January 23, 2019
“Yet-Another-Corporation Achieves 100% Renewable/Sustainability Goal Through VPPA.”
You’ve probably seen many headlines just like this. It can be exciting! It can be progressive! It can be… daunting.
If you’re considering a VPPA to meet your sustainability goals, you may feel like the complications and intricacies of VPPA contracts are holding you back from taking the next step. You’ve done the research, you’ve talked with your peers – and you still may be asking yourself, “But is this right for me?”
Rachit Kansai of the Rocky Mountain Institute brings up this exact point in his recent blog titled, “The Diversifying Corporate Renewable Market Needs a Broad Menu of Risk Mitigation Options.” He uses the example of excitedly sharing a favorite dish, Thai Peanut, with a large group of friends – only to discover that this one-size-fits-all, simplified plate doesn’t work for all of his dinner guests. To his dismay, a vegetarian, a vegan, a pescatarian, a guest with a peanut allergic, and a guest with spice sensitivity cannot participate in his single-serve meal.
Mr. Kansai uses his blooper to exemplify the historically oversimplified market for corporate renewable energy procurement. “A restaurant with just one specialty, no matter how good, can never cater to a large and diverse group of customers… So, too, for corporate renewable procurement. It should be obvious that a market with one major way to transact, no matter how good, can never sustainably expand.”
I agree. And I’m excited by the recent changes in the corporate renewable energy procurement marketplace, which is why the Geronimo Energy team and I participated in and contributed to the Business Renewables Center’s (BRC) new white paper, A Corporate Purchaser’s Guide to Risk Mitigation. This white paper outlines new solutions, including risk mitigation tactics, that are opening doors to companies, universities and organizations previously unable to participate in the market. Developers, finance partners, and buyers alike are embracing the idea that one size does not fit all and together, are working hard to remove the old roadblocks that the Instant Pot version of the Virtual Power Purchase Agreement (VPPA) may have presented for some buyers. Together, we’ve come up with creative solutions to mitigate risks related to price, shape, basis, volume and project operations. Contracts are now more flexible than ever, offering modifications such as shorter terms, hub settlements, and aggregation solutions, among other variances from previous VPPAs.
At Geronimo Energy, we’ve contracted over 300 megawatts (MW) of corporate VPPAs in the last year alone, and through our extensive community solar portfolio, we’ve subscribed nearly 200 individual companies to 200+ MW of community solar projects. We’re working with some of the nation’s largest corporations, as well as several smaller organizations and companies who just five years ago, may not have been able to access renewable energy procurement as a method to achieving their sustainability goals. We are on the front lines of corporate renewable energy procurement, and we’re excited to see the industry advancing, growing, and making room for all types of buyers.
As an industry, I think we’ve just started to co-author a new menu for increasing renewable energy procurement and overall market participation, and I’m excited to see who comes to the table.
So bring your ideas, and we’ll bring ours – and together, we can prepare a feast that includes, in Mr. Kansai’s words, “options for a growing set of risk appetites and profiles.”
Denise Hugo is Geronimo Energy’s Director of Origination. Ms. Hugo specializes in corporate renewable energy procurement for Geronimo Energy’s entire wind and solar project portfolio, including procurements ranging in size from 10 MW aggregated contracts to 400+ MW anchor contracts.
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