Bloomberg, Cox Enterprises, Gap Inc., Salesforce and Workday Close All-New Renewable Energy Aggregation Deal
NEW YORK, January 18, 2019 /3BL Media/ – Bloomberg, Cox Enterprises, Gap Inc.(NYSE: GPS), Salesforce (NASDAQ: CRM), and Workday (NASDAQ: WDAY), with guidance from LevelTen Energy and its renewable energy procurement platform, closed 42.5 megawatts of a 100 megawatt North Carolina solar project, by global renewable energy developer, service provider and wholesaler, BayWa r.e. This group of companies, coming together as the Corporate Renewable Energy Aggregation Group, is the first example of companies aggregating similar, relatively small amounts of renewable energy demand to collaboratively enter into a virtual power purchase agreement (VPPA), collectively acting as the anchor tenant for a large offsite renewable energy project. The unprecedented coordination between five international businesses lays the groundwork for other corporates to procure renewable energy cooperatively, maximizing value and reducing risk.
The five members of the group, with support from the Business Council on Climate Change (BC3) and the Business Renewables Center (BRC), began collaborating in late 2017. Many potential renewable energy purchasers have historically been faced with a key problem: businesses looking to procure smaller energy loads have been unable to contract directly with large offsite renewable energy projects due to limited energy demand. This has so far restricted business’s ability to catalyze the development of new renewable energy projects. To solve this problem, the group evaluated several mechanisms for aggregating smaller amounts of renewable energy demand to afford them the collective buying power that is typically necessary to contract directly with a large offsite renewable energy project.
The eventual solution chosen by the group was a uniform VPPA contract and a single, shared legal counsel to negotiate and finalize the transaction. This helped to further streamline the final phases of the transaction. The new, simple structure allows the buyers to contract for relatively small pieces of the BayWa r.e. solar project, keep transaction costs low, and learn best practices from each other. The group hopes that other buyers see this structure as a viable way to enter the large offsite renewable energy market, helping accelerate corporate procurement of clean energy and expand renewables deployment in the U.S.
“The process of buying renewable energy through a PPA can be difficult and time-consuming, especially for buyers seeking smaller energy loads. Combining our resources as a single group of buyers has enabled us to scale our impact,” said Michael Barry, Head of Sustainable Business Operations at Bloomberg. “This transaction is a great example of a group sharing best practices, working together and showing the benefit that cross-firm collaboration can have. It also serves as an example to developers that a market exists for these types of projects.”
Click here to read the complete press release, including company quotes.