United Utilities | April – May 2021
United Utilities commissioned Cornwall Insight to provide research and analysis into the reporting of, and value associated with, accredited renewable electricity in the GB market over the period 2030 to 2050. Sector body Water UK announced its Net Zero 2030 Roadmap in December 2019 under which a pledge to deliver a net zero water supply for customers across the country, with United Utilities – along with the Water UK’s other members – having committed to this. As a result, the Company required research to inform investment decisions and emissions reporting considerations associated with the sector’s 2030 target.
Cornwall Insight’s review of existing policy examined both mandatory and voluntary aspects of emissions reporting, with a forward-looking assessment providing a view on potential changes to these frameworks between now and 2030, in addition to a longer-term outlook to 2050. Our analysis incorporated an evaluation of the potential implications of these areas, examined policy measures of relevance to the Company and its operations, and their applicability and relevance to carbon reporting.
United Utilities has already committed to a range of energy and emission reduction measures as part of its wider sustainability initiatives. These include investment in generation capacity, carbon offsetting and land restoration efforts and gas decarbonisation (through biomethane) and transport. Given these, Cornwall Insight provided its assessment of future options for renewable electricity purchasing and their suitability to the Company, doing so alongside a review of the approaches adopted by other water and wastewater companies in England and Wales to provide a sectoral context.
With the use of REGO-backed electricity tariffs increasingly mainstream in the non-domestic supply sector as a means by which to demonstrate the purchase of renewable power, the need to demonstrate additional commitments and actions is an important consideration for companies as part of their environmental policies. As well as providing a long-term forecast of Renewable Electricity Guarantee of Origin (REGO) values to the Company in conjunction with a view on the carbon intensity of the GB electricity grid from its quarterly ‘Benchmark power curve, Cornwall Insight examined a range of other options for United Utilities, including Corporate Power Purchase Agreements (CPPAs), behind-the-meter investment, carbon offsetting/insetting and transport decarbonisation.
Each of the options was assessed against a range of criteria, including financial metrics (operating cost, capital cost, cost reduction potential, revenue generation potential), carbon emission considerations (emission reduction potential, speed, and duration of emission reductions) and practical factor (speed of implementation, ease of implementation, transparency from a reporting perspective) in addition to assessing regulatory and policy risk.