Reducing your carbon footprint as a tenant can be particularly challenging, especially when there is no access to roof space for solar installations. At PowerMarket, we have been increasingly working with tenants who face this exact challenge. The good news is, that there are effective ways to overcome this and achieve your Scope 2 emission targets even as a tenant. One of the most effective methods is through offtake contracts.
What are Scope 2 Emissions?
Before we dive into the solutions, it’s important to understand what Scope 2 emissions are. Scope 2 emissions are the greenhouse gas emissions from the electricity, steam, heat, and cooling that a company purchases. For tenants, this often forms a significant portion of their total emissions.
What are Offtake Contracts?
An offtake contract is a long-term contract under which a business agrees to purchase electricity directly from a renewable energy generator. The agreement outlines the terms including the price, the amount of electricity to be purchased, and the duration of the contract. This not only helps in reducing the carbon footprint but also provides a hedge against future electricity price volatility. These contracts are also known as Corporate Power Purchase Agreements or CPPAs.
Benefits of Offtake Contracts
- Reduction in Carbon Footprint: By purchasing renewable energy, you directly contribute to the reduction of greenhouse gas emissions.
- Cost Savings: Locking in a price for renewable energy can provide protection against future energy price increases.
- Enhanced Reputation: Demonstrating a commitment to sustainability can enhance your brand’s reputation and attractiveness to customers and investors.
How To Get Started?
- Assess Your Energy Needs: Determine how much energy your business consumes and what percentage of that you want to source from renewable energy.
- Find a Suitable Partner: Look for renewable energy producers or intermediaries who can help in setting up a CPPA or an off-take contract.
- Negotiate Terms: Work out the terms of the agreement including the price, duration, and quantity of energy.
- Implement the Agreement: Once the agreement is signed, the renewable energy producer will start supplying energy as per the agreed terms.
Achieving your Scope 2 emission targets as a tenant is very much possible with the right approach. CPPAs and off-take contracts provide an effective way to source renewable energy and contribute to a more sustainable future. At PowerMarket, we are here to guide you through every step of the process. Reach out to us today to explore how we can help you achieve your sustainability goals.
