Agenda item

Purchasing Electricity from Renewable Sources

Report of the Executive Director, Operational Services

Decision:

12.1

The report details the energy tariff options available to the Council from its new electricity supplier (EDF).

 

The report sets out the Renewable Energy Guarantee of Origin (REGO) arrangement the Council has under the contract with its current supplier (which will expire in March 2023) and recommends that the Council purchases the standard product under the contract with its new supplier (which commences in April 2023).

 

The standard product does not involve the purchase of REGOs. The report sets out the Council’s intention that monies previously allocated for the purchase of REGOs is deployed on building a comprehensive communications and engagement package that will allow communities and organisations to learn about and access specific renewable energy funding and investment opportunities, subject to separate Council approval.

 

This decision will allow the Council to realise a significant cost avoidance for the financial year 2023/24 and years moving forward and by allocating the monies to local renewable energy projects it will have a positive effect on the Council’s route to net zero by 2030.

 

 

12.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

 

 

(a) approves the Council purchasing the standard option for electricity generation with EDF, as set out in this report; and

 

(b) notes that the Transport, Regeneration and Climate Policy Committee will consider the internal reallocation of monies previously allocated for the purchase of REGOs to support the Council’s local renewable energy and climate change projects.

 

 

12.3

Reasons for Decision

 

 

12.3.1

There will be a cost avoidance for the year 2023/24 of £287,091 against the Clean Renewable option, £198,354 cost avoidance against the Renewable for Business option or £417,587 against the Select Renewable option.

 

 

12.3.2

The purchasing of REGOs has no effect on the Council’s route to net zero.

 

 

12.3.3

The Council intend on allocating the £40k a year previously spent on REGOs internally to support the Council’s local renewable energy and climate change projects. The £40k will be deployed on building a comprehensive communications and engagement package that will allow communities and organisations to learn about and access specific renewable energy funding and investment opportunities. Officers will work with Local Area Committees, businesses and community organisations to allocate SCC climate resources.

 

 

12.4

Alternatives Considered and Rejected

 

 

12.4.1

Option 1 – Purchase Renewable for Business option from EDF

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from renewable sources for its market-based emissions.

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- The purchasing of REGOs does nothing to reduce demand for electricity.

- This option does not contribute to the Council’s journey to net zero.

- This option includes electricity from biomass generation

 

 

12.4.2

Option 2 – Purchase Clean Renewable for Business option from EDF

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from renewable sources for its market-based emissions.

- This option does not include biomass generation

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- The purchasing of REGOs does nothing to reduce demand for electricity.

- This option does not contribute to the Council’s journey to net zero.

 

 

12.4.3

Option 3 – Purchase the Zero Carbon for Business option from EDF.

 

Advantages:

- The cost of this option is lower than that for renewable energy - £52,198.43

- The Council will be able to declare that its electricity is generated by zero carbon generation for its market-based emissions.

 

Disadvantages:

- The Council will be unable to declare that its electricity is generated by renewable technologies for its market-based emissions.

- This option is based on nuclear energy generation which is subject to some controversy regarding the storage of nuclear waste produced by this method of electricity generation.

- This option has no local impact on the route to net zero.

- This option does not contribute to the Council’s journey to net zero.

 

 

12.4.4

Option 4 – Purchase the Blended Zero Carbon for Business option from EDF.

Advantages:

- This would enable the Council to declare that its 50% of its electricity is generated from renewable sources for its market-based emissions and that the remaining 50% was from zero carbon generation.

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- This would involve the purchasing of REGOs which does nothing to reduce demand for electricity.

 

12.4.5

Option 5 – Purchase of Select Renewables option from EDF.

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from specified renewable sources for its market-based emissions.

 

Disadvantages:

- The cost to the Council would increase, this is the most expensive option available.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- This would involve the purchasing of REGOs which does nothing to reduce demand for electricity.

 

 

Minutes:

13.1

The Director of Direct Services presented a report detailing the energy tariff options available to the Council from its new electricity supplier (EDF).

