Corporate Power Purchasing

Why Corporate Power Purchasing is Poised to be the Next Big Thing in Renewable Energy

Corporate Power PurchasingUtility-scale solar and wind power is the best source of cheap, large-scale renewable energy. If you’re just reading the 2015 headlines it can seem as though corporations are surging into that market. The first months of the year have seen a number of impressively large renewable-energy power purchase agreements (PPAs) signed by major corporations. General Motors signed one for 34 MW; Google, for 43 MW; Amazon, for 150 MW; and Apple, for 130 MW. “The Apple-First Solar deal in California was a renewable signal heard around the world,” says Lily Donge, a principal with RMI’s electricity practice and leader of the Business Renewables Center. “Then more recently, Kaiser Permanente signed 153 MW, and then Dow Chemical signed 200 MW—all in early 2015. We see the market growing in leaps and bounds.” So what’s the problem?

Success—so far—has been limited to a small number of very big players. “That growth is exciting and exactly what we want to see;” says Ian Kelly, a senior associate with RMI’s electricity practice. “What we haven’t seen though is a broadening of the market. The number of corporations that are doing these deals as a way to source renewable energy hasn’t increased in the way you might expect, given the way the market has started to take off.” Corporate renewable energy procurement is significant—it totaled about 1 GW last year—but it could and should be much larger. “We see less than two dozen of the Fortune 500 signing off-site PPAs,” says Donge. And RMI and its Business Renewables Center (BRC) is going to change that.

This week at the Bloomberg New Energy Finance (BNEF) Summit in New York, RMI Managing Director Hervé Touati is presenting about the BRC, the plan for which won RMI the prestigious FiRe award at last year’s summit. The BRC is a collaborative platform aimed at accelerating corporate renewable energy procurement. The BRC was announced in February of this year with 28 founding members and is set to revolutionize not only the way major corporations source renewable energy, but also the renewable energy market itself.

If the BRC can stimulate the corporate market for wind and solar power, it would completely change the face of the market. To almost double U.S. renewable capacity, Donge says, “requires roughly 60 GW of new renewable power.” Reaching the first 60 GW of installed capacity took many decades. Within the next 10–20 years, Kelly says, “our goal is to see 60 GW total of new installed solar and wind power capacity from off-site projects.”

Given the potential scale of corporate power purchases, it is within reach. For many large corporations, 100 MW of wind capacity represents about one quarter to one half of the power they require. If 600 companies purchased 100 MW of capacity each, the market would double. Just one company, Google, has already purchased wind power equivalent to 1.7 percent of the total capacity of the nation, and just four companies account for 2.5 percent of the total. The top ten Fortune 500 companies that report their purchases to the EPA buy nearly 11 TWh of green power per year, while the next ten (which include giants like Lockheed Martin and Citigroup) buy less than 14 percent of that amount. So few companies wielding such massive influence shows the enormous potential that could be unlocked. “As we get more companies doing these types of deals, it not only broadens the market but it causes the market to accelerate even more quickly,” says Kelly.

Even now, at a relatively undeveloped stage of the utility-scale wind and solar market, offsite renewable power is an attractive option for corporations. “Competitive power prices can be locked in for 20 years or more,” says Donge. Forgoing such favorable rates represents a large opportunity cost, even for the half of Fortune 500 companies that haven‘t committed to shifting to renewable power.

So what’s holding them back? First and foremost, many companies are simply not aware of the potential benefits, says Kelly. “Obviously the companies that are doing these deals are finding them to be pretty desirable, because they’re going back and doing those deals again, and again, and again,” he points out. The key for the BRC, he says, is to “show all of the companies that haven’t put their toe in the water yet that there’s a deal to be had on favorable terms—they can source renewable energy successfully and economically.”

Many barriers still exist for those that are aware of the benefits. These include the complexity of large-scale, off-site renewable transactions, high transaction costs, and a lack of necessary information and tools. Failure rates of potential deals are high: we estimate that there are five to ten failed attempts or significant delays for every successful deal. This slows market growth and evolution. “Our developers indicate there’s a lot of opportunity,” says Donge. And the RMI-convened BRC, in collaboration with industry, will directly work against those barriers to unlock that opportunity.

