Buying Green from Energy Suppliers

Are you buying energy that is partly generated from renewable sources, or is your supplier merely ‘greenwashing’?  This question is difficult to answer, as energy cannot be 100% ‘green’.  But by understanding how green energy is certified, business customers can ensure that their supplier is capturing part of their energy from renewable sources. 

Why buy renewable energy? 

Homo Sapiens and their ancestors have been harnessing nature to create energy via fire for around 1.9 million years.  However, for most of human history, the prime movers of power have been humans themselves, with the help of animals.  What is extraordinary about the industrial revolution is that it began in earnest a mere 322 years ago with the invention of the Savery Pump. 

Where does our energy come from?  Virtually all energy used on earth derives from the following sources: 

  1. the sun 
  1. geothermal energy (derived from the earth’s sizzling core, tidal energy, and nuclear energy (created by forcing together or breaking apart atoms) 

Mechanical energy offered by running water begins as sunlight evaporating water, rising into the atmosphere and creating rain.  Some of the rain lands on high land and converges as gravity pulls it into streams and rivers that run towards lakes and oceans.   

Fossil fuels (hydrocarbons, primarily coal, fuel oil or natural gas), are formed from decaying plants and animals which have been subjected to enormous heat and pressure over millions of years.  Fossil fuels are not renewable but currently generate 64.5% of the planet’s electricity (2017). 

Electricity is created by burning coal or oil in large plants.  This generates heat which is in turn used to create steam to drive turbines which produce electricity.  Alternatively, hot gases are used to drive a turbine to generate power.  A combined cycle gas turbine (CCGT) plant also uses a steam generator to increase the amount of electricity produced.  

So what is this doing to the environment?  Clearly, not much good.  The burning of fossil fuels damages virtually every aspect of our world.  The unearthing, processing, and moving of natural resources strip lands and collapses ecosystems.  The fossil fuel industry utilises immense stretches of land for infrastructures such as wells, pipelines, access roads, as well as facilities for processing, waste storage, and waste disposal.  Acid runoff from coal mining pollutes waterways, and oil spills result in the death of precious wildlife.  Burning fossil fuels also produces large quantities of carbon dioxide when burned. Carbon emissions trap heat in the atmosphere, which leads to climate change. 

Can we move to 100% renewable energy?  Eventually, we will have no choice.  However, such a huge change is not without drawbacks.  Václav Smil, Distinguished Professor Emeritus in the Faculty of Environment at the University of Manitoba and political analyst, was the subject of an in-depth article on the history of energy, which discussed the challenges of converting fully to renewable energy sources: 

“The barriers to total conversion—much like the problems that plague our energy infrastructure—are a funny mixture of policy, technology, infrastructure, and physics. For example, the possibility that nuclear power might take up any of the load in the U.S. seems extremely low, given that no new plants have been built since the 1970s. That’s not a physics problem, that’s a policy problem. Infrastructurally speaking, nuclear is not that different from coal or liquified natural gas. Fuels are brought to a site, where they are consumed while giving off enormous amounts of heat that runs a steam turbine which generates electricity. We know how to make nuclear reactors and hook them up to the grid, but Americans just don’t want to do it anymore. And there are good reasons for this! But compare that decision to the one made by France, which went all-in on atomic power and generates about 75 percent of its energy from nuclear reactors. 

As far as converting to wind and solar, Smil sees much bigger technological and infrastructural hurdles. A switch to renewables means a transition in terms of both resources and prime movers. The character of renewable resources is fundamentally different from that of fossil fuels. Where fuels are highly dense stores of energy and relatively easy to reliably transport, the renewables are characterized by the highly fickle ebbs and flows of nature. Some days are sunny, others have clouds. Some days are windy, others are quiet, still others are too windy to safely run the mill.” 

Although the challenges involved in switching to 100% renewable energy are vast, so is human resourcefulness.  And currently, there are many advantages (beyond environmental responsibility) for businesses who choose to switch to renewable energy suppliers and/or sources. 

The advantages for businesses switching to renewable energy 

Idealism won’t get you far here.  Whatever you bring to the table needs to contribute to business value. – Jan-Kees Vis, Global Supply Chain Director Sustainable Agriculture, Unilever. 

Regardless of how you personally feel about climate change and environmentalism, all sustainability strategies must align with commercial reality.  The business advantages for switching to renewable energy relate to long term cost-saving, marketing, and positive PR.   

The hospitality industry has long recognised the value of committing to sustainability and has been a leader in environmental consciousness.  Visitors, as well as hotel managers, have a positive attitude towards the responsible use of energy resources and a quick search through Google allows tourists to choose hotels that run on green energy. 

Switching to renewable energy is a powerful PR initiative.  Such action demonstrates a commitment to corporate responsibility.  Not only does this attract consumers, but also investors, suppliers, and potential joint venture partners. 

Many of the world’s largest companies have switched to renewable energy, including Google, Unilever, and BMW.  And some, like IKEA, are making a profit from selling unused self-made energy back to the national grid. 

Finally, in turbulent times, such as what we have experienced in 2020, employees thrive in organisations that have a sense of purpose.  Purpose can take on many forms, including a commitment to sustainability.  This can boost staff morale, encourage innovation, and attract talent to your organisation. 

However, committing to green energy is all well and good.  But beware – consumers are not only becoming more environmentally conscious, but they also have enormous access to information, thanks to the internet.  Environmentally friendly claims can easily be fact-checked, which is why businesses must be vigilant when purchasing renewable energy. 


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