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Renewables Aggregation Model Scores First Big Test

Tina Casey headshotWords by Tina Casey
Energy & Environment
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Major U.S. companies have been snapping up solar and wind power projects at a rapid clip. The pace could pick up even more if a unique renewable energy aggregation deal between Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday carries out as planned. The first-of-its-kind arrangement enables multiple companies to piggyback on the same deal for utility-scale wind and solar.

Five is better than one

If you’re wondering why all the big fuss over yet another renewable energy deal by leading companies, that’s a good question.

Utility-scale wind and solar deals are no longer big news when an individual company is doing the wheeling and dealing. It has become commonplace for companies with high energy requirements to claim large amounts of clean electricity from major new clean power projects. In particular, high-demand companies in the data and communications fields —  AT&T, Facebook and Google, for example — have been turning to renewable energy for reliability and price stability in addition to the environmental benefits.

The problem is how to incentivize renewable energy for businesses that have a relatively low demand profile and lack the deal-making leverage and resources commanded by high-demand stakeholders.

One alternative is to install rooftop solar panels and other onsite renewables, but many companies don’t have that opportunity. In any case, businesses with onsite wind or solar often need to supplement their onsite output with offsite energy purchases.

Collectively, then, these low-demand businesses represent an important opportunity to grow the demand for utility-scale renewable energy projects.

That’s where the new renewable energy aggregation partnership comes in.

Under the name “Corporate Renewable Energy Aggregation Group,” five global companies — Bloomberg, Cox, Gap, Salesforce and Workday — have joined together to claim 42.5 megawatts from a 100-megawatt solar farm in North Carolina.

Bloomberg explains the motive:

“…This group of companies, coming together as the 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 arrangement is a win-win for the developer, too. With an anchor tenant in hand, the developer can make a stronger case for other prospective purchasers to jump on board.

Think globally, act locally

The involvement of five U.S. companies with a global reach is a key aspect of the new partnership.

The participating companies expect the aggregation model to provide a gateway for smaller-demand companies to push the market for large offsite clean energy projects.

If the model proves transferrable, that would save other companies a considerable amount of time and effort, including legal expenses related to negotiations.

According to Bloomberg, the five companies began collaborating on the aggregation concept in 2017, with support from the Business Council on Climate Change and Rocky Mountain Institute’s Business Renewables Center.

The company LevelTen Energy was also involved. LevelTen specializes in renewable energy aggregation, deploying its proprietary “Dynamic Matching Engine” platform to tailor deals for buyers and sellers. The company says it currently has almost 1,600 projects within its portfolio.

Renewable energy development: you ain’t seen nothing yet

The solar project developer is BayWa r.e. Solar Projects, LLC, and it also foresees the aggregation model sparking a new wave of large-scale renewable energy projects.

BayWa r.e. CEO Jam Attari explains:

“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.”

BayWa r.e. is not waiting around to see who else picks up on the aggregation idea. The company already announced a total of 350 megawatts in solar projects for North Carolina and Virginia, with the first coming online in 2017 and 2018.

In another interesting twist on the collaboration angle, BayWa r.e. has partnered on the 350-megawatt solar development plan with the North Carolina company Geenex, which specializes in streamlining the development of utility-scale solar projects.

Through BayWa r.e., the impact of the new arrangement could also extend beyond solar and into other renewable energy projects. The company also specializes in wind power and bioenergy.

It’s also worth noting that BayWa r.e. is a global company with an impact that reaches far beyond the U.S. It comes under the umbrella of the trading and logistics company BayWa, which is headquartered in Germany.

All this is by way of saying that the renewable energy field is poised for even more rapid acceleration, as leading stakeholders develop sophisticated new models for partnerships.

Image credit: Beyond Coal & Gas/Flickr

Tina Casey headshotTina Casey

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.

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