 

The report sets out the Renewable Energy Guarantee of Origin (REGO) arrangement the Council has under the contract with its current supplier (which will expire in March 2023) and recommends that the Council purchases the standard product under the contract with its new supplier (which commences in April 2023).

 

The standard product does not involve the purchase of REGOs. The report sets out the Council’s intention that monies previously allocated for the purchase of REGOs is deployed on building a comprehensive communications and engagement package that will allow communities and organisations to learn about and access specific renewable energy funding and investment opportunities, subject to separate Council approval.

 

This decision will allow the Council to realise a significant cost avoidance for the financial year 2023/24 and years moving forward and by allocating the monies to local renewable energy projects it will have a positive effect on the Council’s route to net zero by 2030.

 

 

13.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

 

 

(a) approves the Council purchasing the standard option for electricity generation with EDF, as set out in this report; and

 

(b) notes that the Transport, Regeneration and Climate Policy Committee will consider the internal reallocation of monies previously allocated for the purchase of REGOs to support the Council’s local renewable energy and climate change projects.

 

 

13.3

Reasons for Decision

 

 

13.3.1

There will be a cost avoidance for the year 2023/24 of £287,091 against the Clean Renewable option, £198,354 cost avoidance against the Renewable for Business option or £417,587 against the Select Renewable option.

 

 

13.3.2

The purchasing of REGOs has no effect on the Council’s route to net zero.

 

 

13.3.3

The Council intend on allocating the £40k a year previously spent on REGOs internally to support the Council’s local renewable energy and climate change projects. The £40k will be deployed on building a comprehensive communications and engagement package that will allow communities and organisations to learn about and access specific renewable energy funding and investment opportunities. Officers will work with Local Area Committees, businesses and community organisations to allocate SCC climate resources.

 

 

13.4

Alternatives Considered and Rejected

 

 

13.4.1

Option 1 – Purchase Renewable for Business option from EDF

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from renewable sources for its market-based emissions.

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- The purchasing of REGOs does nothing to reduce demand for electricity.

- This option does not contribute to the Council’s journey to net zero.

- This option includes electricity from biomass generation

 

 

13.4.2

Option 2 – Purchase Clean Renewable for Business option from EDF

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from renewable sources for its market-based emissions.

- This option does not include biomass generation

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- The purchasing of REGOs does nothing to reduce demand for electricity.

- This option does not contribute to the Council’s journey to net zero.

 

 

13.4.3

Option 3 – Purchase the Zero Carbon for Business option from EDF.

 

Advantages:

- The cost of this option is lower than that for renewable energy - £52,198.43

- The Council will be able to declare that its electricity is generated by zero carbon generation for its market-based emissions.

 

Disadvantages:

- The Council will be unable to declare that its electricity is generated by renewable technologies for its market-based emissions.

- This option is based on nuclear energy generation which is subject to some controversy regarding the storage of nuclear waste produced by this method of electricity generation.

- This option has no local impact on the route to net zero.

- This option does not contribute to the Council’s journey to net zero.

 

 

13.4.4

Option 4 – Purchase the Blended Zero Carbon for Business option from EDF.

Advantages:

- This would enable the Council to declare that its 50% of its electricity is generated from renewable sources for its market-based emissions and that the remaining 50% was from zero carbon generation.

 

Disadvantages:

- The cost to the Council would increase.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- This would involve the purchasing of REGOs which does nothing to reduce demand for electricity.

 

13.4.5

Option 5 – Purchase of Select Renewables option from EDF.

 

Advantages:

- This would be a continuation of the Council procuring REGO’s for its electricity supply.

- This would enable the Council to declare that its electricity is generated from specified renewable sources for its market-based emissions.

 

Disadvantages:

- The cost to the Council would increase, this is the most expensive option available.

- This option would be a further draw on the Council’s budget alongside already known increasing energy costs.

- This option has no impact on the route to net zero.

- This would involve the purchasing of REGOs which does nothing to reduce demand for electricity.

 

Supporting documents: