The Corporate Renewable Energy Buyers’ Principles tell utilities and other suppliers what industry-leading, multinational companies are looking for when buying renewable energy from the grid. A group of large energy buyers developed these six principles to spur progress on renewable energy and to add their perspective to the future of the U.S. energy and electricity system.
The Buyers’ Principles outline six criteria that would significantly help companies meet their ambitious purchasing goals:
1. Greater choice in procurement options,
It is important to have choice when selecting energy suppliers and products to meet our business and public goals.
2. More access to cost competitive options,
We know renewable energy can already achieve cost parity, or better, compared with traditional energy rates. When purchasing renewable energy directly, we would like to be able to buy renewable energy that accurately reflects the comprehensive costs and benefits to the system. Many of us are willing to explore alternative contract arrangements (e.g., entering into long term supply arrangements with utilities and other suppliers to provide revenue certainty) that can bring down the cost of capital.
3. Longer- and variable-term contracts,
A significant part of the value to us from renewable energy is the ability to lock in energy price certainty and avoid fuel price volatility. Many companies would like to have options for entering into contracts over various time periods.
4. Access to new projects that reduce emissions beyond business as usual,
We would like our efforts to result in new renewable power generation. Pursuant to our desire to promote new projects, ensure our purchases add new capacity to the system, and that we buy the most cost-competitive renewable energy products, we seek the following:
Access to bundled renewable energy products— energy and Renewable Energy Credits (RECs)
- We are increasingly interested in access to bundled energy and REC products. Unbundled RECs do not deliver the same value and impact as directly procured renewable energy from a specific project or facility.
Ability to prevent double counting within the energy consumer community
- In order to claim the benefits of our renewable energy purchases to satisfy our public goals and reduce our carbon footprint, current US rules require that we retain ownership of the RECs or that they are retired on our behalf. Some companies find this single-instrument system creates competition between energy generators and energy users that can slow the growth of voluntary corporate renewable purchases. We welcome discussion to explore market mechanisms that enable greater voluntary growth of renewable energy while maintaining accounting integrity. What is most critical to us is that we have the ability to add more renewable energy to the system and claim the consumption of the relevant renewable energy and GHG emission benefits while preventing another energy user from claiming consumption of the same renewable energy.
Renewable energy delivery from sources that are within reasonable proximity to our facilities
- Where possible, we would like to procure renewable energy from projects near our operations and/or on the regional energy grids that supply our facilities so our efforts benefit local economies and communities as well as enhance the resilience and security of the local grid.
5. Increased access to third-party financing vehicles as well as standardized and simplified processes, contracts and financing for renewable energy projects
To access renewable energy at the competitive prices and scale we need to meet our goals, many companies are financing and/or procuring renewable energy through third-party providers using power purchase agreements (PPAs) and/or lease arrangements. Increasing access to these types of effective and affordable financing tools is critical. Initially, for some companies, these processes can be complex and costly since they are outside of their core business functions. Simplifying and standardizing policies, permitting, incentives and other processes for direct procurement are high priorities for many companies.
6. Opportunities to work with utilities and regulators to expand our choices for buying renewable energy
Procuring renewable energy in partnership with our local utilities may be a more efficient and cost-effective option. We welcome the opportunity to work with local utilities to design and develop innovative programs and products that meet our needs as well as those of our energy suppliers. In such collaborations, we would seek renewable energy products and programs that address the above principles and that
Fairly share the costs and benefits of renewable energy procurement
- We seek to purchase renewable energy that reflects the net costs and benefits to the system, including the actual cost of procurement and benefits, such as, but not limited to, avoided energy and capacity benefits, without impacting other rate payers.
Apply to new and existing load
- To meet our public goals, we need renewable energy for both new and existing operations.