The 87-turbine facility was fully operational earlier this week, and the 200-megawatt facility is expected to produce enough energy to power 50,000 homes. The agreement however does not give Walmart responsibility for installing, operating, or maintaining the wind farm.
Walmart is using its scale and buying power to increase the deployment of clean energy projects by agreeing to purchase wind power over the long-term. PPAs make it easier for the project to secure low-cost financing, as there is a guaranteed buyer for the power once the project is operational, thus lowering the cost of the generated power. This is a win-win arrangement, as it lowers the business risk of the project and Walmart can secure energy at a lower cost.
Traditionally, Walmart preferred shorter term power purchase agreements, but this didn't help renewable energy projects secure low-cost financing. "Prior to 2006, the renewable energy industry sought 20-25 year PPAs, while Walmart was accustomed to buying power in 1-year or less contracts," states Walmart's Approach to Renewable Energy. "Walmart worked to bring the two perspectives closer together. Through information and education, Walmart has become comfortable with longer contracts, and helped renewable developers secure financing for much shorter contract lengths."
This PPA with is a big step for Walmart realizing its goal started in 2005 of using 100 percent renewable energy. For a company with revenue of $485.7 billion in revenue in 2014 and 11,000 stores in 27 countries, this is no small feat. Currently, 26 percent of the company's power comes from renewable sources.
“Walmart has a goal to be supplied by 100 percent renewable energy, and sourcing from wind energy projects — like the Logan’s Gap Wind facility — is a core component in the mix,” said Mark Vanderhelm, vice president of energy for Walmart. “The energy we’ll procure from this facility represents nearly one-fifth of the U.S. portion of our goal to source seven billion kilowatt hours of renewable energy by 2020. That’s a significant leap forward on our renewable energy journey.”
While some companies have reached goals of using 100 percent renewable energy more rapidly, Walmart has taken a more gradual approach, due to scale and cost concerns. Energy efficiency initiatives are also an important component of reaching this goal, as it will reduce overall energy use.
"After assessing all of these options, we have determined an approach to renewable energy that best leverages our scale and buying power to drive new renewable projects, while demonstrating that doing what’s right for our future doesn’t have to cost more today," states Walmart's Approach to Renewable Energy.
Although the power rate has not been disclosed, a spokesman said the price is at or below utility prices. This is a major component of Walmart's overall goal in sourcing 100 percent renewable power, as it seeks cost-effective, stable renewable energy sources. As a company that takes pride in offering low prices and procuring inventory at a low cost, this is an extension of the Walmart brand.
Walmart was one of nine major companies to announce during Climate Week NYC 2015 it was joining the RE100, pledging to source 100% of its power from renewable sources. This pledge was created to engage influential companies as global leaders in clean energy deployment, and the completion of the Logan's Gap Wind project signals a major milestone for Walmart.
Sarah Lozanova is a green copywriter and communications professional specializing in renewable energy and clean technology. She is a consultant for Sustainable Solutions Group and a regular contributor to environmental and energy publications and websites, including Mother Earth Living, Home Power, Earth911, and Green Builder. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and she resides in Belfast Cohousing & Ecovillage in Midcoast Maine.