Commercial, Solar, Sourcing Renewables - January 17, 2019
Bloomberg, Salesforce, The Gap and others aggregate for VPPA
Bloomberg, Cox Enterprises, Gap Inc., Salesforce, and Workday have joined forces to collectively purchase 42.5 megawatts of a 100-megawatt North Carolina solar project as the Corporate Renewable Energy Aggregation Group.
A statement called the deal “the first example of companies aggregating similar, relatively small amounts of renewable energy demand to collaboratively enter into a virtual power purchase agreement (VPPA), collectively acting as the anchor tenant for a large offsite renewable energy project. The unprecedented coordination between five international businesses lays the groundwork for other corporates to procure renewable energy cooperatively, maximizing value and reducing risk.”
The aggregation deal was formed with guidance from LevelTen. The collaboration began in late 2017 to evaluate mechanisms for aggregating smaller amounts of renewable energy demand to afford them the collective buying power that is typically necessary to contract directly with a large offsite renewable energy project.
The eventual solution chosen by the group was a uniform VPPA contract and a single, shared legal counsel to negotiate and finalize the transaction, which served to further streamline the final phases of the transaction. The new, simple structure allows the buyers to contract for relatively small pieces of the BayWa r.e. solar project, keep transaction costs low, and learn best practices from each other.
“The process of buying renewable energy through a PPA can be difficult and time-consuming, especially for buyers seeking smaller energy loads. Combining our resources as a single group of buyers has enabled us to scale our impact,” said Michael Barry, Head of Sustainable Business Operations at Bloomberg. “This transaction is a great example of a group sharing best practices, working together and showing the benefit that cross-firm collaboration can have. It also serves as an example to developers that a market exists for these types of projects.”
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