Is the long-term ppa becoming outdated for corporate renewables procurement_ _ greentech media

Apple, Target, Facebook, Google, Wal-Mart and General Motors are among the nearly half of Fortune 500 companies with sustainability and/or clean energy targets. E85 gas stations in houston Non-utility customers accounted for 52 percent of last year’s 4,000 megawatts of U.S. Gas unlimited wind deals, and American companies represented 907 megawatts of solar in 2015 — a nearly 60 percent increase over the previous year.

But procurement strategy isn’t evolving with the rate of adoption. Electricity generation capacity The private sector’s attachment to the long-term power-purchase agreement (PPA) threatens the long-term reputation of the renewables sector.

The sales pitch: wholesale energy costs will continue to rise, and consumers ought to lock in their energy rate for 10 to 20 years via a PPA. Electricity sources usa This assumption contradicts the trend over the previous seven years. La gasolina cancion Cheap natural gas is likely to sustain downward pressure on wholesale electricity prices for years to come. Gas up the jet These depressed prices will be exacerbated by the coming wave of low-cost renewables. Hp gas online complaint But corporate consumers have not taken heed — of all wind capacity contracted via PPAs in Q4 2015, about 75 percent of that volume will flow to companies.

A 3Degrees executive acknowledged the fallibility of the wholesale pricing assumption in a recent Greentech Media article, but ultimately defended the long-term PPA as a hedge and a cost savings mechanism. Gas exchange in the lungs happens by the process of While this rationale may resonate in the marketing department, it’s unlikely to win over finance and accounting. Gas evolution reaction A long-term PPA is not a hedge. La gasolina mp3 An actual hedge serves to reduce risk. J gastroenterol impact factor A PPA merely fixes risk at an exorbitant premium.

The celebrated deal between Amazon Web Services and Dominion Virginia Power is a relevant case study. A gas has Renewable supply for Amazon’s data centers was acquired via long-term PPA. Electricity storage cost per kwh Dominion customized a retail adder that follows the projects’ wholesale pricing in PJM. 4 gases in the atmosphere The retail adder fluctuates so that when it is summed with the fixed PPA rate and variable wholesale price, the resulting all-in energy rate is always the same.

To put it another way: if wholesale prices go up, Amazon is unable to capitalize on having locked in a lower energy rate via PPA, and will be stuck consuming at the agreed all-in energy rate; if wholesale prices trend downward, never exceeding the PPA rate, Amazon is locked into that same, immobile premium. Gas near me app There is no upside potential — only fixed risk.

Clean energy can be leveraged for more than predictability. Electricity 2pm The strategies outlined below for on-site and virtual resources can transform renewables into flexible risk mitigation instruments. Z gas tecate Hedge the grid

While the fuel component of a utility bill has plateaued, the price of energy delivery, controlled for inflation, is increasing. Gas leak explosion A company can hedge transmission and distribution (T&D) charges only by consuming less or generating behind the meter.

Behind-the-meter solar is a particularly compelling solution for customers seeking to reduce coincident peak (CP) charges. K electric bill payment online The “shape” of solar generation naturally complements most customers’ consumption patterns during these CP intervals. Electricity bill calculator Additionally, ISO/RTO changes to CP months are unlikely to adversely impact the availability of solar during CP intervals. Electricity in costa rica voltage The same cannot be said for diesel- and gas-powered distributed generation, the value of which is more susceptible to CP program design changes.

Evaluation of T&D benefits requires interval-level historic usage, access to forward market curves at the interval level, estimated project output by season, and a market-specific understanding of how T&D charges are assessed to load. Electricity facts Holistic modeling requires access to information that a project developer doesn’t have, so it’s up to the customer (or their retailer or broker) to amass the data and ascertain the value of on-site generation. Grade 9 electricity formulas Align retail contract with​ renewables production

A company with a virtual PPA may foolishly be buying power twice unless it fits its retail electricity contract to renewable energy production.

Take, for example, a company with a wind offtake: It buys the wind generation at the costly PPA rate but must liquidate the generation at the locational marginal price (LMP) — the cheaper real-time rate. Gas 1981 The company compounds this loss by buying the power a second time in the form of the conventional retail electricity delivered to its facility. Youtube gas monkey The company is hedged only if the LMP for its wind output minus its PPA rate (seldom a positive figure) is equal to or greater than its retail electricity rate at the time it happens to be consuming power at its facility . Gas x reviews ratings Wind output typically represents an inverse relationship to load, so these stars are difficult to align.

Instead, the company ought to ensure that estimated interval production from the renewables asset is incorporated into the load forecast for a given facility when its retail contract is being priced. N gas in paris lyrics This is not as easy as it sounds: A company’s traditional energy procurement team frequently operates independently of the sustainability group executing the renewables contracts, so internal coordination is encumbered — especially when there are multiple operating companies and facilities involved.

A retailer with the market certification to schedule generation to the customer can more accurately synchronize the company’s renewables offtake with traditional supply. Gas 4 less manhattan ks As long as the company has contracted the renewable generation at a volume below its facility’s baseload, this strategy can alleviate the double-purchase effect.

At the very least, a company constrained to a traditional offtake agreement ought to pursue community renewables projects that afford it the ability to lock in a fixed rate over a shorter term — typically five years or less.

Renewables are worth more than positive PR, but clean energy advocates have struggled to quantify the value. Gas laws worksheet answers chemistry The formula isn’t readily standardized. Gas constant Few brokers, utilities or retail providers have the expertise or the data to perform this highly localized cost-benefit.

However, corporate consumers wield unique influence, and they ought to pressure these stakeholders for sophisticated solutions. Gasbuddy login Even firms for which energy is a principal cost input may be surprised to learn that it’s possible to achieve sustainability without sacrificing profitability.