LevelTen Energy, together with Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday, Forge New Path to Corporate Renewable Energy Procurement
January 17, 2019
Five global brands sign agreements to purchase 42.5 megawatts of solar power, creating a new blueprint for renewable energy aggregation
Five LevelTen Energy customers – Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday – are at the forefront of a monumental change in the renewable energy market. By aggregating 42.5 megawatts of renewable energy demand, the companies acted as an anchor tenant for a 100-megawatt solar project, enabling the developer, BayWa r.e., to accelerate its development.
The deal signals a shift in corporate renewable energy procurement. Historically, a project developer waited for a single corporation or utility to purchase the vast majority of a project’s output. Then, perhaps, the developer would sell the few remaining megawatt-hours to a smaller company. Because these secondary purchase opportunities were few and far between, most smaller companies were unable to procure renewable energy, or they spent an inordinate amount of time and effort seeking a project that could meet their needs.
Working together, these five companies – known as the Corporate Renewable Energy Aggregation Group – pooled demand to achieve their individual renewable energy goals, efficiently and economically. In the process, the collective uncovered a number of best practices, lessons the group plans to share with the broader renewable energy community in the coming months.
A few insights are worth mentioning here: First, the group leveraged a uniform virtual power purchase agreement (VPPA), creating a significantly streamlined legal review process. Second, they hired a single, shared legal counsel (Couch White, LLP) to negotiate the transaction, expediting the frequently grueling final phase of deal execution. The simplified transaction approach allowed the buyers to procure relatively small slices of BayWa’s solar project, with minimal transaction costs. The unprecedented coordination between five multinational businesses not only produced better economic outcomes, but, more importantly, paves the way for other companies to procure renewable energy cooperatively, maximizing value and reducing risk.
LevelTen played a pivotal role in the creation and execution of this model. We gathered vital data on each company’s VPPA preferences, fleshing out key risk, value, and locational requirements, and used our new Dynamic Matching Engine to compare these preferences to every project in the LevelTen Marketplace. This process required intense data processing: the LevelTen Marketplace curates millions of data points on nearly every renewable project under development in the United States. The analysis generated a short list of projects that met the group’s specific needs. Once the group selected a project, LevelTen guided the parties through contract negotiations, helping each buyer to execute a professional and thoroughly vetted VPPA.
This deal is just one example of how companies are using the LevelTen platform to achieve renewable energy goals. LevelTen’s technology can aggregate multiple buyers, as it did in this case. Companies also use the LevelTen platform to identify projects that have an existing anchor tenant, but also have smaller slices of power available for sale. LevelTen facilitates supply side aggregation, too, allowing a company to purchase slices of power from more than one project. These custom portfolios diversify risk and can better match a company’s load profile.
The aggregation of renewable energy buyers and sellers will enable more small and midsized companies to enter the market, greatly increasing the demand for clean power. It’s an exciting shift that supports a more rapid clean energy transition.
Read on to hear more from each company involved in the deal announced today.
“The process of buying renewable energy through a PPA can be difficult and time-consuming, especially for buyers seeking smaller energy loads. Combining our resources as a single group of buyers has enabled us to scale our impact,” said Michael Barry, Head of Sustainable Business Operations at Bloomberg. “This transaction is a great example of a group sharing best practices, working together and showing the benefit that cross-firm collaboration can have. It also serves as an example to developers that a market exists for these types of projects.”
“Cox is no stranger to the renewable energy space,” said Steve Bradley, Assistant Vice President Environmental Sustainability at Cox Enterprises. “We’ve already invested millions of dollars and resources into our goal of being carbon neutral by 2044. This partnership is an opportunity for us to take what we’ve already been building to the next level by joining forces with other companies who share our vision for a cleaner, more sustainable planet. This is an exciting venture because by coming together, we are creating the blueprint for companies to come.”
“Gap Inc.’s share of the project will be used to offset the energy footprint of all Athleta stores and operations,” said Chris Samway, Senior Vice President & CFO of Athleta, a B Corp certified subsidiary of Gap Inc. “Through innovation and collaboration across industries, business can do more to create a healthier future for our people and our planet.”
“At Salesforce, we are committed to taking a leadership role in the fight against climate change and ensuring a just transition to a low-carbon economy,” said Patrick Flynn, Vice President of Sustainability. “This collaboration is not only an important step toward advancing Salesforce’s commitment to reaching 100 percent renewable energy by 2022, but is an innovative approach that demonstrates a company of any size can play an essential role in transitioning our planet toward a clean energy future.”
“We believe that every business should be an active and committed participant in supporting the adoption of renewable energy,” said Carrie Varoquiers, Vice President, Global Impact at Workday, and President of the Workday Foundation. “This project is a great example of the impact companies can make through strategic partnerships, and it aligns with our commitment to provide Workday customers with a carbon-neutral cloud globally.”
“BayWa r.e. is excited to be partnering with Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday to support their sustainability and carbon reduction goals. This is truly a milestone in corporate energy procurement. We greatly admire the collaborative Corporate Renewable Energy Aggregation Group for rethinking how companies of all sizes can access cost-competitive clean energy; this model can be replicated for companies for years to come,” said Jam Attari, Chief Executive Officer, BayWa r.e. Solar Projects, LLC. “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.”
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