Today, LevelTen Energy announced its support of Starbucks’ diversified renewable energy portfolio, including two marquee projects Starbucks unveiled at its 2020 Biennial Investor Day. Included in these projects is an innovative new agreement with Terra-Gen, facilitated by LevelTen, to virtually procure 5.5 megawatts of battery storage capacity and 24 megawatts of solar energy from Terra-Gen’s Edwards Sanborn Solar and Storage project. Starbucks is the first corporation to execute this type of financial agreement for utility-scale storage, produced in coordination with LevelTen and EnergyGPS. This new contract not only provides corporate buyers the economic benefits of storage, but also delivers developers a guaranteed revenue stream, enabling a more practical method for storage project financing.
With this transaction, Starbucks is also setting an important precedent. Storage is key to reducing our reliance on fossil fuels, but until now, contracting with utility-scale storage project developers was impractical for most corporations. Stored renewable energy can be sold during the highest-priced hours of the day, when reliance on coal and gas is often high. When organizations add storage to their portfolio of wind and solar PPAs, it can add value and smooth pricing variability by extending the hours of the day the energy is sold. By providing a more practical way to contract with storage developers, this type of financial agreement opens the door to billions of dollars of investment in large-scale energy storage projects, in much the same way virtual power purchase agreements (VPPAs) ushered in a wave of wind and solar project development in the U.S. and beyond.
“In 2019, Starbucks innovated when it worked with LevelTen Energy to create an unprecedented portfolio of three renewable power purchase agreements. Now, Starbucks is again paving the way for others to follow with this innovative contract for utility-scale storage,” said Bryce Smith, chief executive officer of LevelTen Energy. “By investing in storage, Starbucks will increase the value of its existing renewable energy portfolio and reduce our reliance on fossil fuels at the same time. It’s a transaction template for others and an incredible mechanism to rapidly scale storage capacity on the grid.”
Terra-Gen’s Edwards Solar and Storage project, located in southern California, is expected to come online in 2021. Once operational, the project will help Starbucks get one step closer to its goal of achieving a 50 percent reduction in carbon emissions in direct operations and supply chain.
LevelTen applauds Starbucks and Terra-Gen for their leadership in being the first entities to execute this innovative new contract, as well as EnergyGPS for their added expertise in helping bring this structure to market. To read more about Starbucks’ other renewable energy commitments announced today, visit Starbucks Stories.