Dong Energy covers extra cost of green power for businesses

Business energy supplier Dong Energy is offering its customers renewable electricity for the same price as traditional sources, in a bid to encourage companies to switch to cleaner power.

The business utility will subsidise the additional costs of going green so that UK firms can access renewable electricity and achieve sustainability targets without commercial disadvantage.

Dong Energy Sales managing director Jeff Whittingham said: “We are taking this bold step because we believe that all businesses should have access to renewable electricity supply without paying a premium.

“If we are to embrace a truly sustainable energy future, we will need to take an integrated and forward-thinking approach to energy. One part of this is putting renewable electricity on an equal footing with traditional ‘brown energy’ sources.”

In 2001, the government introduced the Climate Change Levy, a tax designed to encourage businesses to use less energy. Businesses that purchased renewable electricity could gain exemption from the tax by purchasing levy exemption certificates (LECs). This drove a high demand for renewable supply in the UK and resulted in renewable electricity selling at a similar or lower price to brown electricity.

Last year the government announced that the exemption would be phased out from August 2015. As a result, demand for renewable electricity has once again become a sustainability choice for businesses.

Renewable Energy Guarantee of Origin (REGO) certificates – used as evidence for the source of renewable electricity supply – now hold a value in the market, and renewable electricity is sold at a premium to brown. 

Whittingham added: “We are making this announcement at a time of tight budgets and fierce competition for businesses of all types and sizes who are under growing pressure to reduce carbon emissions and develop a sustainable business.

“It is also a time when cost is key and the additional financial burden of buying renewable energy might be difficult for some companies to justify on a commercial basis.”

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BDC 305 Jun 2023