Commercial, Industrial, Sourcing Renewables - September 17, 2018 - By Caroline Mead, EDF Renewables
Buyer aggregation – additional path for renewable energy purchasers
Corporate energy buyers have firmly solidified themselves as a major driver for the renewable energy industry ensuing year after year of announced deals with consistent growth. Combining both distributed onsite generation and offsite, utility-scale projects, it is estimated that corporations have secured greater than 11 gigawatts of renewable energy with no end in sight. Technology giants such as Google and Apple have both announced their operations are 100% powered by renewable energy and Facebook announced in August its commitment to source from renewable energy to support its total global power needs by 2020. These corporate behemoths have big sustainability goals, big energy supply needs and big balance sheets. However, many corporate purchasers fall within a wide and varied spectrum of these same drivers creating a ripe opportunity for corporates to aggregate their purchasing power for renewable energy and opening the market up for a more diverse set of buyers.
Buyer aggregation is when multiple entities partner together to combine their renewable energy volume goals to source from a single project or developer to maximize the price of advantages of economies of scale in renewable assets. A deal such as this was recently announced wherein four companies, Apple, Akamai, Etsy, and Swiss RE - entities that vary in business industry, products, and customer base – collaborated on their renewable energy goals and, collectively, secured multiple, large volume wind and solar project Virtual PPAs in the market. Each entity separately contracted with the selected project and developer but collaborated on their interests allowing the developer to build a larger facility and pass through the volume savings to all the buyers involved in the deal.
Another recent example of buyer collaboration for renewable energy aggregation came from the public power industry in Texas when six publicly-owned utilities coordinated on their mutual interest to pursue low-cost solar energy. This past Spring, a group of six public power entities, led by New Braunfels Utilities and including Denton Municipal Electric, Garland Power & Light, Bryan Texas Utilities, Greenville Electric Systems and Kerrville Public Utility Board, issued a joint Request for proposals (RFP) seeking up to 500MW of solar energy from projects in Texas under long-term PPAs. The targeted megawatt volume was aggregated across all the entities to maximize the economies of a high-volume purchase. Many of these entities are experienced renewable energy buyers but saw an opportunity to collaborate on their mutual interest in contracting for solar energy to secure the most attractive PPA pricing.
Energy aggregation doesn’t come without challenges such as coordinating a group of buyers on their individual goals, approval requirements/timelines, credit profiles and nuances in processes and purchasing. However, the ability to secure a low-cost renewable energy contract is a shared goal for a vast and growing number of corporates and energy users of in many forms, and energy aggregation has emerged as another “tool in the toolbox” to achieve that renewable energy objective.
Caroline Mead is associate director of origination with EDF Renewables. Caroline focuses on working with customers in the regulated, unregulated and corporate markets to supply renewable energy under long-term power transactions for a pipeline of wind, solar and battery storage projects. Caroline brings over a decade of experience in the renewable energy industry working for several renewable IPPs and executing over 750MW of projects in her career. Caroline earned her Bachelor’s degree in Political Science & International Business from William Jewell College in Liberty, Missouri. Caroline and her family live in the North Shore of Chicago.
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