey reports that a third of UK universities have made a divestment pledge, while more than half of the Russell Group, which are typical for having significant research and external funding, have made divestment commitments.
Another challenge to the success of sustainable procurement is the UK Government’s 2050 target to reduce CO2 emissions by 80% against a 1998 baseline. The planned closure of all coal fired power stations by 2025 is just one step towards a transition to clean renewable technologies.
However fossil fuels will continue to represent a significant component of the energy mix, especially when considering the growing use of gas-fired power stations for base-load generation, let alone at time of peak demand.
Levy mechanisms introduced in 2014 to encourage investment in renewable generation which now see additional charges appearing, on electricity bills, are clearly not working. Not enough new sources of wind, solar and wave power are being built to replace the disappearing coal stations and threatened nuclear power plants.
Meanwhile, wind farms built in the early stages of the UK dash for renewables have now repaid their initial investment and could see power sold into market at more attractive rates, in some cases directly to significant end-users.
Sustainable procurement can thus be argued as a worthy prize that is difficult to achieve.
How and where can TEC help?
TEC are very conscious of the Higher Education sector’s carbon management plans as they support the UK’s efforts to meet 2050 targets. There should also be a recognition that fossil fuels will continue to play an important part of the energy mix. With this in mind we have secured, through our frameworks, the commitment from our suppliers that they must obtain enough electricity generation and green gas from renewable sources to cover our member portfolio. This can only support the building of more renewable generation facilities.
For electricity these sources must be backed by Renewable Energy Guarantees of Origin (REGOs) and evidenced by clear, audited, reports. Under greenhouse gas reporting standards, this allows our members to report they receive a zero carbon electricity supply.
The Greenhouse Gas Protocol (GHG Protocol) is the most widely used international accounting tool for organisations to understand, quantify, and manage greenhouse gas emissions. Companies are advised to report GHG emissions from purchased energy using “Market-based” emissions factored alongside the local Grid average. TEC’s frameworks satisfy both requirements. The ability to implement these processes is a step further to cleaner technologies and sources giving our members more choice.
It is now more possible than ever to secure long-term agreements with existing renewable generators at prices which are more reflective of the present wholesale market. By matching stable long term demand from organisations with strong credit ratings, long term deals can be struck to extend the life of the wind farms which have recovered their initial funding.
Finally there are opportunities to generate electricity locally using wind and solar technologies. The contribution this can make to reduce offtake from the electricity grid can only help the UK in efforts to de-carbonise and improve the sustainability. This is surely as good an example of sustainable procurement in a world of “sin” as there could be.
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