Corporate buyers continue to meaningfully move the needle when it comes to bringing more clean energy capacity online. Thanks to the leadership of committed organizations, in 2022, corporate procurements in the U.S. supported nearly 17 gigawatts of clean energy capacity, while in Europe, PPAs supported 6.6 gigawatts of renewable generation. The Clean Energy Buyers Association noted that more than 55% of U.S. companies that bought clean energy in 2022 were new to the market; evidence of the blistering growth the corporate PPA market continues to experience.
The global threats posed by climate change place a constant imperative around buying and building more clean energy, faster. For many corporate buyers and their advisors, fast-approaching sustainability targets present another particularly motivating impetus to procure clean energy and contribute meaningfully to climate action. Corporate sustainability departments can make good on their public commitments, but must remember that PPA procurement timelines can be long, and that today’s market brings no shortage of challenges. Whether teams are facing down a 2025 goal they must rapidly meet or are focused on 2030, there truly is no time to waste.
Traditional Market Approaches Still Bring Long Timelines
LevelTen has worked hard to provide clean energy buyers with time savings and automation that speed PPA procurement timelines. But even with these advances, a standard RFP process for a renewable PPA still takes an average of ten months or more to complete. To be specific, procurements initiated in 2022 took 325 days on average to reach PPA execution, according to LevelTen data. Many procurements could, of course, take longer than this.
This means buyers and their advisor who are looking to complete a PPA in 2024 must begin their procurements as soon as possible. Teams that fail to move into the new year with a well-prepared procurement plan (if not a procurement already underway) may struggle to secure the capacity they need. We encourage buyers and advisors to work together to outline procurement goals and guardrails, and initiate the process of aligning internal stakeholders as early as possible to maximize deal efficiency and their chances for success.
Even buyers with 2030 goals shouldn’t wait any longer to explore the market. At LevelTen, we are seeing many buyers already soliciting offers from projects that have commercial operation dates (CODs) in 2027 or 2028. As a wide variety of development headwinds continue to extend timelines for many projects, it’s not implausible to imagine that these CODs may move even further back. Savvy buyers understand that congested interconnection queues, rising interest rates, and many other pressures will keep making project development an uphill endeavor in most markets, and will continue to restrict available project supply. Ultimately, this means hitting 2030 goals requires action in the near term.
New Innovations From LevelTen Are Transforming Procurement Timelines
Undoubtedly, an expected ~1 year timeline for RFP-based procurements may bring some anxiety to buyers with fast-approaching targets. The window for executing on these goals may still be open for focused and motivated buyers who begin the process today. However, buyers with truly pressing deadlines are particularly encouraged to explore LevelTen’s recent procurement innovations.
New procurement approaches, developed by LevelTen in collaboration with developers and experienced corporate buyers, can provide greater certainty and dramatically reduced timelines. Innovative market approaches like PPA Auctions and LEAP can accelerate successful procurements through a variety of new market approaches.
LEAP, for example, has shown the ability to reduce the time it takes to enter into a PPA by 80% compared to historical methods. PPA Auctions, too, can dramatically reduce the time it takes for buyers to secure a deal that meets their organizational goals. Needless to say, these avenues to securing capacity present strong options for buyers looking to minimize uncertainty around hitting their goals, and for those who are motivated to contract with developmentally mature, risk-mitigated projects by the end of 2024.
Your Goals Are Within Reach — But Don’t Wait to Act
Corporate decarbonization goals have a critical part to play in creating a sustainable future. Market challenges will persist, but buyers who move quickly and decisively can reach their targets. As always, LevelTen Energy and our wide-reaching industry network is here to support your team in achieving its goals. Buyers and advisors interested in learning more about LevelTen’s new market approaches, or who would like to issue an RFP on the LevelTen Energy Marketplace, are encouraged to reach out to firstname.lastname@example.org.