Month: August 2018

Apple, Akamai, Etsy and Swiss Re partner on largest renewable energy aggregation to date

Wind turbines in the field at dusk

PJM-summary-graphic

While many companies seek to make a demonstrable impact on climate change by bringing new renewable energy projects into their electricity supply portfolio, this aspiration has been challenging for companies with smaller or geographically distributed loads whose needs are too small to enable a project to come to fruition. Enter aggregation.

By joining together, smaller energy users can create enough buying power to make a material impact on a project’s financial outlook, attracting the attention of project developers and opening this impactful solution to a wider range of companies.  In addition, by bringing multiple companies into a single procurement, aggregation has the ability to reduce transaction costs and create economies of scale.

In 2018, 3Degrees supported Apple, Akamai Technologies (Akamai), Etsy and Swiss Re as they leveraged their collective buying power in the largest aggregated corporate renewable energy transaction to date . This aggregation resulted in six power purchase agreements – the largest one greater than 130 MW and the smallest less than 5 MW. The companies’ efforts demonstrate how corporate energy buyers of all sizes can successfully purchase renewable energy directly from new renewable projects.

Challenges

News in the corporate renewable energy space is often dominated by announcements of mega-purchases, where a large energy user strikes a deal with the developer of a large wind or solar project.  These announcements send an implicit message that the economic and environmental benefits of contracting with large renewable energy projects are only available to the largest of electricity users. Fortunately, the market is evolving to serve buyers of all sizes. Aggregated purchasing is one effective option gaining traction among buyers with diverse needs.

“Etsy is excited to be a part of a project that will benefit both the planet and our customers. This agreement will help Etsy to meet our goal of powering operations with 100% renewable electricity while also innovating by paving the way for small companies to participate in the renewable energy market.” 

–Rachel Glaser, Etsy Chief Financial Officer

This aggregation came together when four prospective energy buyers – Apple, Akamai, Etsy and Swiss Re – decided to act jointly to purchase renewable energy in the PJM energy market.1 The participants recognized their common aims through their already-active work in the energy sustainability space – variously as buyer-supplier companies, peer-to-peer colleagues, and as clients of 3Degrees. They also shared a desire to help prove new renewable energy purchasing models so as to enable other companies to secure renewable supply more quickly and easily. These four companies, dubbed The PJM Gang, had diverse energy needs but also had corporate renewable energy goals with similar timing requirements and a consistent view toward the importance of making an impact with their purchase.  

After the team of buyers was in place, 3Degrees was tasked with finding the perfect blend of projects in terms of size, technology, location, economics and timing. While generally aligned, each company had unique needs. It was also essential to ensure that all four buyers were ready and willing to move cohesively through the procurement to contract execution.  

“Through this aggregation and 3Degrees’ support, Swiss Re is able to reduce its carbon footprint, which helps us to live up to our goal of making the world more resilient. We hope that this deal will encourage other organizations with smaller energy consumptions to join together and switch to renewable energy.”

–Dr. Lasse Wallquist, Senior Sustainability Risk Manager at Swiss Re

How we helped

3Degrees led the procurement process, resulting in individual PPAs for each company, while providing stakeholder education and support to each company individually, according to their differing needs.   

The first stage of the process consisted of quick market price discovery and analysis to gather the facts necessary to engage, educate and align company stakeholders. This early market analysis was critical to ensure all companies had a green light for the procurement, as well as gained approval on contract length, acceptable pricing, general terms and conditions, and offtake amounts. Each buyer made a go/no-go decision regarding  participation in the second stage.

After all four companies gave the thumbs up, 3Degrees solicited proposals from project developers, validated project development assumptions and completed rigorous risk and financial analyses. For the shortlisted projects, a deep-dive qualitative due diligence was conducted to provide the four companies with a holistic picture of each project’s viability, the reputation of the developers, as well as background on the developers’ engagement with the local community to date.

“Our collaboration with 3Degrees, Apple, Etsy and Swiss Re resulted in a superior outcome than we could have achieved on our own, and gives us confidence that we will achieve our 2020 global renewable energy goal.”

–Dr. Nicola Peill-Moelter, senior director of environmental sustainability at Akamai

For the top ranked projects, 3Degrees evaluated numerous project pricing options to determine the best possible financial offers, then navigated the intricate process of allocating the offtake available from several projects still under consideration among the four buyers – balancing differing project characteristics and financial specifics across the buyers’ needs and aspirations. Next, a custom calculator was developed to compare prices across multiple project combinations, considering a variety of hypothetical wholesale energy market price scenarios which would affect the purchase’s overall economics. Ultimately, the buyers selected an Illinois wind project and a Virginia solar project, agreed upon the final offtake allocation and entered into the contract negotiation phase.

3Degrees supported the buyers throughout the contracting process – acting as a unified voice for the group during negotiations, advising on contract terms and making recommendations based on each client’s unique needs and priorities. In spite of varying risk tolerances and needs for specific terms, the PJM Gang negotiated from a single set of commercial terms which were ultimately translated into side-by-side PPAs for each buyer and project.

Results

1 PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.

 

More on Renewable Energy Procurement services from 3Degrees.

