RENEWABLE TECHNOLOGY
COULD ON-SITE
ENERGY GENERATION WORK FOR YOU?
Vish Sharma, head of Power Purchase Agreements at npower Business Solutions,
looks into why on-site energy generation will play a key role in meeting business demand for green energy
T
he wholesale energy market has seen significant volatility in the past two years, with
many businesses having to deal with increased costs. This is despite action by the UK government to support them with their energy invoices. At the same time, businesses are under pressure to reduce their impact on the environment, particularly when it comes to ‘greening’ their energy supply. To achieve these combined goals, many are
considering the economic and environmental advantages of on-site power generation. In fact, our 2023 Business Energy Tracker report showed that there has been a substantial increase in businesses investing in on-site generation to help them source flexible power, reduce carbon emissions and become more energy-resilient. Last year, just over one in four (27%) businesses
said this was in their plans. This year saw it rise to over a third (36%), with solar photovoltaic (PV) the most popular solution. An additional benefit of on-site generation is the
opportunity to sell your excess power to corporate buyers. We know from working with thousands of businesses that demand for renewables is high, but this demand is outstripping supply. So, what are the options available to businesses
who would like to install an on-site generation asset? And, how can you sell the power you generate to other businesses?
SOLAR PV, WIND, BIOGAS, CHP Which asset is right for your business? The most suitable option will depend on the size of your premises, its location and the feasibility of installation. For example, on-site
Vish Sharma 20
wind power generation is particularly suitable for businesses with
surplus land located in non-urban areas – those with exposed space, a high average wind speed and good site access are ideal. Alternatively, solar PV is a great option for businesses with a good amount of south-facing roof space or suitable adjacent land, such as a car park. For hard-to-decarbonise sectors, such as the
food industry, agriculture, water and waste management, there is an opportunity for biogas production from sources such as crop residues, animal manure from livestock, food, and other green waste and wastewater sludge. Industrial and commercial sites that use large
quantities of heat and power may be suitable for a combined heat and power (CHP) unit. This provides on-site electricity generation while the heat produced from the process is captured and used elsewhere in your building. It works by converting fuel into electricity through a generator to power on-site operations.
SELLING YOUR POWER As mentioned, one major benefit of investing in an on-site asset is that it could also generate additional revenue, through selling excess power to eager corporate buyers via a fixed or flexible Power Purchase Agreement (PPA). We are responding to an understandable
increase in customer demand for a renewable, sustainable, energy supply. As such, there is a natural fit between independent generators who want to sell their power via a PPA, and meeting the demand from corporate buyers. PPAs are contracts between renewable power
generators and commercial buyers, offering a valuable route to market for asset owners to sell their power. Not only do PPAs provide additional
revenue for businesses, but they can also help to reduce energy costs and carbon emissions. When it comes to selling your power, deciding
which PPA is best can be complex and is based on a range of factors, including: • Annual output: Fixed PPAs can be a good choice for generators with a limited annual output. However, if your annual output is 6 GWh or more, flexible PPAs could offer a better route to market.
• The nature of your generation: Some renewables, such as biomass power, offer a steadier output regardless of weather conditions. Others, like wind and solar PV, are more intermittent and weather-dependent.
• Your time constraints and risk appetite: The energy market is complex, and your familiarity with it can be a deciding factor when choosing the best PPA for your asset.
• Your organisation’s objectives: Whether you want a steady and risk-free revenue stream or wish to optimise profits with a flexible agreement, your goals will ultimately determine which PPA is best for you.
MOVING TOWARDS A RENEWABLE ENERGY FUTURE Business demand for renewable energy is only set to grow. As a result, independent energy generators, including those organisation with on-site assets, will undoubtedly play an important role in both supporting the growth of homegrown clean energy and in meeting the growing demand from businesses who want to procure their power from renewable sources.
npower
https://npowerbusinesssolutions.com
Download npower’s guide which provides information on the best route to market for your power here: https:/ /
npowerbusinesssolutions.com/how-to-sell-your-power-to-meet-business-demand-for-renewable-energy-1
ENERGY & SUSTAINABILITY SOLUTIONS - Winter 2023
www.essmag.co.uk
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