Greentech Media: Starbucks Buys Aggregated Wind and Solar Portfolio With Help From LevelTen

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Greentech Media: Starbucks Buys Aggregated Wind and Solar Portfolio With Help From LevelTen

June 05, 2019

Greentech Media spoke with LevelTen CEO Bryce Smith about the portfolio that LevelTen created for Starbucks, and why Starbucks chose this approach. Below are excerpts from the article:

Starbucks announced another large-scale renewables deal Wednesday, with enough power to supply 3,000 of its U.S. stores. The portfolio, encompassing 146 megawatts of wind and solar, draws from three different plants located in three states.

LevelTen Energy, the renewable energy marketplace that brokered the deal, said the transaction’s portfolio approach is a first in the industry.

“Starbucks is setting an important precedent in the corporate energy procurement space by demonstrating how a single offtaker can safely and easily procure shares of renewable energy from a variety of new wind and solar projects,” said Bryce Smith, LevelTen’s CEO, in a statement.

Rather than signing on to several projects with a single developer — as Starbucks did in April, contracting for a total of 70-megawatts from eight Cypress Creek Renewablesprojects — the LevelTen portfolio includes three projects from different developers, located in different regions.

“They obviously thought long and hard about how to structure energy procurement for not just one region or one data center, but for thousands of locations. […] From that standpoint, it’s pretty unique,” Smith said.

…“Buying renewable energy from multiple projects across the U.S. reflects how we use electricity across our store portfolio,” said Patrick Leonard, Starbucks’ energy manager, in an email to Greentech Media. “Starbucks’ analysis showed a significant reduction in value at risk from the portfolio approach vs. sourcing from any one of the projects in the portfolio,” Leonard said. “Inherently, diversity of technology (wind, solar), location [independent system operator], and developer should all result in a better balance of risks than picking a single project.”

…In the past, technology companies with huge electricity demands, such as Google and Facebook, have dominated corporate renewables deals.

But Leonard said Starbucks’ transaction model “opens the door for many new buyers to cost-effectively source smaller amounts of renewable energy.”

In a recent interview, LevelTen’s Smith told Greentech Media that his company’s marketplace aims to open up the renewables market to different types of corporate buyers by offering more ways for them to engage with renewable energy. That includes aggregation deals.

“Buyers are open to aggregation,” he said. “But the details of that have to be solved for them. We allow buyers to buy [power-purchase agreements] from individual assets, but we also aggregate buyers using software and data science, where they don’t have to identify other like buyers.”

LevelTen said the Starbucks deal used its Dynamic Matching Engine software, which analyzes renewables projects in development and helps corporates choose projects, or portions of projects, that work for them. In January, LevelTen announced an aggregated deal involving Bloomberg, Gap and others. Each offtaker contracted for between 5 and 10 megawatts of a total 42.5-megawatt solar deal.

To read the full article, visit GreentechMedia.com.