This month, for the first time ever, a new record was set where more than 50 per cent of the UK’s electricity demand was met from renewable sources. The power industry has come a long way in reducing its carbon footprint in recent years, with other traditional sources still contributing largely to Britain’s power demand.
It may not be surprising that coal still produces nine per cent of Britain’s electricity, but due to the amounts of carbon dioxide released during its combustion, other types of renewable sources are being invested and are starting to dominate fossil fuels and nuclear power.
This record has been a result of the industry’s investment in renewable sources, government regulations (such as the carbon tax) and in a small, but increasingly important way, a demand from SMEs for renewable power. But how can small businesses that lack procurement and sustainability departments understand the different forms of renewable electricity available and how can they make the right choice that will best suit their business?
What is renewable electricity?
Let’s talk first about what renewables actually are. Renewable electricity is sourced from naturally occurring sustainable resources that will be replenished over time. There are many different sources of renewable electricity and some are weather dependent and require another source to ensure a consistent supply. The sources that are more likely to be offered by your energy provider are; solar, biomass, wind or hydropower.
For many SMEs, the terms used when discussing renewable electricity can be confusing. For example, when looking into switching to renewables, the issue of intermittency is often raised. Intermittent sources of power, such as the wind and the sun, are becoming increasingly predictable as weather forecasting improves. But due to wind and solar farms’ reliance on favourable weather conditions, their power needs to be supplemented by other sources to ensure a continuous supply.
This could be flexible fossil fuels such as coal or gas, or responsive renewables such as biomass. ‘Grid parity’ is also likely to come up to describe when a new technology can produce energy for the same cost as existing, traditional power sources rather than requiring government support to make them viable. Ultimately reaching grid parity is important for renewables, as this is when they will be able to truly compete with other more established forms of power generation.
Why renewable?
According to our research more than 72 per cent of SMEs want their energy providers to be more committed to renewable energy. With increased awareness of renewables and discussions becoming more focused on climate change, it is no surprise that more businesses are considering energy as a strategic focus – with more than 80 per cent are placing an increasing value on where their energy comes from.
Certainly switching to renewable electricity can be good for SMEs in terms of their Corporate Social Responsibility (CSR) but, they should also be interested because of how quick and easy it is to switch. There are also the financial benefits attained through energy-efficiency programmes, such as smart meters which allow businesses to see what they’re using and when, and how much it’s costing them. They can use this information to adjust their usage accordingly and help them save money.
Responsible business
SMEs who are taking an active role in reducing their energy consumption and switching to a more renewable source are demonstrating a high level of corporate citizenship according to a report published by Bain & Company. With an increase in their overall corporate responsibility, business can reap the benefits of a stronger corporate image, improved public perception and even make the business more attractive to investors and of course new employees.
Small businesses, however, are unlikely to have a full time resource to look after their corporate social responsibility programme (and let’s be honest this won’t always be front of mind), but by using renewable electricity they can boost their sustainability credentials, and contribute to a CSR programme without having to spend a lot of their valuable time on the process. Given we know time is of the essence for SMEs, this can be no bad thing.
Saving time
And talking of saving time…we know that most SME owners are often very keen for more time as they have a very broad spread of responsibilities to take care of. By making the switching process simpler and quicker this not only helps Haven Power’s journey towards a lower carbon Britain but can give SMEs valuable time back!
From our own research we can see SMEs are now only spending six minutes a year engaging with their energy providers, less than lining up for your daily coffee. This means they can spend time on what they really need to be doing – running a business.
Saving money
We know that SMEs want to be responsible – rather than only making money. The first step towards being a responsible business and reducing carbon emissions, starts with us supporting businesses in helping them to use less energy and as a result, spend less. The Bain report says that by adopting an energy efficiency programme, businesses can save up to 30 per cent on energy costs within three years.
We are experiencing a moment of unprecedented change for the energy market, with more providers, businesses and the government pledging to be more environmentally responsible, renewable electricity needs to become a crucial consideration for all SMEs. With all the innovations in renewable electricity, it is now the time SMEs can afford to look at switching to a renewable package.
The end goal of becoming a lower carbon Britain with a growing, dynamic economy is not the only journey we are on at Haven Power. We also want to help businesses to understand how they can be more energy efficient, help them regain control and spend less on their electricity.
By Paul Sheffield is chief operating officer at Haven Power
Further reading on renewable electricity
