The Power of Corporate Partnerships
Helping Corporations Lead the Green Revolution
Corporations across America have joined the green revolution. Increasingly global corporate leaders are fulfilling their energy needs by sourcing power directly or indirectly from clean renewable energy generators. In 202, top corporate buyers of renewable energy included Amazon, Google, Verizon, McDonald's, General Motors, Lowe's and Nestle.
Driven by business sustainability initiatives and the historically low costs of wind and solar energy, corporate leaders have discovered that the renewable energy industry has now reached the nexus whereby environmental responsibility and financial benefit have begun to overlap. No longer a burden to the bottom line, adding renewable energy as a component of corporate energy sources can reduce operating costs, provide a hedge against market volatility in traditional carbon-based energy markets, and add supply diversification.
While benefitting from an economic and risk perspective, companies purchasing green energy also enhance their image and brand as forward-thinking environmental stewards focused on their customer’s interests beyond just the goods and services that they directly provide.
How to Participate
Traditionally corporations satisfied their renewable energy goals through the purchase of Renewable Energy Credits (RECs). As corporate sustainability targets have broadened, however, and as clean energy prices have fallen to levels that are now competitive with carbon-based generation, companies execute Power Purchase Agreements (PPAs) directly with wind and solar energy developers.
These PPAs may be structured as either a direct physical contract for the energy produced by the generator or, more often, as a financial contract that provides a long-term price hedge to the company.
Under such structured PPAs the corporate buyer continues to receive its physical energy supply from its existing energy supplier. In addition, Tri Global Energy provides a low-cost, fixed energy price contract to the corporate buyer for the energy its project produces. This is offset when the physical power that the project produces is sold into its local wholesale market. The contracting company receives the corresponding revenue as well as the RECs associated with this energy. The difference in the energy cost associated with the fixed-price PPA and the energy revenue generated by the sale into the wholesale market is tracked and settled on a monthly basis. As energy prices increase over time the net difference accrues to the benefit of the corporate buyer.
Corporate participation in a renewable energy project is not limited to PPAs or RECs, however. For some larger companies there may be a strong strategic interest in directly participating in the financing as either an equity owner or a beneficiary of the federal tax credits that the project produces.
Tri Global Energy welcomes the opportunity to discuss how we may partner with your company to meet its sustainability and renewable energy goals.