The founding members of the BRC are corporate renewable energy buyers, renewable energy project developers, and transaction service providers. Together with RMI, says Donge, “they represent a critical mass of market power and expertise.” The founding corporate buyers bring in more than $500 billion in revenue and consume more than 25,000 GWh of electricity annually. They include Bloomberg, eBay, GM, HP, Kaiser Permanente, Nestlé Waters North America, Owens Corning, Salesforce, and Sprint. By committing to share their experience in these complex deals, all the founding stakeholders of the BRC are opening up for public use the hard-earned expertise they gained by pioneering these transactions. By doing so they mean to drive the market forward and do much more than just help other companies replicate their success. As the market accelerates, all players will benefit from economies of scale and emergent solutions. “RMI’s role in all this is to move directly against the barriers to these complex and vital transactions, in concert with the BRC membership,” says Donge. By guiding corporate teams, helping them navigate the market and the steps of each deal, defining transactional standards, and exploring new market opportunities, RMI and BRC will serve as an accelerator and a catalyst, smoothing the path for all who follow. “We think we can help accelerate the deployment of wind and solar off-site capacity,” says Kelly. “Really we’re there to try to facilitate the different players in moving along that path.”

utility solar

California leads nation in solar installations as world sees 14% increase

utility solarCalifornia became the first state to generate more than 5% of its electricity from utility solar, according a new report from the U.S. Energy Information Administration (EIA).

California’s utility-scale (1 megawatt or larger) solar plants generated a record 9.9 million mega watt hours (MWh) of electricity in 2014, an increase of 6.1 million MWh from 2013. California’s utility-scale solar production in 2014 was more than three times the output of the next-highest state, Arizona, and more than all other states combined, according to the EIA.

Last year, several large solar power plants were phased into operation in the Golden State. Those plants include the Topaz and Desert Sunlight 550MW solar photovoltaic plants, the 377MW Ivanpah plant and the 250MW Genesis solar thermal plant. In total, nearly 1,900MW of new utility-scale solar capacity was added, bringing the state’s utility-scale capacity for all solar technologies to 5,400MW by the end of 2014 — enough new capacity to power more than 1.05 million typical households.


floating solar

Solar Power to develop floating photovoltaic projects

floating solarSolar Power Inc. said Thursday it signed a partnership to develop 50 megawatts of floating solar photovoltaic projects in California, three other states and Mexico.

Floating photovoltaic arrays are relatively new technology for irrigation ponds, reservoirs and water treatment plants. They are getting notice because they don’t take up valuable farmland or expensive real estate.

There are existing floating solar projects in Napa County, Japan and India, and many more are planned.

“Large-scale floating PV systems have increasingly shown their effectiveness in various settings, and this platform gives SPI a strong competitive advantage in this growing market segment,” Xiaofeng Peng, chairman of SPI, said in a news release. “This technology not only generates clean solar power energy, but also serves to conserve water in critically dry regions like the Southwestern U.S. and California in particular.”



Floating Solar Panel Project Due in 2016 from California Power Company

floating-solarSonoma County, Calif.’s new public electricity supplier is turning to the sun and water — the airspace over treated sewage ponds, specifically — to generate power for local homes and businesses.

Under a deal signed Thursday with a San Francisco-based renewable energy developer, officials with Sonoma Clean Power, now the default electricity provider in Sonoma County, unveiled a plan to install a 12.5-megawatt solar farm on floating docks atop holding ponds operated by the county Water Agency.

When completed in 2016, the project, which will provide enough electricity to power 3,000 homes, will be the largest solar installation in the county.

It also will help fulfill one of Sonoma Clean Power’s central goals — to develop local sources of renewable energy for its expanding customer base, now taking in more than 160,000 residential and commercial accounts across five cities in the county.



worlds largest solar plant

Sunny business: India to trump US with 750 megawatt solar power plant

worlds largest solar plant

The construction of the world’s largest solar power plant is underway in central India. When the 750-megawatt site starts operating in August, 2016, the project is set to overtake America’s 550-megawatt ‘Desert Sunlight’ in California.

