Smartest Energy has launched a new report urging large firms to switch to renewable power – which it supplies. The firm claims it costs companies less than 1% of their total energy bill to buy 100% renewable power, yet many FTSE 100 firms and large industrial and commercial (I&C) outfits remain disinterested, despite what it argues are strong corporate responsibility benefits.
The report, Business and the Renewables Revolution, claims that switching to renewable power is the most cost-effective way for most organisations to cut their carbon footprint.
However, while 74% of the UK’s 100 biggest companies have set carbon-cutting targets, only 38% of the FTSE 100 purchased renewable electricity in 2015, according to the report. Meanwhile, only around 15% of I&C demand is powered by low carbon electricity. The report suggests energy labelling could increase that percentage threefold over the next four years.
But if it makes such good business sense why the apathy?
“It is the reason why written the paper,” SmartestEnergy’s ceo Robert Groves told The Energyst. “It shows there are very good reasons to do it; primarily CSR and reducing your carbon footprint but for many it is not high enough on the agenda.”
Groves said an ancillary benefit was that companies that buy renewable power often end-up more energy efficient, because “it helps build interest among staff in energy”.
The University of London is one customer that agrees. “The cost of paying the extra for renewables was so small in comparison to our annual bill it was pretty much insignificant – it was cheap,” said sustainability manager John Bailey. “When we produce our carbon figures, we are now talking about the fact that we’re only buying renewable energy. It’s such an easy thing for people to understand.”
Price is right?
Groves believes that while the price premium for 100% renewable power is currently small, it will reach parity in the not too distant future – and reducing the hassle factor for businesses virtually negates the cost anyway.
“Ideally the plethora of reporting requirements will gradually force companies to move towards 100% renewable energy,” he says. “Global corporates may be the first movers now but this will filter down the supply chain. If it is purely a price based decision then companies may choose brown electricity but the difference is marginal.”