Renewable Energy Project Tracker
Why Large-Scale Renewable Energy?
Large-scale renewable energy solutions are a powerful tool that organizations can employ to meet their sustainability and emissions reductions goals.
Typically, onsite renewables and efficiency upgrades only meet 10-15% of an organization’s annual electric demand. While these measures are worth pursuing, procuring large-scale renewable energy is the most cost-effective and scalable means of decarbonizing an organization’s energy supply.
The most common contracting pathway for large-scale renewable energy is the Power Purchase Agreement (PPA). Under a PPA, an offtaker agrees to pay a fixed amount for the electricity a project generates for over a long-term contract (between 10-25 years). No upfront capital outlay is required. The output from the project is sold into the wholesale market and the project’s offtaker keeps all the revenue, while maintaining its existing grid power contract with the local Retail Electricity Supplier (RES) or utility.
Large-scale renewable energy revenue offsets some components of traditional grid power costs, and in some cases can often be integrated directly onto an offtakers’ existing bill. If a project produces energy at the same time the offtaker is using it, transitioning from a fixed rate structure to one that is market based can compliment the PPA and reduce grid power costs even further.
In today’s market, unsubsidized utility-scale renewable electricity is generally on-par with or cheaper than electricity generated from fossil fuels. Corporate and Institutional buyers are taking advantage of these rapid cost declines and procuring large-scale renewable energy to meet their sustainability and carbon reduction goals, all while reducing their BAU electricity costs and reducing future price risk. 2018 was a record year for large-scale renewable energy procurement and CFR anticipates a steady increase as renewable energy continues to enter the mainstream.