When the lights switch on at Centrica Energy Trading's offices in Denmark and the rest of Europe in January 2022, Centrica Energy Trading’s electricity consumption will be covered by new green electricity production from Danish solar parks. To ensure that Centrica Energy Trading's electricity consumption is green, the energy trader has signed an agreement with Better Energy regarding the purchase of electricity from a solar park located approximately 40km from Centrica Energy Trading's head office in Aalborg.
In March 2021, Better Energy and Centrica entered a 10-year long-term power purchase agreement (PPA), which ensured the development of two new Danish solar parks, which are expected to produce approx. 112 GWh per year, the equivalent of the electricity consumption of approx. 70,000 Danish households. The production from the two parks is handled and traded on the electricity market by Centrica, and with this new agreement, Centrica Energy Trading's own electricity consumption will also be covered by green energy from one of these two parks. With the new agreement, Centrica is helping to accelerate the development of renewable energy through its financing.
“Companies can make a world of difference for the green transition by demanding new green power. When Centrica wants to cover their electricity consumption from new subsidy-free solar parks, it has a concrete effect on the development of renewable energy, and that is the only way we can achieve our climate goals. We only reach them by setting up new green electricity,” explains Better Energy CEO Rasmus Lildholdt Kjær, who points out that companies can lead by example and accelerate the green transition by buying new green electricity instead of buying of certificates from older power plants.
“We have committed ourselves to a net-zero objective through the Science Based Targets initiative (SBTi), where our priority is to reduce our own emissions, including emissions from our electricity consumption. Our agreement with Better Energy ensures that our electricity consumption at our offices in Denmark and the rest of Europe comes from a newly established, subsidy-free solar park in Denmark,” says Kristian Gjerløv-Juel, director of route-to-market origination and asset management at Centrica Energy Trading A/S.
Today, Denmark consumes far more electricity than is produced, of which about half is produced from renewable energy sources. Reaching Denmark's climate target of a 70% reduction of CO2 emissions by 2030 therefore requires a comprehensive expansion of renewable energy sources over the coming years. This long-term power purchase agreement between Centrica and Better Energy is a good example of the competitiveness of renewable energy sources compared to conventional electricity production, and that the development of subsidy-free solar parks is possible on market terms.