Onsite Generation: Benefits of Behind-The-Meter
Share on LinkedIn23 Aug 2023
The energy market is moving rapidly and with annual reports being used to showcase progress made on reducing carbon emissions, as well as mandatory site audits taking place, businesses are looking for ways to stand out against competitors.
Positive steps are being made with the increased demand and purchasing of Renewable Energy Guarantees of Origin (REGO) certificates, which are assurances that the energy being consumed is from certified renewable sources. However, with one in three businesses generating electricity onsite it can now be seen as a unique selling point in which organisations can decarbonise business operations and demonstrate proactive leadership in securing energy independence.
What is Onsite Generation?
Onsite generation is the production and storage of electricity within the operating grounds of an organisation; this can include, but is not limited to: solar PV, wind turbines, hydropower, and combined heat and power (CHP) units. The use of onsite generation can reduce the emissions associated with a business through a reduction in purchased electricity, and transmission and distribution losses. Therefore, as organisations develop a strategic approach to reduce emissions, addressing all onsite generation opportunities is of key importance.
When talking about behind-the-meter, commonly used to describe activities taking place on the site being measured by the meter, onsite generation falls into category. The implementation of onsite generation is a way to reduce carbon emissions whilst making organisations more commercially attractive. In-front-of-the-meter would cover devices like REGOs which, whilst are a clear step in the right direction and are gradually becoming the preferred method as part of acquiring electricity, are becoming more expensive.
What are the Benefits?
Cost Effectiveness
Although initial investment into onsite generation is required, over time, installed solutions pay for themselves and down the line end up being a cost saving technique. It is estimated that a total of £12 billion across all businesses in the UK could be saved through implementing onsite technologies. If the option of a capital investment doesn’t fit for the organisation in question, the alternative of a funded solution can be available with the investment typically being cash positive from month one and throughout the period of the funding period.
Energy Independence
One of the largest benefits of onsite generation is the independence from the grid, as a result of directly generating electricity and reducing imported consumption. In addition, less reliance on the grid allows for softening in relation to the volatility of the energy market and increasing energy rates.
Additionality
The purchase of REGO (Renewable Energy Guarantees of Origin) certificates is becoming more expensive and businesses are looking for ways to meet emission targets whilst not greatly increasing costs due to demand. The implementation of renewable onsite generation can be an effective solution. Whilst there are initial installation costs for onsite generation, over time the units purchased can pay for themselves with the energy they produce. Moreover, the funding and generation of new renewable electricity onsite covers the concept of additionality - this in turn leads to generating REGOs onsite (if large enough). It is important to note this only works with renewable energy generation and plays a large part in the displacement of carbon emissions.
Diversifying Energy Mix
Solar PV has become a significant technology for businesses wishing to diversify the company’s energy mix, reduce greenhouse gas emissions and become more independent from the grid. 60% of all businesses currently using onsite generation are using solar PV – making it the market’s most popular technology. The rapid rise in solar panel demand has pushed development into making them more durable and efficient for up to 40 years after purchase, driving down the return on investment as they also become less expensive.
Direction to move in
Onsite generation does not come without its own considerations. It is important for a business to recognise the feasibility of being able to install instruments like solar PVs as they require conversations around roof space, ownership, energy demands, and tenancies. Typically, structural audits are required, convening with the associated district network officer (DNO), and the planning and implementing of the technology. In many situations businesses seek specialist help for guidance in deciding what form of generation they wish to purchase and then through the implementation process which follows.
How NUS Can Help
If you wish to talk further about the implementation of onsite generation to your business then please contact NUS. We can convene with the necessary partners, plan and execute the necessary steps in order for you to be able to begin producing energy onsite and ensure the ongoing maintenance and performance of the system installed. Our UK office has a dedicated team committed to Energy and Sustainability Services (ESS) in which we support in implementation of onsite generation as a stand-alone project or after carrying out energy and carbon compliance with the Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS). We can also cover compliances such as the Climate Change Agreement (CCA), Streamlined Energy and Carbon Reporting (SECR) and much more.
Please contact us for more information.
More: Energy Market Commentary, Climate Change Agreement (CCA), Energy and Sustainability Services (ESS), Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS), Streamlined Energy and Carbon Reporting (SECR)
