Commercial, Sourcing Renewables - June 5, 2019
Starbucks closes innovative 3-project RE deal
Starbucks has purchased a three-project renewable energy portfolio comprising wind and solar farms in North Carolina, Oklahoma, and Texas. The PPA portfolio will provide clean power to the electricity grids that serve more than 3,000 U.S. Starbucks stores and communities by 2021, when all three projects are online.
“As we continue to strive towards building and operating the world’s largest green retail business, we know we need to find innovative business models to achieve our renewable energy goals,” said Patrick Leonard, energy manager for Starbucks company-operated stores in the United States and Canada, in a statement. “Not only does this portfolio model allow us to support new solar and wind farms that will deliver the clean energy equivalent to the electricity powering over 3,000 stores, it also opens the door for many new buyers to cost-effectively source smaller amounts of renewable energy.”
The portfolio, custom-built for Starbucks using LevelTen Energy’s technology-enabled procurement platform, aggregates three strategically located power purchase agreements (PPAs), each with nearly-identical terms, from three distinct project developers. This portfolio transaction, in which a corporate buyer simultaneously procures a fraction of the power generated by multiple new projects, is unprecedented, according to the statement.
The portfolio incorporates 146 total megawatts from three new renewable energy projects: 50 megawatts of wind power from an ALLETE Clean Energy project in the SPP market, acquired from Apex Clean Energy; 50 megawatts of solar power from a Cypress Creek Renewables project in the ERCOT market, and 46 megawatts of solar power from a BayWa r.e. project in the PJM market.
As more corporate and industrial entities seek to procure renewable energy, according to the statement, longtime buyers like Starbucks help guide the industry by supporting innovative PPA deal structures. The portfolio model – much like a mutual fund – minimizes risk and allows buyers to capture the scale pricing benefits of the country’s largest, most economically attractive projects. The geographical and technological diversification inherent in a portfolio also better complements’ Starbucks’ energy footprint and strategy.
“The Starbucks portfolio PPA demonstrates the promise of new renewable energy purchasing models,” said Bryce Smith, founder and CEO of LevelTen Energy. “Starbucks is setting an important precedent in the corporate energy procurement space by demonstrating how a single off-taker can safely and easily procure shares of renewable energy from a variety of new wind and solar projects. This approach enables many more corporate and institutional buyers to support, in a fiscally responsible way, the massive buildout of new clean energy projects across the globe.”