When Considering Offsite Renewables Find a Trusted Energy Advisor
I read a recent article by Scott Wentzell, a project manager for EDF Climate Corps, about how a holistic energy management program can drive greater business value. Much of what Scott said in his article I agreed with, but there was one glaring component of a truly holistic energy management system that was missing — offsite renewables.
The Importance of Offsite Renewables
Tyically when we think of offsite renewable energy we think of wind or solar, but other sources of renewable energy such as biomass, landfill gas and hydro also can be part of an offsite renewable energy program depending on where a company is located.
Large energy users are increasingly looking to offsite renewable projects to complement their energy management program. A growing number of leading C&I companies are purchasing offsite renewable energy as a way of helping them control energy costs and improve the environmental performance of their operations. Adding offsite renewables to a company’s energy portfolio allows it to gain medium- and long-term fixed pricing on their electricity and is the best way for them to achieve the scale needed to achieve their corporate sustainability goals. Forward-looking companies such as Microsoft and Proctor & Gamble have signed Power Purchase Agreements (PPA) with developers of large-scale renewable energy projects and are already achieving these kinds of benefits — supporting their sustainability goals and making their energy costs more predictable into the future.
The right renewable energy PPA can help the buyer meet these objectives. The wrong choice can be a disaster that unnecessarily increases risk for the buyer, costs potentially millions of dollars and tarnishes their reputation (as well as their botton line).
A Trusted Energy Advisor Can Help
Navigating the complications and nuances of securing a PPA for offsite renewable energy is not easy. Most companies are just not equipped to handle the myriad details that go into ensuring their PPA will achieve the technical and economic benefits the company hoped it would and are turning to a trusted energy advisor to help them through the process. For example at Edison Energy/Altenex, we have developed an energy pricing model that leverages numerous leading 3rd party forecasts and actively tracks over 30,000 energy pricing nodes throughout the U.S., dynamically adjusting to reflect actual client load. This gives us incredible pricing insights when working with our clients. It is highly unlikely that any single company will be willing to devote the man hours and money required to developing such a data-driven pricing model. Nor should they. More often than not, a company should rely on a trusted energy advisor to help them through the process to ensure they end up with a PPA that serves their needs — rather than the developers.
The growth and adoption of offsite renewables as part of a comprehensive energy management program is evident in how new electricity generating capacity is changing. According to SEIA (the Solar Energy Industry Association), solar accounted for 30% and wind accounted for 39% of all new electricity generating capacity brought on-line in 2015. Natural gas accounted for 29% of new electricity generating capacity in 2015. SEIA estimates that approximately 14.5 GW of new solar PV installations will come on-line in 2016 and of those, 75% (10.9 GW) will be utility-scale projects.
Scott is right — an energy management program often begins with energy efficiency. We believe that any holistic energy management program also needs to explicitly evaluate the potential of offsite renewables as well.
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