Amanda Mortlock, VP of 3Degrees’ Utility Partnerships, discusses the benefits for Utilities who have voluntary renewable energy programs.
MOM’s Organic Market has a long history of environmental stewardship. In 1987, founder Scott Nash recognized the demand for organic food and its vast benefits for our environment and fighting climate change. He decided to start a company to deliver on that need in a way that demonstrates responsible and sustainable business practices. Today, MOM’s has stores in four states and Washington, D.C. and has created a culture centered on its purpose to protect and restore the environment.
Consistent with this culture, MOM’s has matched its total electricity with renewable energy since 2005. The company also practices strict energy and packaging efficiency at all locations, installed on-site solar in three locations, and has a 1.5-megawatt off-site solar farm in Kingsville, MD, which supports approximately 25% of its total power needs. But MOM’s was eager to make an even greater impact and enlisted the support of 3Degrees to further evolve its renewable energy strategy and help build plans to address the company’s long term climate goals.
MOM’s Organic Market has a lean sustainability team with ambitious environmental goals. In addition to the on-site solar that had already been installed on several of the company’s facilities, MOM’s had matched the remainder of its Scope 2 emissions with high-quality, certified renewable energy credits. However, in order to gain access to a more competitive REC market and open up additional funds to reinvest in broader high impact sustainability initiatives, MOM’s turned to 3Degrees to help support its renewable energy sourcing.
Demonstrating an even deeper commitment to environmental sustainability, MOM’s launched its “CARbon OFFset” campaign to address the emissions generated by the retailer’s customers traveling to and from its stores. Armed with the store-level zip code data collected annually, MOM’s turned to 3Degrees to help process this data, determine CO2 equivalencies, and invest in high-quality carbon offset projects to cover the total output of their customers’ tailpipe emissions.
The 3Degrees team helped MOM’s craft a plan that would address both the company’s renewable energy and carbon reduction goals, while meeting its business and financial criteria.
How we helped
3Degrees developed a portfolio of Green-e certified wind facilities across the United States that would allow MOM’s to support renewable energy generation by purchasing enough zero-emitting wind RECs to cover the remainder of emissions from its electricity use.
Carbon Offset Projects
In order to offset its customers’ carbon footprint, MOM’s had to first measure the emissions created from their shopping trips. Every year, the company collects zip code information in store and calculates the average distance customers traveled, then multiplies that by the annual customer count across its 19 stores. 3Degrees uses this information to calculate the equivalent carbon emissions associated with this travel, then identifies high-quality, third-party verified carbon reduction projects to offset these emissions.
Today MOM’s Organic Market invests in a variety of different carbon reduction project types across the United States including landfill methane capture, anaerobic digester (manure methane capture), and emissions capture from U.S. coal mines. These projects all prevent potent greenhouse gases from entering the atmosphere and reduce MOM’s overall carbon footprint from its business operations.
Since becoming a 3Degrees customer in 2015, MOM’s Organic Market has:
- Purchased more than 47,600 wind RECs to match its direct electricity emissions
- Prevented more than 225M pounds of CO2 from being released into the environment
MOM’s Organic Market continues to investigate new technologies and avenues to further reduce its impact on the environment. Its environmental commitment and associated sustainability initiatives have also translated into strong customer satisfaction ratings and customer loyalty.
“Being an environmentally-focused company not only helps the world be a better place, it also helps our business’s bottom line by increasing employee morale and customer loyalty. With expanding options for solar and renewable energy, we hope other businesses follow suit.”
–Scott Nash, MOM’s Organic Market, CEO/Founder
Erin Craig, VP of 3Degrees’ Energy and Climate Practice, discusses the ways in which companies begin to tackle their emissions reduction goals, often beginning with renewable energy purchasing.
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Mark Mondik, VP of Carbon Markets, 3Degrees, speaks about the ways companies are using carbon offsets to support carbon reduction projects to catalyze change in the transportation sector.
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Erin Craig, vice president of energy and climate practice at 3Degrees, speaks about the pathways of finding partners for Renewable Energy Aggregation.
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This 50 MW project came online in 2016 and is composed of 25 turbines. Over the course of construction, the project created construction jobs, helped boost the surrounding economy and provided an interesting project for local spectators to keep tabs on. Located in the small town of Huntington, Oregon, the wind farm is located on a family owned ranch and is expected to be fully operational for 20 years.
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In 2017, Mondelēz International engaged 3Degrees for assistance meeting an ambitious goal: reducing its absolute greenhouse gas emissions vs. a historic base year in each of its four global operating regions. The company thinks of emissions reductions in a virtuous cycle, progressing through usage reduction, on-site consumption from low and zero carbon sources, cost effective solutions that don’t require a change in the supply chain and, finally, off-site renewable solutions to help close any remaining gap. Mondelēz International had been making steady progress through energy efficiency and other on-site solutions, but needed additional reductions to achieve its goals. 3Degrees was hired for a three-year engagement to establish a strategy to achieve the company’s goals across all regions and to support the regional teams’ resulting implementation.
We knew that Mondelēz International’s needs were complex, but we were up to the task and readily accepted the challenge. The company’s ambitious requirements included: the reductions needed to be in place for calendar year 2020 reporting; each region must meet the goal independently; each implementation solution must have a cost-neutral or cost-saving economic profile; and no unbundled instruments such as RECs or GOs could be used.
