NET ZERO

Net Zero Energy

Whilst the UK Government has set a challenging target to achieve Net Zero carbon emissions by 2050, this is only possible if we address the sources of energy we use in our daily lives and wider business activities

SMARTER ENERGY CONSULTANCY

Making the right energy choice is key in delivering Net Zero

Customers are increasingly asking what businesses are doing to support the transition to a low carbon economy. Evidencing your sustainability credentials provides an opportunity to promote your environmental responsibilities whilst adding value to your company


If your business is ready to start its journey towards Net Zero, let our consultants support you in deciding the most appropriate mechanism to de-carbonise your energy usage. The main approaches in achieving a sustainable, Net Zero energy source are explored below and fall under four categories.

1. Renewable Guarantees of Origin

For each megawatt hour (MWh) of renewable energy generated, a corresponding certificate is issued by Ofgem to confirm the source of energy produced was from a renewable source.


When referring to electricity, these are more commonly known as a REGO (Renewable Electricity Guarantee of Origin). For gas, these are known as a RGGO (Renewable Gas Guarantee of Origin).


Suppliers typically procure these certificates to offer renewable energy to their customers. Costs vary across energy suppliers, but the range is typically £8 - £12/MWh for electricity and £35/MWh for gas.


Whilst the use of these certificates will enable you to report zero carbon energy, there is an ongoing debate around "green washing" in the industry given suppliers can still procure non-renewable (brown) energy and "wash" their green credentials through buying these certificates from renewable generators/gas producers.

2. Fuel Mix Disclosure

All electricity suppliers are obliged to publish details of the mix of fuels used to generate the electricity supplied under their Supply Licence, including its impact on the environment.


As the overall UK fuel mix moves towards renewable energy, suppliers are purchasing less from non-renewable sources. However, for some suppliers, the majority of the energy they procure is from the burning of fossil fuels.  You will find your suppliers FMD published on their website.


Fortunately, there now exists several suppliers that only offer zero carbon energy. These suppliers will only purchase their energy from renewable generators, or generate all of the electricity they sell from their own renewable sources.


Placing your energy supply with one of these sustainable companies ensures your energy consumption is net zero without the need for any further action.

3. Corporate PPA

Play a leading role in the Net Zero transition by partnering with a new or existing renewable project through a Corporate PPA and directly support renewable generation.


A Corporate PPA enables you to source sustainable electricity directly from a renewable generator at an agreed price, while giving generators a reliable, guaranteed buyer for their electricity at a stable price.


In addition to sourcing your energy directly from a chosen generator, both parties can benefit from agreeing long-term commodity price commitments that protect them from market price volatility. It therefore allows you to agree commodity prices far beyond wholesale market liquidity.


These are often referred to as tri-party agreements given they need the renewable generator, chosen energy supplier and the final consumer of energy to work together. Energy is sold from the generator to the energy supplier at an agreed price (often known as sleeving), who then sell the energy onto the final consumer at the agreed price. Guarantees of Origin are then redeemed on the consumers behalf to evidence their supply is backed by a traceable renewable source.

4. Carbon Offsetting

Carbon offsetting is a mechanism used to compensate for your carbon impact through the purchase of carbon credits that are equivalent to your carbon emissions in tonnes.


One carbon credit equates to one tonne of CO2 that has not been emitted. Once purchased, the credit is then retired through registries held by the international standards and global exchanges.


The money paid for carbon credits fund vital social impact projects which help to support sustainable development and improve the lives of communities in some of the poorest countries in the world.


It isn't possible to support UK based projects due to the Kyoto protocol and the understanding that countries such as the UK have Nationally Determined Contributions (NDC) i.e. carbon reduction targets, that mean certified emission reduction projects within the UK are claimed under the UK’s NDC. 


There are two types of carbon credits available and the procurement of either will allow you to report Net Zero energy. Certified Emission Reductions (CERs) or Voluntary Emission Reductions (VERs).