The world’s largest solar power plant that will be generating 750MW of electricity had been recently commissioned in Rewa district of the Indian state of Madhya Pradesh, the Times of India reported on Monday.

Now, the 40-billion-rupee ($643 million) project is close to acquisition of 1,500 hectares of land, and by April government agencies are believed to start inviting tenders from developers. It is a joint venture of state-run PSU Urja Vikas Nigam with Solar Energy Corporation of India, and at least 20 percent of the energy generated by the plant will be used within the Madhya Pradesh state.

world’s largest PV plant

Launch of world’s largest PV plant drives home the pro-ITC message

world’s largest PV plant
Agua Caliente, one of the five projects that received support from the DOE’s loan guarantee program.

US interior secretary Sally Jewell yesterday flipped the switch on Desert Sunlight, the 550MW PV power plant built by First Solar that for a few months at least will be the world’s largest.

Jewell attended a ceremony at the Riverside County, California site, during which the vast project was officially inaugurated.

The US Department of Energy marked the occasion by publishing a report yesterday highlighting the key role played by its Loan Programs Office (LPO) in supporting the first wave of ultra-large utility-scale solar plants in the US.

Desert Sunlight is the last project to reach completion of a batch five plus-100MW utility PV plants that were supported by the LPO through a US$4.6 billion loan guarantee programme.

Steven Chu future of energy

Will Falling Oil Prices Kill Wind and Solar Power?

Steven Chu future of energy
Steven Chu, professor of physics and molecular and cellular physiology at Stanford University, and former Energy Secretary in the Obama administration.

SA Forum is an invited essay from experts on topical issues in science and technology.

SA Editor’s Note: As leaders from business, politics and science convene this week at the World Economic Forum conference in Davos, Switzerland, to discuss pressing matters of the day, Scientific American is publishing a series of interviews with leading scientists, produced in conjunction with the forum. This is the second of four interviews for the WEF by Katia Moskvitch.

The price of oil has plummeted from more than $100 a barrel in July to less than $50. Meanwhile the U.S. has become the world’s leading producer of natural gas, helping the country become more self-sufficient on energy. Will this abundance of fossil fuels derail the world’s shift to renewable sources of energy, such as wind and solar power? And what does this shifting energy landscape mean for the role of fossil fuels in the U.S. energy mix? And what about nuclear power—should concern of the safety of nuclear waste trump the benefits of exploiting this noncarbon-polluting source of energy?



The One Chart That Shows Why 2014 Was a Breakthrough Year for Utility-Scale Solar in America

2014_PPA_Prices_Utility-Scale_SolarAnd another chart that shows how things could pivot the other direction very quickly.

Over the next two years, America will build roughly 13 gigawatts of utility-scale solar PV plants. When up and running, those projects will surpass the country’s cumulative solar capacity across all sectors reached at the end of 2013.

Why such a big surge in utility-scale solar after a brief slowdown in the project pipeline?

The answer is price.

Utilities are now able to consistently buy solar electricity from large plants for between 4.5 cents and 7.5 cents per kilowatt-hour, as shown by GTM Research data below.

Between 2008 and 2010, when America saw its first surge of utility-scale PV construction, power-purchase agreements were consistently priced at double or triple those prices (or even more).


Solar Power’s Stunning Growth: U.S. Generation up 100 Percent This Year

utility-scale solarThe amount of electricity generated by U.S. utility-scale solar photovoltaic power plants is up more than 100 percent in 2014 over the same period in 2013, thanks to big projects, many of them highly productive, that have been coming online.

Four major factors have made the solar surge possible: The eight-year extension of the Investment Tax Credit for renewable energy that was part of the 2008 Bush economic bailout package; state renewable portfolio standards; the Obama administration’s pro-solar policies, including friendly environmental reviews, cash grants in lieu of tax credits and guaranteed loans; and the steep decline in the price of PV.


