Twenty of the UK's leading universities will buy renewable energy directly from British wind farms for the first time. The ground-breaking aggregated power purchase agreements (PPA) will see the pioneering universities buy £50m of renewable energy from a portfolio of wind farms. The deal fixes power prices at a competitive rate for the next ten years - and in doing so, minimises their exposure to market volatility. For more information see the IDTechEx report on Energy Harvesting Microwatt to Megawatt 2019-2029.
The PPA was arranged by Squeaky Clean Energy in partnership with The Energy Consortium (TEC). For a period of 10 years, Statkraft, Europe's largest producer of renewable energy, will annually deliver the wind power from their British portfolio.
Matt Dunlop, Head of Sustainability, Newcastle University, said: "It's fantastic that the University has been able to enter into this long term contract for onshore wind power, under the PPA established by TEC. Under TEC's frameworks we have purchased 100% renewable electricity since 2017, and the PPA is part of our strategy to diversify and increase our investment in both on and off-site renewables as part of our climate action plan to achieve net-zero CO2 emissions by 2040."
Reducing carbon emissions while saving money
To meet the highest standards demanded by the Universities in buying renewable energy the deal was structured so the power from the wind farms contractually flows with the Renewable Energy Guarantees of Origin (REGOs). The PPA will also help the participants meet the UK Government's goal to build a net-zero carbon economy by 2050. Under the plan, emissions from estates will have to be completely eliminated or offset by schemes with clear, robust auditing of activity proving removal of CO2 from the atmosphere.
Once the exclusive domain of large corporates, this first of a kind transaction provides a platform to open up the market to much smaller companies and public sector bodies.
Until now, the cost and complexity of arranging PPAs meant their advantages could only be enjoyed by large corporations that had the in-house capability and resources needed to negotiate these agreements that typically ran to 120 pages. Additionally, there was little appeal from the other side of the equation - generators - to strike a PPA with smaller organisations as the scale of any deal was always too small.
But the breakthrough came via the establishment of standardised and simplified documentation that cut the size of the contract down to a previously unimaginable 15 pages, lowering transaction costs to an affordable level.
"The PPA market has long been touted as a means for larger organisations to procure renewable power and enable subsidy-free development," said Richard Murphy, Managing Director, TEC. "But to date, it has largely been the preserve of very large companies, requiring substantial commitments from buyers. By acting together in a collaborative approach facilitated by the energy expertise here at TEC, these institutions, whether large or small, have been able to navigate a previously inaccessible market. The combined challenge facing the Higher Education and wider public sector is to secure reduced carbon emissions whilst saving money and I am delighted that these universities have secured both through this ground breaking deal."
"Having pioneered the first Corporate PPA (CPPA) in Europe back in 2008 for Sainsbury it's been an ambition of myself and team at Squeaky to democratize the CPPA market. After several years of development we've achieved another first by simplifying, standardizing and shrinking the CPPA enabling smaller organisations to access the market for the first time," said Chris Bowden, MD of Squeaky.
Source: Newcastle University, The Energy Consortium
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