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Environment and Energy

The University of Cambridge joins 19 other UK universities in a ground-breaking renewable energy deal to buy energy directly from British windfarms. The deal, known as a ‘Power Purchase Agreement’ or PPA, involves purchasing a proportion of power at a fixed price over a 10-year period. It is the first time in UK history that a PPA has been established by collaboration between public sector energy users.

The Energy Consortium (TEC), a not for profit higher education purchaser consortium of which Cambridge is a member, arranged the PPA in partnership with Squeaky Clean Energy ltd.

Until now, the cost and complexity of arranging PPAs meant that their advantages, such as minimising exposure of power prices to market volatility, could only be enjoyed by large corporations with the in-house capacity to negotiate lengthy agreements. Under the new agreement, universities including Newcastle, Exeter, Aberystwyth and Cambridge, will collectively purchase £50m of clean, renewable energy from specific windfarms located in Scotland operated by Statkraft, Europe’s largest producer of renewable energy.

The PPA not only guarantees a supply from specific windfarms, but ensures their continued operation for at least the 10-year period. The supply is also backed by Renewable Energy Guarantees of Origin (REGOs), which enables the participants to report the energy provided as ‘zero carbon’ under the GHG protocol.

The University has committed to purchasing 24,400 MWh of electricity per year through the PPA. This equates to just under 20% of the electricity directly purchased by the University and will deliver carbon savings of approximately 6,240 tCO2e per annum (10% of the University’s 2018/19 scope 1 and 2 emissions). The PPA also potentially represents a modest saving compared to market prices over the contract period[1].

The Environmental Sustainability Strategy Committee (ESSC) is overseeing the development and implementation of a programme of work to deliver the University’s Science Based Target (SBT) to achieve ‘zero carbon’ by 2048. This includes the development of the University’s own renewable energy assets, a programme to reduce the University’s use of natural gas, and improvements to the energy efficiency performance of new and existing buildings. The PPA is seen as a stepping stone and contributing measure towards the ‘zero carbon’ target, and explores the procurement-based measures that can be adopted to support the estate wide actions the University will take.

 

[1] Energy market prices fluctuate significantly therefore cost savings cannot be guaranteed.