A Buyers Roadmap: Pushing Corporate Renewables to New Heights
With the launch of a new Buyers Roadmap, the Business Renewables Center is making corporate education on renewable energy easier than ever
This blog post is part of a series from RMI’s Business Renewables Center (BRC), which streamlines and accelerates corporate purchasing of off-site, large-scale renewable energy.
2017 has once again been a banner year for the corporate renewable energy market. With Kimberly Clark and General Motors recently announcing that they have each signed two large wind deals, the market for corporate renewable energy has broken 2 gigawatts this year alone, and already surpassed 2016 totals.
But we’re not about to confuse progress with success. It’s clear that to reach Rocky Mountain Institute’s goal of 60 GW of corporate renewables by 2030, there will need to be rapid scaling and more companies will need to transact.
The fact is, one of the biggest hurdles facing companies that want to turn their sustainability pledges into action is, simply, education. Bringing a staff lacking in energy expertise up to speed on the complexities of buying off-site renewables is not easy. That’s why RMI’s Business Renewables Center (BRC) is launching a Buyers Roadmap to standardize the transaction process and streamline education for buyers on the individual steps each company must undertake to buy wind or solar power today.
Introducing the Buyers Roadmap
The Buyers Roadmap was designed to help all market actors understand the process required for a nonutility buyer to procure renewable energy. With input from experienced buyers and consultants familiar with the process, the BRC organized a complete transaction process into nine standard stages, some with multiple substages. Furthermore, to help buyers take full advantage of the resources from the BRC, we organized a collection of primers and guides by stage, so buyers can easily access the information they need based upon the stage they are at in their journey toward a wind or solar power purchase agreement (PPA).
When users hover over the icon associated with each step of the transaction, they will see an overview of the action items and goals for each stage, as well as a summary of the relevant BRC resources. Clicking on each icon will take users to a deep dive for that stage, which details specific processes and best practices for tackling challenges like “obtaining internal approval” or “negotiating contract terms.” Some steps will have links to primers and guides on accounting, pitching the deal to your chief financial officer, building an internal dream team, and more. The Buyers Roadmap also incorporates tools such as the BRC’s request for proposal template and Market Analysis Platform.
In conversations with many corporate buyers, renewable energy developers, and project consultants, the BRC team heard a common theme: standardize this process. That’s exactly what we’ve tried to do with this educational product, and our goal is to get it in the hands of as many corporate energy teams as possible to increase the speed and volume of renewable energy deals.
Corporate Renewables: Not Just for the Goliaths
Why is a standardized Buyers Roadmap so important for corporate renewables right now? One reason is because of the growing range of buyers entering the market. For example, out of the 47 corporate buyers who have signed utility-scale, off-site renewable contracts since 2008, 13 of those buyers, or almost 30 percent, signed their first deal in 2017. Also, many of these new players are smaller than the early market pioneers like Google and Facebook. Scalable education via the Buyers Roadmap will open the off-site renewables market even further to a broader array of buyers.
In 2015, over 50 percent of the corporate renewable megawatts were in deals signed by a company in the information technology (IT) sector, whereas in 2017 thus far, IT companies account for less than 25 percent of market growth. One of the biggest differences between the IT companies and the newer, more diverse buyers is that the large energy users are typically already active in the wholesale power markets and more familiar with these types of energy transactions. Many of the smaller companies entering this space, however, have much smaller corporate social responsibility teams in charge of programs ranging from recycling to community service to these multimillion-dollar, 10-plus-year-long power contracts.
Not only does the staff at these companies need to educate themselves on the fundamentals of wholesale electricity markets and what a power purchase agreement entails, but they also need to win internal approval and educate their superiors within the company in order to sign a renewable energy deal.
Getting to the Next Level on Buyer Education
During the 2017 Renewable Energy Buyers Alliance Summit, numerous breakout sessions on “Building the Internal Business Case” focused on the common issues that buyers face internally, and how the nonprofit community can help them better prepare for the deal approval process. A common theme throughout these sessions, for both buyers and developers, was the need for a better understanding of the process or timeline for corporate renewable energy transactions. The buyers’ internal approvals process is often a black box and can take anywhere from several months to upward of a year. The BRC wants to help streamline this process and reduce the amount of time it takes to close a renewable energy deal.
Through the Buyers Roadmap, corporate energy teams can access online materials to speed their knowledge of corporate power purchase agreements and identify hurdles early on in the transaction process. Prior to this tool’s creation, education had to happen organically or on a time-consuming team-by-team basis. The BRC hopes that as more companies increase their familiarity with the issues, more deals will happen—more quickly and with better long-term, economic results for buyers.