Strategic Intelligence: Deep Dive into Renewable Energy Procurement

Strategic Intelligence: Deep Dive into Renewable Energy Procurement

Summary

This report looks at the different procurement methods companies can use when adopting renewable energy. Over 400 of the world’s largest companies have committed to transition fully to renewable electricity, with 278 of these aiming to achieve their target on or before 2030. There are multiple ways companies can buy renewable energy. Each comes with its own challenges, and some can leave corporate buyers open to accusations of greenwashing.

Key Highlights

• On-site generation is the most robust procurement method but has extremely high upfront costs. On-site generation refers to producing energy at the site where it will be consumed. This is an expensive procurement method, as it has high upfront and maintenance costs, but it guarantees 100% renewable energy (RE100) for a company’s facilities. This method is best suited for companies with a low number of facilities or large corporations with the capital to invest in new power plants.
• Power purchase agreements (PPAs) are becoming more popular. PPAs are long-term contracts between a clean electricity generator and a customer. PPAs may last up to 25 years, during which time the buyer purchases energy at a pre-negotiated price. High credit requirements make PPAs most appropriate for companies that can guarantee continuous energy demand over a long period of time. Supply contracts are the more suitable option for smaller enterprises without the opportunity for on-site generation.

• This report analyzes renewable energy procurement methods, including on-site renewable generation, power purchase agreements (PPAs), supply contracts, and energy attribute certificates (EACs).It also evaluates the main challenges to renewable energy procurement, including oversupply, price pressures, and skyrocketing demand.

• Understand why companies need to adopt renewable energy. Access the different methods of renewable energy procurement. Identify which energy procurement method is most appropriate for your company.