Why my work matters: Lisa DiMartino

Lisa DiMartino is a senior manager in our utility practice.
seattle

Some of my favorite recent projects:

  • Serving as a founding member of the 3Degrees diversity and inclusion team with responsibility for leading D&I training, including our first ever company-wide, in-person training.
  • For a northwest utility, managed several large, multi-city community challenges, working with community leaders to promote renewable energy through events, outreach and other marketing tactics.
  • Helped a utility client bring together separate but related marketing initiatives around energy efficiency and renewable energy, resulting in improved customer experience.

 

quote1

I’m passionate about inspiring clients and their customers to choose renewable energy, and in doing so, help transform the industry.

 Special skills & expertise

sustainability   spanish-speaker teams
15 years of sustainability experience Identifying client needs and building solutions to address them Data driven approach to marketing and outreach Conversational Spanish Superpower:
Facilitates and inspires teams through collaboration, inclusion, transparency and heart.

 

Watch Lisa’s video:

Apple, Akamai, Etsy and Swiss Re Collaborate to Accelerate Renewable Energy Development in Illinois and Virginia

PJM Press Release

Projects to generate 290 megawatts of clean energy, enough to power 74,000 homes

Apple, Akamai, Etsy and Swiss Re today announced an agreement to develop two new wind and solar energy farms in Illinois and Virginia. Spearheaded by Apple, the new projects will generate 290 megawatts to the PJM electric grid serving much of the Eastern United States, including areas of Virginia, Illinois, Pennsylvania, New Jersey, and Maryland. The two new projects will provide enough power for 74,000 homes and will support each of the companies’ operations.

Akamai, Etsy and Swiss Re previously had limited opportunity to access large renewable energy projects in the regions covered by the thirteen state PJM wholesale electric market. By collaborating with Apple, these companies were able to access wind and solar power from the new projects at competitive prices and agreement terms. Collaborations like this accelerate the pace at which new renewable energy generation is built and brought online.

The group, with technical assistance from 3Degrees, will collectively purchase 125 megawatts from a wind farm near Chicago and 165 megawatts from a solar PV project outside Fredericksburg, Virginia, which will be delivered to the electric grid covered by the PJM wholesale electric market. The projects are expected to come online over the next two years. The solar and wind projects will be developed by sPower (an AES and AIMCo company) and Geronimo Energy, respectively.

“At Apple, we’re proud to power all of our operations around the world with 100 percent renewable energy,” said Lisa Jackson, Apple’s Vice President of Environment, Policy and Social Initiatives. “In the process, we’ve charted a course for other companies and organizations to purchase renewable energy and transition their own operations to greener power. The collaboration announced today shows how companies of all sizes can address climate change by coming together.”

“Etsy is excited to be a part of a project that will benefit both the planet and our customers,” said Rachel Glaser, Etsy Chief Financial Officer. “This agreement will help Etsy to meet our goal of powering operations with 100% renewable electricity while also innovating by paving the way for small companies to participate in the renewable energy market.”

“We are proud to be partnering with these corporate leaders to accelerate renewable energy adoption. For Akamai, this collaboration was critical in closing these deals; and, in conjunction with our Texas wind project signed last year, we are on target to achieve our 2020 global renewable energy goal,” said Jim Benson, Akamai EVP and CFO.

“As a leader in mitigating climate risk, Swiss Re aims to reduce its carbon footprint and support renewable energy, which is why we’re so happy to be part of this collaboration,” said Brian Beebe, Head of Origination North America, Weather and Energy, Swiss Re Corporate Solutions. “We also hope to speed up the adoption of these clean technologies through Swiss Re Corporate Solutions’ innovative insurance products, which help owners of wind and solar assets decrease cash flow uncertainty.”

“We commend Apple’s leadership in this collaboration between them, Akamai and Etsy. Without this group of forward-thinking companies this project would not be a reality,” said Ryan Creamer, CEO of sPower.


About Akamai
As the world’s largest and most trusted cloud delivery platform, Akamai makes it easier for its customers to provide the best and most secure digital experiences on any device, anytime, anywhere. Akamai’s massively distributed platform is unparalleled in scale with over 200,000 servers across 130 countries, giving customers superior performance and threat protection. Akamai’s portfolio of web and mobile performance, cloud security, enterprise access, and video delivery solutions are supported by exceptional customer service and 24/7 monitoring. To learn why the top financial institutions, e-commerce leaders, media & entertainment providers, and government organizations trust Akamai please visitwww.akamai.com,blogs.akamai.com, or @Akamai onTwitter. For more information about Akamai’s renewable energy program please visit our sustainability site.

About Etsy
Etsy is the global marketplace for unique and creative goods. Our mission is to keep commerce human, and we’re committed to using the power of business to strengthen communities and empower people. We connect millions of buyers and sellers from nearly every country in the world. Buyers come to Etsy to be inspired and delighted by items that are crafted and curated by creative entrepreneurs. For sellers, we offer a range of tools and services that address key business needs.
Etsy was founded in 2005 and is headquartered in Brooklyn, New York.

About Swiss Re
The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. It is organised into three Business Units, each with a distinct strategy and set of objectives contributing to the Group’s overall mission.

About sPower
sPower, an AES and AIMCo company, is the largest private owner of operating solar assets in the United States. sPower owns and operates a portfolio of solar and wind assets greater than 1.3 GW and has a development pipeline of more than 10 GW. sPower is owned by a joint venture partnership between The AES Corporation (NYSE: AES), a worldwide energy company headquartered in Arlington, Virginia, and the Alberta Investment Management Corporation, one of Canada’s largest and most diversified institutional investment fund managers. For more information, visit www.sPower.com.