The power of collaboration in sustainable procurement for Net Zero

Posted: 28th February 2024 Annabel Gray, Director of Sustainability

Last year the “Survive and Thrive Report” [1] highlighted that “not a single person in the energy supply chain believes the UK net zero targets will be achieved”. The key challenges and concerns reported relate to the current widespread delays in project funding and the fact that the renewable sector is being held back by financing challenges, planning complications and licensing issues.

The Government has pledged that all the UK’s electricity will come from low-carbon sources by 2035.  However, a lack of conviction over their net zero strategies has led to the number of companies expanding into green energy falling from 2021 to 2022/23 (by 8%) and the UK being placed 8th out of 8 world economies for renewable generation growth[2].  We find ourselves currently in a limbo period, especially as the Government explores hydrogen power.  The flow of finance into the renewables sector is stagnant until the decision on hydrogen power is made (this is due in 2026).

lack of action and financial commitment towards the Government’s ambitions and strategy for net zero is misleading. In a recent article[3] in Supply Management magazine, the writer suggests that the government needs to stop dithering over electricity markets, demonstrate clear political support for the transition to clean energy and chart an ambitious course.

We could look into a crystal ball to predict what might happen at our next general election and the incoming Government’s policy plans to stimulate the markets towards a transition to more renewable energy sources. But to a large extent, this isn’t in our control. Instead, we want to focus on what we can directly influence as a business in the built environment to stimulate the renewables market and access clean energy without greenwashing.

The role of stakeholders in the built environment

UKGBC[4] calls on its members and other built environment stakeholders to collaborate with the electricity market; using the tools in this guidance, we can send a collective message that we will no longer settle for the status quo and need energy products without the greenwash, supplied with the evidence to prove that our procurement is driving meaningful change towards a net zero future.

Government policy and market reform will play a part in this, but as businesses, we also have a role to play. How we collectively procure electricity can help drive the change we need, driving investment into new renewable generators and supporting technologies like energy storage. Procuring with suppliers rather than from them and creating an appropriate relationship is key, as are the concepts of sustainability, the circular economy and contract management. All of this must also be considered with the 12-month transition to the new Procurement Act expected to be fully implemented by October 2024 and the impact that may have on the options.

Landlords in the built environment need greater transparency and quality of information from the energy market, to enable them to meaningfully compare the procurement options available now and shortly; such knowledge will help to shape stakeholder discussions with energy suppliers to realise the evolution that is needed to ensure the choices the affordable housing sector makes have the impact needed for future businesses, customers and the planet.

Organisations also have a role to play in driving the market to accelerate the decarbonisation that is already happening, sending demand signals which encourage renewable developers and energy suppliers to invest in the creation of new capacity and evolve their offering to reward consumers who manage their demand to minimise emissions and enable a resilient, net zero system.

Finally, buildings have a role to play; they are no longer simply consumers of energy – no longer just hungry endpoints in the energy network. Our buildings are now integral to our shared electricity infrastructure. Whether we’re generating renewable energy on-site, using systems to vary buildings’ energy demand, storing electricity to smooth out peaks, or procuring emerging energy products from the market that encourage flexibility, our buildings are becoming increasingly active, dynamic components of the wider system.

In the absence of Government policy and progression, there is a role for housing providers to step into as representatives within the built environment.  There is a need for collaboration, not only inter-sector but cross-sector, with the energy markets shifting from adversarial to partnering relationships; it is encouraged that the principles outlined in this article are embedded throughout a housing provider’s procurement strategy, placing sustainability front and centre. Adopting this approach will put the affordable housing sector back in the driving seat to deliver the outcomes that it needs to see from the energy markets, helping to protect customers of affordable housing.

For further discussion on this article or for enquiries regarding your organisation’s commercial and procurement or sustainability needs, please contact:

Annabel Gray – Director of Sustainability

Spencer Hill – Director of Commercial and Procurement

 

 

 

[1] EIC Survive and Thrive VII 2023 by Energy Industries Council – Issuu

[2] Is the UK in danger of falling behind on green energy supply chains? – Supply Management

[3] Is the UK in danger of falling behind on green energy supply chains? – Supply Management

[4] UK Green Building Council Renewable Energy Procurement Summary Report August 2023

 

 

 

 

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