Insight 4 November 2021

Alex Payne on how businesses can accelerate their transition to clean energy

What’s your name and role at Mitie? 

Alex Payne, Head of Energy Markets. My role is to provide customers with insight and advice around purchasing renewable energy and managing price risk. 

What are the biggest challenges ahead of organisations regarding sustainability, and how can they overcome them?

Energy prices are increasingly volatile with many factors impacting the price that consumers pay, including the necessary move away from conventional generation fuels such as coal and gas. In light of rising prices, consumers may find they have difficult decisions to make around how best to source their energy. There may be a temptation to forgo the greener options in favour of short-term price benefits. However, we have seen that looking at longer term power purchase agreements, where a customer contracts to buy power from a renewable generator directly, can provide price stability and savings, whilst also demonstrating a commitment to investing in zero carbon power. To make the biggest difference, corporates need to be thinking bigger and longer term, 10-15 years – this is often a mind-set change for many organisations. 

What is Mitie doing to support its customers? 

We enable our customers to buy energy from renewable sources, whether this be through auditable certificates, contracts directly with renewable generators or even on-site, self-generation projects. The energy markets are complex and can be volatile, our aim is to understand a customer’s goals and risk appetite with a view to providing cost effective solutions.

Looking at your crystal ball, what’s the future of sustainability, reaching net zero and why?

The future of sustainable energy will be a constant run for technological advances, renewable and biodiverse resources and re-education of “bad habits”. There will undoubtedly need to be more renewable generation but also more predictable sources of zero carbon power (like utilising grid scale storage or nuclear generation) to cover intermittencies. This is likely to require more governmental subsidies which could equate to higher energy prices. This means that businesses will need to be smarter with what they use and how they use it. 

How can they reach targets and address the issues they will face?

As a starting point, businesses should look at their overall operations to understand where they can reduce their carbon output and for this accurate data and measurement is key. Once consumption is understood measures can be put in place to reduce their carbon, for example using less energy in the first place, moving away from gas and oil based fuels (through electrification, heat pumps and electric vehicles), and generating their own electricity from renewable sources will form part of their strategy.  For the remaining requirements, purchasing renewable electricity and biogas from generators/producers directly will also help to meet their net zero targets. 

How can they manage accountability?

Energy cuts across multiple disciplines within an organisation so it is key that all stakeholders are ‘bought in’ to what you are trying to achieve. For example there should be a preference for sourcing and encouraging new renewable energy when tendering for supply contracts, or organisations could set an internal cost of Carbon. We work with our customers to understand their objectives and risk appetites related to energy purchasing and sustainability. We marry these requirements up to renewable energy solutions and provide advice on the options, and will deliver the solutions too. 

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