December 2012: Interesting press release from the Cabinet Office stating that Government will use its considerable buying power to contract PPAs (power purchase agreements) directly with stalled renewable electricity projects.
“The Government Procurement Service (GPS), part of the Cabinet Office Efficiency and Reform Group, is the UK’s largest energy customer, spending £1.5bn a year on gas and electricity. GPS buys energy for 75% of the entire public sector which accounts for 3% of total UK energy demand. In the New Year it will open a pilot to diversify 2% of its demand, worth £25m a year.
For the first time ever, contracts will be offered direct to renewable generators for a set proportion of their capacity for up to 25 years. This will appeal to new projects which can bank on the guaranteed business to attract investment. We are aware of at least 150 projects which are currently stalled and may need finance. A small 10MW generator is estimated to return £5m a year to the local economy as well as creating jobs in the energy and construction industries. This pilot is for non-intermittent power such as biomass and energy from waste.”
This list of ‘150 stalled projects’ is not set out – so hard to say if any in London – but clearly something to watch. It will be interesting to see what this modest spend of 2% (actually 1.67%) of Government’s energy spend can achieve – and could provide an indication what something more ambitious could do to promote low carbon and renewable generators.
The Mayor had actually committed London Underground (one of the biggest electricity purchasers in the UK) to undertake a similar plan: this was announced sometime ago and the Mayor has previously (January 2012) stated that “LU is actively pursuing local solutions in London to source energy from renewable and low carbon sources. Currently, it is in commercial negotiations with partners to deliver schemes in the short to medium term which are projected to provide up to 20 per cent of LUs current peak demand. Negotiations with other partners are focused on stimulating the increased availability of low carbon/renewable solutions in the longer term to enable LU to meet its target.” There doesn’t appear to be any more recent information on how these negotiations are progressing, but hopefully something will be set out in Transport for London’s 2012 Environment Report – which should be published shortly…