Five major commercial companies collectively buy in to 100-MW North Carolina solar project

BloombergCox EnterprisesGap Inc.Salesforce and Workday, with guidance from LevelTen Energy and its renewable energy procurement platform, closed 42.5 MW of a 100-MW North Carolina solar project by global renewable energy developer, service provider and wholesaler BayWa r.e. This group of companies, coming together as the Corporate Renewable Energy Aggregation Group, is 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 five members of the group, with support from the Business Council on Climate Change (BC3) and the Business Renewables Center (BRC), began collaborating in late 2017. Many potential renewable energy purchasers have historically been faced with a key problem: businesses looking to procure smaller energy loads have been unable to contract directly with large offsite renewable energy projects due to limited energy demand. This has so far restricted business’s ability to catalyze the development of new renewable energy projects. To solve this problem, the group evaluated several 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. This helped 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 group hopes other buyers see this structure as a viable way to enter the large offsite renewable energy market, helping to accelerate corporate procurement of clean energy and expand renewables deployment in the United States.

Comments on the news:

  • “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.”
  • “Cox is no stranger to the renewable energy space,” said Steve Bradley, Assistant Vice President Environmental Sustainability at Cox Enterprises. “We’ve already invested millions of dollars and resources into our goal of being carbon neutral by 2044. This partnership is an opportunity for us to take what we’ve already been building to the next level by joining forces with other companies who share our vision for a cleaner, more sustainable planet. This is an exciting venture because by coming together, we are creating the blueprint for companies to come.”
  • “Gap Inc.’s share of the project will be used to offset the energy footprint of all Athleta stores and operations,” said Chris Samway, Senior Vice President & CFO of Athleta, a B Corp certified subsidiary of Gap Inc. “Through innovation and collaboration across industries, business can do more to create a healthier future for our people and our planet.”
  • “At Salesforce, we are committed to taking a leadership role in the fight against climate change and ensuring a just transition to a low-carbon economy,” said Patrick Flynn, Vice President of Sustainability. “This collaboration is not only an important step toward advancing Salesforce’s commitment to reaching 100% renewable energy by 2022, but is an innovative approach that demonstrates a company of any size can play an essential role in transitioning our planet toward a clean energy future.”
  • “We believe that every business should be an active and committed participant in supporting the adoption of renewable energy,” said Carrie Varoquiers, Vice President, Global Impact at Workday, and President of the Workday Foundation. “This project is a great example of the impact companies can make through strategic partnerships, and it aligns with our commitment to provide Workday customers with a carbon-neutral cloud globally.”
  • “BayWa r.e. is excited to be partnering with Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday to support their sustainability and carbon reduction goals. This is truly a milestone in corporate energy procurement. We greatly admire the collaborative Corporate Renewable Energy Aggregation Group for rethinking how companies of all sizes can access cost-competitive clean energy; this model can be replicated for companies for years to come,” said Jam Attari, Chief Executive Officer, BayWa r.e. Solar Projects, LLC. “For BayWa r.e. this novel deal is not only the right new model for corporate energy procurement, but an example of our commitment to a significant, strategic investment in key markets to support the growing demand for renewable energy by corporations in the Americas.”

The deal was coordinated by LevelTen Energy, which aggregates both buyers and sellers across national and regional renewable energy portfolios. Through the LevelTen Energy renewable energy procurement platform, buyers and sellers provide dozens of key criteria related to their purchase needs and project specifics, triggering LevelTen’s proprietary Dynamic Matching Engine to process this information in real time to create the ideal aggregation options for all parties. The LevelTen Energy platform processes more than 8 million data points across nearly 1,600 projects on a daily basis to help all energy buyers evaluate value, risk and other critical criteria required to properly pursue renewable energy procurement opportunities.

“Five buyers coming together to procure near equal slices from this project is yet another critical milestone in the expansion of the renewable energy procurement market,” said Bryce Smith, Chief Executive Officer of LevelTen Energy. “Historically, a lack of transparency, high costs and little flexibility meant only a select group of Fortune 500 buyers with immense resources could participate in this type of transaction. Kudos to these buyers for their vision and commitment toward not only impacting their own carbon goals, but also toward paving the way for many others.”

News item from LevelTen

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