Twenty UK universities have joined together to agree a £50 million renewable energy power purchase agreement (PPA).
The deal is thought to be the first of its kind in the UK and was brokered through The Energy Consortium (TEC), a not-for-profit energy buying group, and Squeaky Clean Energy, a UK green energy supplier.
It will help the universities – which include Newcastle, Exeter and Aberystwyth – to reduce their energy bills and carbon footprints, Squeaky Clean said.
Under the PPA, the universities will buy £50 million of energy from a portfolio of UK wind farms owned by Statkraft. The deal fixes power prices at a competitive rate for the next ten years, minimising the universities’ exposure to market volatility.
According to Squeaky clean, this type of deal is normally the “exclusive domain of large corporates”. The transaction will help to open the corporate PPA market up to much smaller companies and public sector bodies, it added.
“The corporate PPA market has long been touted as a means for larger organisations to procure renewable power and enable subsidy-free development,” said Richard Murphy, Managing Director, TEC. “But to date, it has largely been the preserve of very large companies, requiring substantial commitments from buyers. By acting together in a collaborative approach facilitated by the energy expertise here at TEC, these institutions, whether large or small, have been able to navigate a previously inaccessible market.
“The combined challenge facing the Higher Education and wider public sector is to secure reduced carbon emissions whilst saving money and I am delighted that these universities have secured both through this ground breaking deal.”
Squeaky Clean said that the deal was enabled by standardising and simplifying documentation to cut the size of the contract down to a “previously unimaginable” 15 pages, a move that also helped to lower transaction costs.
“Having pioneered the first Corporate PPA (CPPA) in Europe back in 2008 for Sainsbury it’s been an ambition of myself and team at Squeaky to democratize the CPPA market. After several years of development we’ve achieved another first by simplifying, standardizing and shrinking the CPPA enabling smaller organisations to access the market for the first time,” said Chris Bowden, MD of Squeaky Clean.