Price and publicity motivate global giants to go green

TheBusinessDesk.com, in partnership with Drax and DLA Piper, has examined the challenges and opportunities that the low carbon economy presents for Yorkshire.

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GOOGLE and McDonalds are among the companies that have signed up to long-term investments in low carbon.

Google’s guiding mantra is famously “don’t be evil” but it has actively sought to blow in a wind of change with investments in renewable energy.
The American search engine giant has led the way in terms of corporate office culture and is now setting the pace with its approach to the environment, having invested more than $1bn in wind and solar projects.
Its data centre in Finland that is cooled by sea water but it was its power purchase agreements in Sweden that made international headlines.
In 2013 it signed a 10-year power purchase agreement (PPA) to buy the entire electricity output of a 72-megawatt project by O2 Vind in northern Sweden, and last year it followed that by another 10-year deal to purchase the output of 29 turbines at four wind farms in southern Sweden.
Francois Sterin, director of Google’s global infrastructure team, explained the thinking behind the power purchase agreements (PPA).
He said: “We’re keen to make sure that our data centres around the world use as much renewable energy as possible. By entering into long-term agreements with wind farm developers over the past few years, we’ve been able to increase the amount of renewable energy we consume while helping enable the construction of new facilities.”
He added: “We keep signing these contracts for two main reasons: they make great financial sense for us, and increase the amount of renewable energy available in the grid, which is great for the environment too.”
DLA Piper energy partner Natasha Luther-Jones supported her colleagues at DLA Nordic in advising O2 Vind on its PPA with Google, and she is clear the deals have helped polish the company’s reputation for being green.
She said: “The PPA we did with Google in Sweden was driven by the green aspect. It received a lot of publicity in America and the UK in the Financial Times, and I wonder whether there’s more we can do here in the UK to encourage companies to be green.”
“We did a similar end user PPA for Lloyds this year.”

Energiekontor develops onshore wind and solar sites across the UK, managed by its teams in Leeds and Glasgow, where it currently has six operating sites, plus one with planning approval and 10 in the planning process.
Richard Lill, financing and constuction manager at Energiekontor, believes that companies are being encouraged by more than just environmental policies.
“The fundamental driver is price, they want to do a long-term price,” he said.
“We sign a PPA with a large corporate customer and that’s typically for 15 or 20 years – there’s the green aspect and some of them do promote it. One of the companies is McDonalds and they do promote it.
“They do have that social agenda and they wish to do the green side of it, but fundamentally it is a long-term pricing to protect their business, because they spend so much money on energy.”
Understanding the range of reasons that can form the motivations for investing in being part of the low carbon economy is important, but Teresa Hitchcock, partner at DLA Piper, also stresses the need for everyone to be part of this mission.
She added: “A lot of the work that I do is with large industrialists in relation to their corporate social responsibility agenda and how they factor in those things which make business sense as well.
“We have always said being green can make good economic sense, rather than it being the icing on the cake or being best in class.
“It can actually save money if you do it properly and if you commit to it properly. I personally think that’s really important, but I also think the smaller consumer is absolutely essential to the mix and that’s why I think we need to join the dots up.
“Not just at the corporate level but also trying to join them lower down so we have the drivers at the bottom as well because it is the smaller communities that will emphasise the need for this.” 

 

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