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Corporate Clean Energy Buying Surged to New Record in 2018, Led by Aggregation Models

Stories about climate change can be full of doom and gloom, but today there was a glimmer of hope. BloombergNEF reports that corporations bought a record amount of clean energy through power purchase agreements, or PPAs, in 2018, shattering the previous record set in 2017.

Here are a few highlights from the report:

  • "More than 60% of the global activity in 2018 occurred in the U.S., where companies signed PPAs to purchase 8.5GW of clean energy, nearly triple the amount signed in 2017."
  • "This wave of new corporate PPAs was ushered in by first-time corporate clean energy buyers. In 2018, some 34 new companies signed their first clean energy PPAs, making up 31% of total activity in the U.S."
  • "These firms are aggregating their electricity demand to reap the economies of scale from larger solar and wind projects. In many cases, they benefit from partnering with a bigger, more experienced buyer - known as an anchor tenant - who can offer a stronger balance sheet and expertise on accounting and legal nuances when signing a PPA."

Kyle Harrison, a corporate sustainability analyst for BNEF and lead author of the report, said: "The aggregation model has heralded in a new generation of corporate clean energy buyers. These companies no longer need to tackle the complexities of clean energy procurement alone. They can share risks associated with credit and energy market volatility with their peers."

LevelTen Energy facilities this type of aggregation. Through our renewable energy procurement platform, companies with modest energy demands can execute PPAs in volumes that meet their needs, either independently, through custom portfolios, or partnered with other specific buyers. This is made possible by the LevelTen Marketplace, where we've gathered information on the energy needs of more than 200 corporate buyers, and data on the vast majority of utility-scale wind & solar projects under development in North America. With a deep understanding of the needs of project developers and corporations, we can use our Dynamic Matching Engine to match buyers to projects in optimal ways.

One example of aggregation in action was announced a few weeks ago. With guidance from LevelTen Energy, five global corporations -- Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday - signed agreements to purchase 42.5 megawatts from a 100-megawatt solar project. The deal was the first time a group of companies pooled their demand to act collectively as an anchor tenant for a project, creating a new blueprint for renewable energy aggregation.

The deal is just one example of how companies are using the LevelTen platform to achieve renewable energy goals. LevelTen's technology can aggregate multiple buyers, as it did in the case above. Companies can also use the LevelTen platform to identify projects that have an existing anchor tenant in place, and are therefore able to sell small slices of power to "top off" their procurement stack.

By providing corporations multiple aggregation options, streamlining the contracting process with tools like RFP Automation and standard PPA contracts, and delivering industry-leading wholesale market analytics, LevelTen Energy is making it easier and safer for small and medium-sized businesses to enter into PPAs for the first time. By arming the industry with new transaction models and sophisticated software tools and services, we are hard at work trying to make 2019 another record-breaking year!

LevelTen Energy

LevelTen Energy is the leading provider of renewable transaction infrastructure, delivering the marketplaces, software, automated analytics, and expertise required to accelerate clean energy transactions. The LevelTen Platform is the world’s largest online hub for renewable energy buyers, sellers, advisors, asset owners and financiers. The Platform includes the LevelTen Energy Marketplace, which delivers access to more than 4,500 power purchase agreement price offers spanning 28 countries in North America and Europe. It also includes the LevelTen Asset Marketplace, which brings together over 800 renewable energy project developers and owners, and delivers the online tools and expertise they need to buy, sell and finance assets quickly. Together, LevelTen and its partners share #OneGoal to accelerate the energy transition.

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