Many companies that are working to achieve net zero goals will already be purchasing renewable energy – the obvious way to go towards sustainable development. But, not all companies take the next step to buy renewable energy sources in a manner that will actually put new renewable energy into the grid.
If we are to meet net zero goals and make a real impact, we must improve the efficiency of our grid and dispense with fossil power generated by fossil fuels. One way to accomplish this is to provide more power.
In this article, we’ll examine the notion of additionality with respect to carbon offsets and renewable energy in addition to describing the many benefits for large companies. As a business you can choose how you can source renewable energy, and the chance to make a bigger difference while meeting your the sustainability targets.
What is an additionality?
Additionality is a notion within renewable energy. It is the term used to describe organizations that directly add additional capacity to renewable energy to the grid of the nation. Organizations can increase their capacity by committing to invest in renewable power generation in a manner which allows them to fund green power production. One option for companies to invest is through Corporate Power Purchase agreements.
As a company has the possibility to contribute genuine green power generated by sources like solar or wind on the grid instead of buying renewable energy sources that are already available. It’s as easy as signing up for the form of a PPA which means that the renewable energy capacity of the future is being added to grid.
It is difficult to pinpoint and define beyond this since there are no consensus metrics are in place. Your investment could mean that an initiative is launched which it otherwise would not have been able to happen sooner, as a result of your investment.
Potentially, additionality could be made by generating energy on-site, however, this is only feasible for certain companies.
Renewable energy and Additionality
When it comes to buying green energy sources, you can find methods to go about it in a way that helps to provide additionality. Additionality refers to an upgrade to REGO-certified green energy since you’re purchasing green energy in a manner which actually places green energy in the grid. Large corporations like Google or Apple are responsible for the construction of new renewable energy projects, however, PPAs allow additionality for smaller companies.
A lot of businesses realize that purchasing top-quality renewable energy is a crucial element for any successful net zero plan. But when it comes down to getting green energy sources, it is difficult to determine which option is most likely to have the biggest impact. The various options, and questions are often raised about possible greenwashing. As we’ve mentioned, one option to add additionality and decarbonisation of electricity involves power purchase agreements (PPAs).
These contracts are on the increase, with certain businesses making use of them as a method to reduce carbon emissions. However, more companies must participate, and in the right manner to reap the advantages that these contracts offer, particularly with regard to additionality and net zero targets.
For those who want to go back to the basics to the basics, a Corporate Power Purchase Agreement (CPPA) is an energy contract that can be used by businesses that wish to buy renewable energy directly from a specific supplier. They can determine the price you will pay for the energy over an agreed upon, usually longer (normally between 5 to 25 years) duration.
If you purchase your green energy direct through the producer, you and the generator get advantages. The producer is able to invest in renewable energy generation, which reduces the risk involved in the development of new generation facilities. As a company you are guaranteed a price and protection from the increasingly volatile retail energy market. This allows you to plan on other programs that are focused on energy efficiency and get closer to net zero.
There was a time that PPAs had higher costs and this meant it was a difficult choice to choose the program. Today, PPAs are on par with market prices, making them even more attractiveby providing both value and additional benefits. With PPAsyou might be able to establish an arrangement for private wires that permits you to move renewable power directly from your generator of the provider to your company. This reduces the cost for having an in-between utility provider, which makes the PPA more of an expense.
The benefits of additionality
The additionality option has many advantages. It’s a true badge of honor that demonstrates the commitment of your company to creating a sustainable future. It’s an active move to demonstrate the way to net zero for your company.
Additionally, you can make additionality the primary and the center of your sustainability plan. As a company you could be proud of your contribution in aiding renewable energy facilities to be constructed. It could be the case that without your contribution the plant would not be in existence. This is a compelling narrative and marketing tool, and also a significant advantage over your competition.
Green and Additional Green and additional
As we’ve seen, the existing renewable energy capacity is in short supply and high demand. Businesses that purchase this green energy aren’t having the positive impact they’d like to. There is a growing idea of a more sustainable green energy that involves actually making an impact through the creation of your own energy, or by adding power to the grid. This is a shift away from REGO-backed energy and towards onsite energy generation as well as the purchase of PPAs.
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