Power & renewables deals

The Business Renewables Center, a member-based Rocky Mountain Institute initiative, actively tracks new corporate renewable energy contracts as they are announced. All the corporate deals tracked so far have been wind and solar, except for one biomass project in Last year, 31 renewable energy contracts added up to a 2. In through December 13 , there were 73 contracts that totaled 6. Kevin Haley, program manager at the Business Renewables Center, told Energy Manager Today that there are three main reasons for the increase in renewable deals and total capacity this year: sustainability goals, standardized procurement process, and deal economics.

Based on the current BRC Deal Tracker, here are the corporations that made some of the biggest deals:. The BRC found that the social media giant signed 20 renewable contracts totaling 1, From until the time of that announcement, the company says it had signed contracts for over 3 gigawatts of new solar and wind energy.

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In February, the telecommunications company inked deals to purchase megawatts of wind power from two NextEra Energy Resources subsidiaries. That massive procurement was followed by another contract with NextEra in June for an additional MW of wind energy from two new wind farm projects in Texas. Walmart also ranked near the top with MW.

The company plans to reach that goal through a combination of renewable energy sourcing and operational efficiencies. Please note that your account has not been verified - unverified account will be deleted 48 hours after initial registration. Click anywhere on the bar, to resend verification email. KPMG Personalization. Get the latest KPMG thought leadership directly to your individual personalized dashboard.

A record year for big corporates buying renewable energy to run their operations

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In return, it charges a risk-management price, an insurance premium price and the PPA price, but that total price is often below market prices for more expensive fossil fuel-generated power. There were a record 4. PPAs were initially designed as contracts "between electric utilities and independent power producers IPPs for fossil fuel-powered projects," according to Microsoft legal consultant group Orrick.

Earlier this decade, as PPAs were expanded for use in corporate-IPP deals, it became clear that their treatment of risk needed to be rethought. A set of legal tools were included in the Orrick-configured Proxy Generation PPA concept designed to account for renewables' uncertainties and risks, including the VFA. It is "true but simplified" that a PPA locks in a long-term price for a renewables project, Taylor added. That creates volume risk, which is the aggregate uncertainty of generation, and shape risk, which is the uncertainty of generation from one time period to another.

Together, they cause prices to vary in difficult-to-predict ways. The PPA partially reduces risk, Taylor said.

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A corporate buyer pays the same for each MWh of the PPA, but the amount it buys from the market to fill in the gaps, and the prices it pays, vary. Some conditions make variability advantageous to the buyer, and others increase its power costs. For example, Texas wind and California solar are less valuable than the simple average value when production falls and prices spike, and more valuable when production rises and prices drop, he said.

Power of partnership

For renewable energy deals to grow beyond large corporate buyers, dealing with this risk must be simplified. The VFA increases the total cost, but solidifies the price and transfers risk management to a third party. The first three applications of the PPA-VFA structure, on three existing wind projects, is the culmination of a long collaboration by Davies and Taylor.

Microsoft is the off-taker.

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But, he added, the VFA can be a solution for getting regulatory approval for specially designed green tariffs. A utility can use a PPA-plus-VFA product from the market with a clear, specific cost to build the green tariff , he said, and can then " charge its corporate customer based on that block of renewables, without using assets procured for all customers.



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