Buildings are "essential" to grid decarbonisation

The way electricity is procured for our buildings can accelerate our transition to a reliable, resilient, and zero carbon grid, writes Tom Wigg, senior advisor – Net Zero Carbon Buildings, UK Green Building Council.

In the face of net zero targets that the UK appears increasingly off-track to meet, accelerating the decarbonisation of our electricity system is more critical than ever before. Whilst good progress has been made over the last decade in transitioning the UK from fossil fuels like coal and gas to renewable alternatives, now is not the time to lose focus, and we still have a long way to go if we’re going to achieve a fully decarbonised grid by the Government’s ambition of 2035.

Phasing out polluting types of electricity generation is just one piece of the puzzle when it comes to the energy transition. With our buildings responsible for over 60 per cent  of the UK’s national electricity demand, how they operate and procure their electricity are critical to accelerating and supporting that decarbonisation.

    Our electricity grid must operate at a constant frequency: when energy is taken from it, the frequency drops and this must be replenished by energy put in by electricity generators. Traditional forms of generation such as gas turbines can cope well with this reality, increasing or decreasing their output in response to demand. As we move to intermittent renewable generation such as wind and solar, our grid is less equipped to handle times of peak demand on the system.

As we move to enable an electricity system that can operate night and day at net zero carbon, it’s becoming increasingly clear we need to build in greater levels of flexibility at the demand side. Therefore, delivering and operating buildings as active components of the energy system will be of greater importance to decarbonising in line with our climate targets.

The energy market must evolve

The potential for our buildings to have a central contribution to delivering a resilient, decarbonised grid is sizeable. Yet, current energy products and procurement options rarely do anything to drive the energy transition. Most customers currently pay a flat rate for their electricity, irrelevant of whether it’s generated from fossil fuels or renewable sources. For this to change, the energy market needs to evolve, rewarding building owners who operate their assets with greater flexibility, responding to the availability of renewable electricity on the grid.

    The Government’s Review of Electricity Market Arrangements (REMA) has an important role to play in ensuring the wholesale markets can effectively support the transformation needed in the electricity system to accommodate widescale electrification of heat and transport, alongside the transition to a grid supplied primarily from intermittent wind and solar power. This evolution of the wholesale markets can be complemented by changes in the way customers buy and sell electricity on the retail market and this is where stakeholders in the built environment can play their part.

    For those who own and operate buildings in the UK, the collective voice of customers demanding more from their energy suppliers will be a powerful mechanism for driving change and improving the energy product offering for the entire industry, while helping to accelerate the decarbonisation of the grid. UKGBC’s new guidance on renewable energy procurement seeks to support this movement. It’s designed to enable those who own or operate buildings at a commercial scale to make more informed decisions about how and where your energy is sourced, providing you with the tools to achieve your climate commitments whilst driving the continued decarbonisation of the energy supply sector.

Understanding the quality of your renewable electricity

Before the market can evolve, we need to check-in on the status quo. The unique mechanisms through which our electricity system is operated and energy is traded in the UK have created a number of challenges in assessing how ‘green’ the power being supplied to a customer really is. Once generated, all energy is ‘pooled’, meaning the end customer has no way to distinguish in physical terms if the electricity is from a gas turbine or a wind farm.

You can determine the quality of the electricity you procure by assessing its performance against three principles: renewable, additionality, time-matched. The best electricity procurement approaches will seek to maximise the extent to which they respond to these three principles.

In addition to procuring electricity in line with these three principles, buildings should also generate as much renewable electricity on site as possible, by installing technologies such as solar PVs. This will enable you to operate as flexibly as possible and support the grid by becoming responsive contributors to the wider energy system.

Tools for engaging your energy suppliers and rating their performance

Most energy customers procure part or all their energy through an energy supplier, typically through an electricity tariff. Therefore, understanding the green credentials of your energy means you must engage with your supplier. But this information is rarely readily available.

Recognising this, UKGBC’s guidance sets out a range of tools for engaging suppliers and sourcing the relevant information to compare options available on the market. The tools include quantitative metrics to secure numerical information for direct comparison with other products, as well as qualitative questions to probe an energy supplier’s overall business strategy and how well it aligns with your climate ambition.

The questions also give suppliers an opportunity to demonstrate ways they are contributing to electricity system’s decarbonisation, as well as any broader positive impacts that may be of interest. The aim of these tools is to put the onus on energy suppliers to justify the quality of their products and enable the built environment to collectively demand greater transparency and less greenwashing.

Equipped with the information from your energy supplier, you can then use UKGBC’s new rating system to understand the performance of your building’s overall electricity strategy, including the energy you procure from the market, as well as the electricity you generate onsite and the way in which you operate your building.

By rating your strategy against the three principles of renewable, additionality, and time-matched, you can better understand the extent to which your building is contributing to the decarbonisation of our electricity system, as well as identifying what actions you can take to incrementally improve that contribution in future. Finally, by sharing this information and your experiences with peers in the industry, we can move together to ensure the built environment is doing all it can to prepare itself for and enable a resilient, zero carbon grid.

Buildings are more than simple consumers of energy

The government’s recent rollback of key green policies is a worrying blow to our climate targets. It simply isn’t possible to achieve the ambition we need while agreeing to delay and dilute the very policies that will help get us there.

Looking ahead, delivering net zero means decarbonising the electricity system must become a top priority. For this, buildings can no longer afford to be simple consumers of energy – no longer just hungry end points in the energy network. Our buildings are now integral to our shared electricity infrastructure and must be equipped with the means to produce renewable electricity on site and operate flexibly to minimise the need to be powered by fossil fuels.

This is precisely why we’d like to see energy markets evolve in synchronicity with the built environment to decarbonise the grid, address energy security and fuel poverty, and reduce operational costs. Energy suppliers, the built environment, and government alike must deepen their understanding of the role buildings must play. And each have a role in facilitating engagement between energy customer and supplier to break down siloed thinking and foster a culture of shared information, transparency and stronger product offerings that genuinely support our transition to net zero.