BT has signed what is claimed to be the UK's largest green electricity contract ...

BT has signed what is claimed to be the UK's largest green electricity contract - for 2,1 TWh, which will cover almost all of BT’s UK demand over three years - with RWE npower and Centrica. Although the deal represents an important step forward and a strong piece of PR for the environmental lobby, recent research from analyst Datamonitor indicates that just 15% of industrial and commercial companies have a set target for procuring green energy. ‘BT has an impressive history in the area of environmental responsibility, having reduced energy related carbon dioxide emissions by 80% since 1991 through investment in energy management and more energy efficient equipment,’ comments Datamonitor. ‘The contracts secured with RWE npower and Centrica, for 1TWh of renewable power and 1.1TWh of energy from CHP (combined heat & power), will see a further reduction of 325,000 tonnes of CO2 emissions per year - the equivalent of taking 100,000 cars off the road.’ ‘The agreement is certainly a landmark deal and represents a powerful PR opportunity for both BT and the wider green lobby. However, the contracts do not mean that the amount of green power generation in the UK will see a corresponding increase. Although RWE npower has some small interests in wind and hydropower, together with CHP these sources still accounted for less than 10% of its 2003 production. Centrica currently has no renewable generation, although it has committed £750mn to new renewable projects over the next three years.’ ‘This means that in reality the companies, particularly Centrica, will be sourcing the power through the use of renewables obligation certificates (ROCs), which allow suppliers to purchase green electricity produced by renewable generators through a traded system. As a result, there are no guarantees that the BT contract will increase the total renewable generation capacity of the UK as a whole, although it is likely to drive further liquidity in ROC trading.’ However, despite this positive news for advocates of renewable energy, recent research indicates that British companies still have a long way to go to emulate BT's achievements in this area. During July and August this year, Datamonitor completed in-depth interviews with senior energy buyers at over 1,500 industrial and commercial companies spending over £20,000 per year on power from around the UK. As part of the study, respondents were questioned on attitudes to green energy. Just 15% of those questioned stated that their company has a target for procuring energy from green sources, with only 3% making this target public and 12% keeping it as an internal objective. ‘In an era in which corporate responsibility is becoming an increasing priority, particularly for those companies with established B2C relationships, these figures are surprising. Of those that do have any sort of target, 27% are aiming for 6-10% of power to come from renewable sources, and 14% for between 0-5%. Around 1 in 10 of these respondents are aiming to source all their energy from green sources,’ comments Datamonitor. ‘Of those that do have a green energy target, external or internal, only 59% of them are currently sourcing a proportion of their energy needs from green sources. This illustrates the fact that even for those who have a green target, four out of 10 have yet to actually start sourcing this power. While this does show that take-up of green energy has not yet fulfilled its full market potential amongst those companies amenable to it, it also highlights a gap between intentions and reality which must be a cause for concern in the green energy lobby.’

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