Over the past several decades, leading corporations have used specific, proven models to invest in renewable energy. These companies have set precedents for the most effective procurement methods across the globe, which vary in terms of simplicity, cost-savings, and flexibility. These methods may involve Renewable Energy Certificates (RECs) in the form of utility green tariffs, green pricing programs, unbundled RECs. They may also take the form of third-party power purchase agreements or turnkey purchases.
Corporations globally have validated four methods of renewable energy procurement over the past few decades: unbundled energy attribute certificates (EACs), power purchase agreements (PPAs), utility or supplier renewable electricity offerings, and self-generation. Availability of these options vary depending on local regulations.
Note that the terms EACs and RECs are used interchangeably.
Over time, the use of various types of renewable energy procurement options has changed, with increasing use of PPAs and self-generation, though unbundled RECs and utility offerings still dominate the market.
Note that contract with suppliers refers to utility green tariffs, and self-generation refers to turnkey purchases.
Though a range of renewable energy sources exists, some technologies are considered more sustainable than others.
What is renewable?
RE100 defines renewable electricity as “electricity generated from biomass (including biogas), geothermal, solar, water and wind electricity sources”. Depending on the context, there may be a need to consider further criteria regarding large scale hydropower and biomass. For example, the social and environmental impact of large scale hydropower can be a relevant consideration – with entities such as the World Commission on Dams providing guidance on such issues. Similarly, the sustainability ability of fuel for biomass generation can be subject to different perspectives and criteria. Often companies themselves define what they consider to be renewable, e.g. excluding or including hydro or biomass plants
Read Excerpt: Page 24 from Corporate Renewable Power Purchase Agreements: Scaling Up Globally by WBCSD.
Renewable energy certificates (RECs) are an important mechanism that companies use to invest in renewable energy. They are tradable market-based instruments that represent electricity generated from renewable sources. There are a number of verification ...
Third-party power purchase agreements (PPAs) enable companies to save on electricity costs by committing to long term power agreements with independent power producers (third-parties). In recent years, more and more companies have utilized PPAs to procu...
Turnkey purchases, while costly upfront, present the most straightforward option for companies to invest in renewable energy, provided the company has technical expertise and the physical space required. Turnkey purchases can offer benefits including si...