GreenBiz: What Makes Starbuck’s Latest Clean Energy Transaction Unique

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GreenBiz: What Makes Starbuck’s Latest Clean Energy Transaction Unique

June 09, 2019

In a feature story about LevelTen Energy’s latest deal with Starbucks, GreenBiz explains how LevelTen’s portfolio approach to PPAs can minimize risk to corporate offtakers. Below are excerpts from the article:

As more companies set — and approach — 100 percent clean energy targets, the range of renewable energy procurement methods available to corporate offtakers is maturing.

This week, LevelTen Energy, a renewable energy procurement platform, announced the close of a three-project renewable energy portfolio purchased by Starbucks, with a collective capacity of 146 megawatts. The deal provides another example of how corporations with renewable energy goals are developing more options for clean energy procurement.

Starbucks is simultaneously procuring a portion of the clean energy generated by the projects, in North Carolina, Oklahoma and Texas, through three power purchase agreements (PPA). The deal involves 50 megawatts of wind power from an ALLETE Clean Energy, 50 MW of solar power from a Cypress Creek Renewables, and 46 MW of solar from a BayWa r.e. Project. Starbucks is sourcing less than 50 percent of the renewable energy the projects will generate. The rest of the energy will be available for other corporate buyers to purchase, meaning the deal could serve to streamline other companies’ procurement of clean energy.

…The deal is the first in which a single corporate energy offtaker is aggregating the supply of clean energy across multiple projects, according to LevelTen. The model minimizes risk for the offtaker by diversifying the energy portfolio — “much like a mutual fund,” according to the company’s statement — and allows Starbucks to benefit from economies of scale while locating energy generation closer to the stores the energy will serve.

“Buying renewable energy from multiple projects across the U.S. reflects how we use electricity across our store portfolio,” said Patrick Leonard, energy manager for Starbucks stores in the United States and Canada, in an email. “Inherently, diversity of technology, location and developer should all result in a better balance of risks than picking a single project.”

…”The PPA remains the most scalable way to source renewable energy but many companies struggle to justify taking a long-term commitment to energy markets,” Leonard said. “Having the opportunity to buy renewable energy from a very streamlined process like the LevelTen portfolios… opens the market for us all to make meaningful progress towards reduced carbon emissions.”

…LevelTen’s software products analyze data on utility-scale clean energy projects, which enables corporate buyers to find and evaluate the value and risk of renewable procurements.

“LevelTen continues to provide valuable niche services to C&I customers by leveraging their innovative software platform,” said the Renewable Energy Buyers Alliance (REBA) in an emailed statement. LevelTen is one of REBA’s founding members. “Today’s announcement with Starbucks further demonstrates its ability to create new business models and could enable smaller companies to enter the clean energy market by simplifying the contracting process.”

To read the full article, visit GreenBiz.com.