UK universities ink landmark £50m clean power deal
In a national first, 20 leading UK universities have signed a £50 million agreement that will enable them to purchase clean power from a portfolio of windfarms across Scotland and Wales.
The 10-year purchase power agreement arranged by supply platform Squeaky Clean Energy in partnership with The Energy Consortium (TEC) allows the universities to purchase power from farms operated by Norwegian firm Statkraft, Europe’s largest producer of renewable energy.
The universities will lock in a proportion of their power at a fixed lower price across the next decade, with an estimated total value of £50 million. The fixed rate benefits the universities as it helps reduce their exposure to market volatility, at the same time meeting their clean energy needs.
It will also enable participating universities, which include the likes of Newcastle, Exeter, Anglia Ruskin and Aberystwyth among others, to achieve their carbon targets, in addition to slashing total energy costs.
The wider impact is that this furthers the country’s net-zero emissions agenda, which requires the collective effort of all stakeholders in the national economy, from private business sectors to those in the public service, such as universities.
The UK in June became the first global economy to set a target to hit net-zero emissions by 2050 and to pass laws to ensure its widespread implementation, an effort seen as a critical contribution towards reversing the threat of climate change.
As public service institutions, universities are seen as best placed to help the country in its mission.
When discussing the role of the country’s universities in the national climate plan, Universities Minister Chris Skidmore had articulated in June: “As truly civic institutions, our universities and colleges are already in a prime position to spearhead the green industrial revolution. And by striving to go carbon neutral as soon as possible, they could be the key to helping the UK achieve its net-zero goal sooner rather than later.”
Collaborative power purchase agreements like this landmark deal bring the institutions a step closer to achieving this.
According to TEC Managing Director Richard Murphy, the corporate purchase power agreement market has long been touted as a means for larger organisations to procure renewable power and enable subsidy-free development.
“But to date, it has largely been the preserve of very large companies, requiring substantial commitments from buyers,” he said.
“By acting together in a collaborative approach facilitated by the energy expertise here at TEC, these institutions, whether large or small, have been able to navigate a previously inaccessible market.”
He added that the method is also budget-friendly as institutions know what they will be paying for their power needs over the term. At the same time, it also provides flexibility as they would not be committing 100 percent of annual baseload to the agreement.
“For example, by committing to 20 percent of baseload via the purchase power agreement, if a university subsequently outsources part of its campus, such as student accommodation and volume falls, or they add self-generation energy assets they have sufficient headroom to allow for future developments.
“The combined challenge facing the higher education and wider public sector is to secure reduced carbon emissions whilst saving money and I am delighted that the TEC team has secured both through this groundbreaking deal,” he said.