How we helped
3Degrees began the engagement by identifying emissions hotspots across Mondelēz International’s global operations, then assessed specific countries where it could get the “best bang for their carbon buck”. For example, we looked for opportunities where one solution could address multiple issues, thus optimizing the company’s resources. We honed in on four areas that looked to be the most promising in meeting Mondelēz International’s goals:
- On-site solar
- Green retail (in deregulated markets)
- Combined heat and power solutions (CHP)
- Off-site renewable solutions
For each one of these prospective solutions, 3Degrees conducted a comprehensive analysis that was specific to each region and its target reduction goals. The analysis also included an assessment of specific facilities in the region whose emissions profiles were sufficiently large to allow for a meaningful contribution to the goal should a reduction solution be pursued. We then mapped solutions to each facility, taking into account regional policy environments, resource availability, vendor landscape, project economics, and other factors.
“This was an ambitious assignment because Mondelēz International’s needs were complex and global in nature. But we were up to the challenge and feel very positive about the global strategy road map we were able to deliver and the significant emissions reductions that will come as a result.”
– ERIN CRAIG, VP ENERGY AND CLIMATE PRACTICE, 3DEGREES
3Degrees delivered a global strategy roadmap that will enable Mondelēz International to meet its emissions reduction goals in all four regions by the company’s 2020 target, with solutions that are cost-neutral or better. In some regions, multiple implementation options are available and the company’s regional teams are engaged in final alignment discussions; in other regions, implementation work has already begun. 3Degrees is supporting these implementations, as well as needed changes in Mondelēz International’s greenhouse gas accounting practices to correctly quantify the resulting reductions.
Read about Mondelēz International’s new VPPA
In 2007, leading beverage brand VOSS set out on a mission to take a hard look at the holistic environmental impact of its exceptionally pure bottled water products. Although VOSS offered some of the cleanest water products in the world, the company realized the process of sourcing, bottling and bringing its products to market in over 50 countries had a significant carbon footprint as the price for its success. Inconsistent with their environmental values and detrimental to the very resources from which VOSS water flows, VOSS decided it was time to make a change.
VOSS approached 3Degrees to help it comprehensively address its carbon emissions, which were only going to grow significantly as the company achieved greater success.
VOSS was looking for a thorough, meaningful solution to address its cradle-to-grave product life cycle carbon footprint from the moment it sources its water to the moment the bottle is recycled. VOSS entrusted 3Degrees to dive deep and come up with a methodology and approach that would be impactful, holistic and scale with the company’s global ambitions.
How we helped
There were three phases to 3Degrees’ engagement with VOSS.
Phase One – Carbon Footprint Advising and Calculation
We kicked off our work with VOSS with a comprehensive carbon footprint analysis and recommendations on ways to reduce their overall greenhouse gas (GHG) emissions. 3Degrees calculated and accounted for greenhouse gas emissions from all stages of VOSS’s product life cycle, as well as all employee travel and business activities. This “end to end” product life cycle assessment calculates the impact of the raw material extraction and processing, transport of raw materials, bottling processes, transportation of finished products and, finally, end-of-life management including refilling, recycling or disposal of the bottles and packaging. 3Degrees’ greenhouse gas emissions reduction recommendations spanned product life cycle stages.
Phase Two – High Caliber Carbon Offsets Purchase
To offset unavoidable greenhouse gas emissions, 3Degrees worked with VOSS to identify and select high quality carbon offset projects in the U.S., China and later Australia. The projects were evaluated and selected on the basis of VOSS’s criteria for desired project technologies, geographic locations, volumes, co-benefits, marketability and price point. VOSS then committed to an annual purchase of offsets from the selected projects to neutralize the company’s unavoidable carbon footprint.
Phase Three – Communicating to Stakeholders
Once 3Degrees and VOSS agreed on the strategy for the carbon offsets and implemented the purchase, VOSS wanted to communicate its plan to stakeholders in a compelling manner. VOSS was proud of its environmental commitment and wanted to share that story, but was keenly aware of the need to message it accurately, humbly, and with integrity. 3Degrees’ marketing and design teams developed strategic and tactical communications recommendations, including an environmental mission statement, messaging for packaging, and press release and website copy.
3Degrees built a tremendous amount of trust with the VOSS team and our initial one-time engagement with the company turned into a relationship that’s lasted more than a decade.
Through the partnership with 3Degrees, VOSS was able to:
- Calculate its cradle-to-grave lifecycle carbon footprint
- Implement company-wide carbon reduction efforts
- Mitigate the impact of its unavoidable product life cycle greenhouse gas emissions through the purchase of high-caliber verified carbon offsets
- Powerfully communicate its environmental commitment to internal and external stakeholders
More on Energy and Climate Consulting with 3Degrees.
Kathleen Nickerson is a partnership manager in our utility practice.
Some of my favorite projects:
- Worked with mayor, city council and the city’s largest employers to successfully promote renewable energy in a coastal Oregon city.
- For a large western utility, supported a multi-million dollar grant program that funded renewable energy projects for non-profits and municipalities.
- Based on feedback received from a utility’s customers, expanded our call center services to provide information about all renewable energy options available through the utility.
- Helped to found and manage the 3Degrees corporate giving and volunteer program, getting buy-in for employee volunteer activities and a company donation match program.
I work in this industry because I want to leave a legacy.
Special skills & expertise
|Skilled in building community support for renewable energy||Proven ability to manage and motivate teams of seasonal and part-time workers||Creates pilot programs and then takes them to scale||Superpower:
A switch hitter, she is equally skilled at writing, number crunching and relationship building
Watch Kathleen’s video:
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.
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.
- 290 MW of additional renewable energy will be coming on-line by the end of 2019 thanks to the joint collaboration of Apple, Akamai, Etsy and Swiss Re.
- The PJM Gang aggregation is a clear demonstration of how corporate energy buyers of all sizes can successfully purchase renewable energy.
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.