Renewable energy is growing rapidly worldwide thanks to lower costs and government incentives for renewable electricity generation, particularly solar and wind generation. That growth is leading to significant change in the electricity industry, presenting opportunities and challenges to large energy consumers.
Purchasing renewable energy is a key component of most sustainability or carbon footprint reduction strategies, however it can be fraught with complexities and unforeseen risks. Excel Commercial Solar can help your organization navigate the complexities of renewable energy procurement with its renewable energy consulting services.
Renewable Energy Strategy Development
A well-developed renewable energy strategy is key to the successful integration of renewable energy purchases into an energy supply portfolio. Key areas that Excel Commercial Solar can help address are:
- Establishing the goals of the renewable strategy:
- Serve load & hedge against rising commodity costs,
- Renewable portfolio standard (RPS) compliance hedge,
- Carbon footprint reduction,
- Sustainability goals
- Brand identity
- On-site vs. off-site purchases
Financing structures including:
- Cash purchases
- Power purchase agreements
- Virtual power purchase agreements
- Roof top leases
- 3rd party financing
- PACE financing
- Additionality vs. sourcing from an existing facility
Evaluating a Renewable Energy Purchase
Evaluating a renewable energy purchase can be complicated and requires many different assumptions and inputs. Excel Commercial Solar brings substantial analytical tools and capabilities to the evaluation and structuring of each transaction.
- Long term power price forecasting
- Scenario based analysis of future grid states
- Analysis of risks such as congestion, curtailment, production guarantees, etc.
Complete financial modeling of a transaction including:
- Avoided grid power costs,
- Sales of excess production and capacity,
- Value of offsets & credits,
- Financing costs,
- O&M costs,
- ISO settlement charges and others
- Feasibility of integrating energy storage into purchase
Renewable Energy Procurement
Procurement of renewable energy differs substantially from procurement of conventional energy. Excel Commercial Solar can manage the process from end to end so your organization can focus on the strategic decisions that will determine the success of the purchase.
- Coordinated RFP process to fit renewable energy strategy
- Evaluation of development process and asset location for offsite purchases
- Review of finance ability of proposed projects
- Comparison of expected production profiles and ability to meet goals of purchase
- Arrangement of additional services needed as part of the renewable purchase or separately, including:
- Scheduling services,
- Settlement services,
- Metering & telemetry,
- Regulatory obligation management and others
Negotiation of Power Purchase Agreements
Power purchase agreements (PPAs) for renewable energy vary greatly between different suppliers and developers of renewable energy. Having an energy market expert such as Excel Commercial Solar at the table is critical to negotiating an agreement that will deliver the expected value over the typically long term of the agreement. Key commercial terms Excel Commercial Solar focuses on include:
- Appropriate risk allocation between the parties
- Energy production guarantees
- Remedies for production shortfall, default, and other adverse outcomes
- Force majeure, buyer and utility curtailments
- Regulatory and compliance costs and allocation
- Ownership of generation attributes including renewable energy credits, carbon offsets, resource adequacy capacity, and others
- Security requirements