We’ve been looking into changing our electricity provider at Claydon Court at the moment so we did some research on the cost of buying a renewable energy policy vs balancing out “dirty” electricity with the World Land Trust as we currently advocate.
A number of electricity suppliers in the UK now offer a plan which is advertised as 100% renewable energy.
UK renewables electricity tariffs actually work by supplying the user with electricity from the national grid but for every unit (kWh) consumed, the energy provider buys one back from renewables generators to be added to the grid subsequently.
As it is not currently possible to trace the source of the actual electrons you receive and so this is currently the best way to allow customers to pay for renewable energy.
This is a similar process to carbon balancing – (a process where you can pay after you’ve generated emissions to fund projects that reduce the net level of carbon dioxide in the atmosphere) – in that you take supply of dirty energy initially and take action to neutralise the carbon emissions afterwards.
We got some quotes for a small/medium sized business and undertook some cost analysis to see which of these similar processes is currenly cheaper to enact: renewable electricity or balancing normal electricity.
According to the Department of Energy and Climate change, the average Non-Domestic (i.e business) electricity consumption for the East of England as 69808 kWh per year.
A reputable comparison service last week supplied us with the best current prices per kWh for a renewable and a non-renewable tariff (excluding standing charges for now to keep things simple):
There’s currently a 1p/KWh (day units) difference between the cheapest standard electricity plan and the cheapest renewables plan for a small/medium sized business. This works out annually thusly:
Renewables plan: £8,377 / annum on average in East of England
Standard plan: £7,679 / annum on average in East of England
This produces a yearly saving of just under £700 if you chose the standard plan and aren’t concerned with the emissions output.
However, using that amount of electricity would generate emissions of 35 tonnes of CO2 with a standard plan (the renewables tariff comes ready-balanced). The cost to balance out the 35 tonnes of CO2 with the World Land Trust’s stands at £524 (£15/tonne).
So the effective cost of a carbon-balanced, non-renewable energy plan (electricity cost + carbon balancing cost) would still be £100 cheaper (£8,202) than the renewables plan (£8,377) per year and I haven’t even included the standing charges which were also higher with the renewables plan.
It is also worth noting that carbon balancing often has further reaching benefits to the world than only balancing the amount of carbon in the atmosphere. Many projects also restore the ecological structure of endangered forest habitats as well as their plant-density and consequent capacity to sequester CO2. Projects may also have socio-economic benefits where ecosystem restoration provides improvements to the quality of life of peoples local to the project area in tourism or ecosystems services for example.
So for the best deal on a carbon balanced electricity policy, we can conclude that it is currently cheaper to use the cheapest standard plan you can find, minimise the amount you use and balance what you can’t reduce via the World Land Trust.
As we’ve always said Measure, Reduce, Balance!