The Media Will Never Get Ivanpah Right

520-Ivanpah-concentrating-solar-power-plantBrightSource Energy’s massive Ivanpah concentrating solar power plant began ramping up to speed in the Mohave Desert last February, busily cranking out solar-sourced electricity after years of planning and construction. Given the plant’s hefty Energy Department loan guarantee, Ivanpah has also been cranking out controversy from the get-go, with our friends over at Fox News gleefully leading the charge.

We thought that was all over and done with now that the plant is up and running, but earlier this month a new development in Ivanpah’s financing gave Fox another opportunity to pounce. BrightSource has responded with a missive to set the record straight on Ivanpah, so let’s see what the buzz is all about.

Lockheed Martin To Provide Nanotech-Based Structures For Canal-Top Solar Power Projects In India

520-Canal_Top_Solar_Power_PlantAfter Gujarat’s success with canal-top solar photovoltaic power plants, other Indian states are also planning large-scale implementation of similar projects.

India’s northern state of Punjab plans to set up 1,000 MW of solar PV projects to cover several kilometres of canals over the next three years. The state government has announced a target to cover 5,000 km of canals across the state. Through this program, the government hopes to generate 15% of the state’s total electricity demand.

Understandably, the construction of canal-top power plants is technically and structurally very different from rooftop or ground-based solar PV projects. The mounting structures for the solar PV modules cannot be heavy, as it could adversely impact the structural integrity of the canal itself. The structures should be easy to work with, as they are to be set up over a slope.

Largest Solar Power Plant in Africa Flips the Switch

The Jasper solar power plant in northern South Africa is now the continent’s largest.
The Jasper solar power plant in northern South Africa is now the continent’s largest.

With seven of the world’s fastest growing economies located in Africa, it should not be a surprise that the continent’s energy demands will only surge in the coming decade. Hence plenty of opportunities exist for clean energy companies as investors worldwide realize Africa, with all of its risks, is a booming market. To that end, California-based Solar Reserve, together with numerous partners, has completed and launched the Jasper PV Project in South Africa.

Built in South Africa’s Northern Cape Province, the Jasper solar power plant is now the largest of its kind on the African continent. The consortium that led the development of the Jasper facility included the Kensani Group, Intikon Energy, Rand Merchant Bank and Google. Incidentally, the Jasper plant is Google’s first clean energy investment within Africa.

Dry Creek tribe plans large solar power project

520-dry-creekA huge solar array could be in place by next spring in the hills overlooking Lake Sonoma under a cooperative venture announced Monday between the U.S. Army Corps of Engineers and the Dry Creek Band of Pomo Indians.

The solar panels would generate electricity for the fish hatchery, visitors center and other buildings at the base of Warm Springs Dam northwest of Healdsburg, as well as the tribe’s River Rock Casino and its other facilities near Geyserville, according to details released by the tribe and the Army Corps.

Tribal Chairman Harvey Hopkins called it “great for the tribe, great for Sonoma County and great for the environment.”

Large solar selling cheaper than fossil fuels in Texas, Georgia, India, Brazil

520-solar-power-cost.png.662x0_q100_crop-scaleFirst of all, let me make it clear that this article is about “utility-scale” solar power, not rooftop solar power. Rooftop solar is a different beast, because it’s more expensive per unit of electricity than utility-scale solar but it generally competes with retail electricity prices rather than wholesale electricity prices. For millions of Americans, and many more worldwide, rooftop solar is already cheaper than electricity from the grid, but until recently, utility-scale solar projects weren’t cheaper than other types of power plants (ignoring externalities, which we shouldn’t really do but we do). That has been changing.

As you can see in the chart at the top, the levelized cost of electricity from solar power is expected to be as low as $60/MWh, lower than the lows for any fossil fuels or nuclear power. And that assumes a 20-year lifespan for the solar power plant, much less than (maybe not even 50% of) the actual lifespan of a solar power plant.