Standardizing on a Renewable Energy Purchase Agreement
Today Altenex and Edison Energy took a bold step on behalf of their customers and the renewable energy industry and released their Renewable Energy Purchase Agreement (REPA) into the public domain. More and more companies are sourcing offsite renewable energy to lower their energy costs and achieve their sustainability goals, but many potential buyers are wary of the potential risks incumbent in a long term power purchase agreement. Helping them understand, quantify and manage those risks is critical to supporting the growth of offsite renewable projects. To support this goal, the release of the Altenex REPA is important in a number of ways.
First, the Altenex REPA pushes a fragmented industry towards more open standards. In many industries, adopting open standards increases the rate of innovation and the speed of development and adoption. Think the API economy.
Second, it allows the renewables industry to begin the slow movement toward a standardized contract across projects. The standardization in home mortgage documentation provides transparency about the agreement and provides liquidity of the asset to the funder. Altenex’s release helps move the renewable energy industry in a similar direction.
Third, the Altenex REPA will accelerate the adoption of offsite renewables among commercial, industrial and institutional energy users. The REPA includes significant protections and risk management for renewable energy buyers. As the renewables market continues to accelerate, many potential buyers are concerned about the risks incumbent in a long term power purchase agreement. Helping them understand, quantify and manage those risks is an important step in raising the confidence of a buyer to know that their interests will be protected over the length of the agreement and that any contract they execute will meet the financing requirements of the capital markets, ensuring construction, delivery and commercial operation.
The Altenex REPA has been used by Fortune 1000 companies, universities and municipalities to procure over one gigawatt of offsite renewable energy across the United States.
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