CERs are typically cheaper to procure as they relate to mandated carbon reduction initiatives on heavy emitters e.g. cement manufacturing and coal fired power stations.  VERs are more expensive as they help to serve micro projects across the developing world that are too small to warrant the administrative and financial burden, or not covered, under wider compliance schemes.

Net Zero FAQs

  • What is Net Zero?

    Net Zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere (sometimes also referred to as ‘Carbon Neutral’). 


    To reach Net Zero, the amount added to the atmosphere is no more than the amount taken away.  The UK became the world’s first major economy to set a target of being Net Zero by 2050.

  • What is Net Zero energy?

    Net Zero energy is achieved by ensuring the energy you consume is carbon neutral and is governed more widely by "Scope 2" guidelines as part of the Greenhouse Gas Protocol.


    Net Zero energy can be achieved through purchasing Guarantees of Origin certificates, ensuring your supply is only from renewable sources or buying carbon credits (commonly known as Carbon Offsetting).

  • What is Gross Zero energy?

    Whilst it’s important that we try to balance the amount of greenhouse gas emissions with that removed, some forms of energy production do not add any emissions; known as Gross Zero energy e.g. Solar, Wind, Hydro etc.


    Gross Zero energy is the purist form of renewable energy and can be achieved by ensuring your supply is solely procured from renewable generators in the first instance.


    Whilst under Scope 2 guidance of the Greenhouse Gas protocol you can report gross zero emissions through the purchase of Guarantees of Origin, suppliers often buy these to "green wash" a mix of renewable and fossil derived energy. Hence the debate whether this is actually Gross Zero energy.

  • What is Carbon Offsetting?

    Carbon offsetting is a mechanism used to compensate for your carbon impact through the purchase of carbon credits that are equivalent to your carbon emissions in tonnes.


    One carbon credit equates to one tonne of CO2 that has not been emitted. Once purchased the credit is then retired through registries held by the international standards and global exchanges

  • What is a Carbon Offsetting project?

    There are many types of carbon offsetting projects. Some examples includes:


    1. A project distributing cleaner cookstoves to thousands of poor families who risk fatal diseases daily by cooking on open fires in their homes.
    2. A forest conservation project in the Amazon rainforest which reduces deforestation and preserves precious bio-diversity and protects endangered species.
    3. A tree planting project that sequesters carbon and provides an income to families.
    4. A renewable energy project helping to build the renewable infrastructure needed in a fast-growing developing country.

    It must ultimately result in a measured reduction in carbon emissions and must meet international standards that are independently verified. It should also result in a measured positive social, economic and/or ecological impact, helping to stimulate sustainable development.

  • What happens to the money paid for Carbon Credits?

    The money paid for carbon credits is funding vital social impact projects which help to support sustainable development and improve the lives of communities in some of the poorest countries in the world.

  • What is a REGO?

    For each unit of electricity produced (measured in megawatt hours), a corresponding Guarantee of Origin certificate is issued by OFGEM to confirm the source of energy was derived from a renewable generator.


    These certificates are called Renewable Electricity Guarantees of Origin (REGO) and can be used by energy suppliers to evidence your supply is from a renewable (green) source e.g. Solar, Wind, Hydro etc.

  • What is a RGGO?

    For each unit of green gas produced (measured in megawatt hours or therms), a corresponding Guarantee of Origin certificate is issued by OFGEM to confirm the source of energy was derived on a sustainable basis.


    These certificates are called Renewable Gas Guarantees of Origin (REGO) and can be used by energy suppliers to evidence your supply is from a green gas source.


    Biomethane (also known as ‘green gas’) can be produced from several sources including biogas from anaerobic digestion, landfill gas and synthetic gas (‘syngas’) from the gasification of biomass. All these gases can be converted to biomethane by removing the CO2.


    In the past, landfill gas and biogas have been used to generate electricity. Instead, UK producers are now starting to convert the gas into biomethane and inject it directly into the gas distribution network. Gas injected in this way displaces fossil derived natural gas, which reduces greenhouse gas emissions.

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