Once a novel idea, pioneers with smaller electric loads and from various sectors have shown that through aggregation, renewable energy procurement is something that, no matter your size, you can participate in and benefit from.
Your organization is not too small. Partner with others on your renewable energy purchase.
Corporate and institutional electricity buyers in the U.S. are increasingly purchasing renewable energy directly from solar or wind farms. Institutions as diverse as Google, Lockheed Martin, Michigan State University and Kaiser Permanente have the capacity and demand to pursue a large-scale renewable energy solution as a single entity.
Other small to mid-size organizations may think, however, that low-cost green energy options are only accessible to the largest of organizations. While scale is key to getting the best deal and making the biggest impact, aggregating your demand with another party can get even a small or decentralized organization the economic value that Google has captured through its renewable energy purchases.
So why should you aggregate and how can you, as a smaller entity, unlock the benefits of aggregation?
Given economies of scale, the most attractive prices in a power purchase agreement (PPA) and the best partners (developers, financiers etc.) are retained on large-scale projects. As such, it is challenging to find cost-competitive solutions that cover loads smaller than 10 megawatts (MW) and often the best deals are to be had at even higher capacity, in the 20-60+ MW range. As a result, smaller PPAs will be relatively pricy and often carry some amount of counterparty risk.
So, if your operations are not large enough to use the output of an entire large-scale renewable project, or if you only want to offset a small portion of your load, you may want to consider aggregating your load with others. Finding other facilities interested in switching to renewable energy will play a crucial role in allowing your organization access to numerous benefits of large scale renewable energy, including risk mitigation against future price volatility and increases.
With others in your purchasing group, you can create demand for a larger project and harness value that you may otherwise not have been able to access alone.
Once a novel idea, pioneers with smaller electric loads and from various sectors have shown that aggregation is something that, no matter your size, you can participate in and benefit from. CustomerFirst Renewables has worked with pioneers such as
- American University (approx. 13 MW – higher education)
- Boston Medical Center (15 MW – healthcare)
- The George Washington Hospital (approx. 4 MW – healthcare)
- Post Office Square Redevelopment Corporation (1 MW – real estate)
None of these organizations in and by themselves would have been able to achieve pricing and deal structure normally reserved for a Fortune 500 company.
Moreover, collective purchasing power allows new emissions-free generating capacity to be added to the U.S. power grid and clean our power supply, while advancing each participating organization’s respective sustainability goals.
There is strength in numbers. George Washington University, one of the key participants in the DC-based Capital Partners Solar Project, spoke at the ACCO East conference about aggregation and the power of a team to get the procurement done.
“We knew we could hold each other accountable and support each other through the process.”
The idea of pooling resources to increase bargaining power is not new. But it is being newly applied to large renewable energy purchases. Now, no matter your size, location, or type, you can harness the benefits of a large scale renewable energy solution.
CustomerFirst Renewables facilitated multiple aggregation deals, including the largest aggregation deal involving diverse participants in the country, announced in October 2016. MIT, Boston Medical Center, and Post Office Square Redevelopment Corporation formed an alliance to buy electricity from a new, roughly 650-acre, 60-megawatt solar farm on farmland in North Carolina. Called Summit Farms it will be largest renewable-energy project ever built in the U.S. through such an alliance and is expected to be completed and to begin delivering power into the grid in February 2017. This project demonstrates a partnership model for other organizations to follow in climate-change mitigation efforts, reducing electricity spending and mitigating energy price risk.
If you are interested in learning more, please contact us.