Centrica targets 4GW of renewable PPAs by 2025

Centrica has revealed plans to invest £100 million in renewable assets annually by 2025 whilst also securing 4GW of green power purchase agreements (PPA) over the same timeframe.

The British Gas parent company recently published its Climate Transition Plan in which it outlined its strategy to become a net zero business by 2045 and help customers to reduce their emissions as well.

The plan includes proposals to give extra support to consumers in vulnerable circumstances, introducing an industry-wide social tariff to help them offset the costs of the transition to net zero.

In a bid to grow the amount of low carbon energy available to its customers, Centrica said it is developing plans to invest up to £100 million annually by 2025 in large solar assets across the UK, Europe and North America.

It is also seeking to grow its share of the UK retail market over the next five years, offering customers a “guaranteed green energy supply” via PPAs. In total it is aiming to contract 4GW of new renewable PPAs in the UK and across Europe by 2025.

The report recognised the increasing popularity of green tariffs and outlined work it has already done in Ireland in offering consumers a PPA-backed tariff. Centrica said it wants to “significantly grow” the number of customers supplied on the tariff to more than 25% of its customer base, helping it to reduce the overall carbon intensity of its Irish power supply by around 40% by 2025.

“We know, however, that green tariffs are complicated, and customers want peace of mind that they’re making a positive contribution to tackle climate change…we’ll also collaborate with the UK government in its review of the green certification regime, to represent the interests of our customers whilst ensuring a well-functioning market that supports renewable generation,” the report stated.

Elsewhere, Centrica outlined its plans to use new technology to help its customers become net zero by 2050, while reducing their carbon intensity by 28% from 2019 figures by 2030.

They includes increasing the number of customers on Hive heating to more than 2.5 million (up from 1.4 million) by 2025, installing 6 million more domestic smart meters by 2030 and installing 100,000 EV charge points and 20,000 heat pumps annually by 2025.

The report highlighted how the transition to net zero will likely increase energy costs for consumers. As such, Centrica committed to work with the government to influence a “progressive approach” to decarbonisation which both incentivises progress and ensures robust safeguards.

It called for enhanced protections for vulnerable customers and backed the introduction of an industry-wide ‘social tariff’ in the form of a “deeper Warm Home Discount”. This extra support, it added, would reduce energy bills for those who need it most, and help offset the cost to them of meeting net zero.

Speaking to Utility Week Jim Rushen, group head of environment at Centrica, said: “Climate change is one of the biggest challenges the world faces and the energy sector is on the frontline in that response. COP26 in Glasgow not only needs to galvanise global governments on the required action, but must also bring meaning and inspire action by individuals, households and communities.

“The notion of ‘thinking globally, acting locally’ has never been more relevant, particularly when it comes to the everyday behavioural changes and choices all of us must make in the years ahead.”

He added: “Although the UK and Ireland have made good progress in decarbonising energy in the last decade, it’s mainly been achieved without the need to engage consumers as their electricity supply has smoothly switched from coal to gas, and increasingly to renewables.

“The next phase of energy transition will be harder as consumers will need to be active and willing participants for it to be successful. So we’ll work with government and others to ensure we have the right policies and support mechanisms in place to make progress by harnessing the best blend of technologies and endeavour to transition at a pace that works for our customers.”