Last month, my colleague, Dan Kosiak, and I attended Companies vs. Climate Change (CvCC) in Miami, FL. Now in its second year, the conference strives to bring companies together to create business-driven solutions to the climate crisis. 3Degrees had the distinct pleasure of serving as a premiere sponsor of the event.
This year, organizations of all sizes convened to discuss how to work collaboratively to address climate change. The audience was an energizing mix of people from the worlds of corporate and institutional sustainability, policy, consulting, and more, with an interesting blend of perspectives from global, local, governmental and the private sector. One of the most interesting aspects of the conference was the real-world stories and deep-dive examples that attendees from each of these unique groups brought to the table. Many of the sessions focused on how organizations are tackling climate change from different angles – each sector with its own unique challenges, focuses and potential solutions. Despite the wide range of approaches, the common thread among the organizations was their shared passion to figure out the most impactful way they could address climate change.
On the second day of the conference, Dan and I had the opportunity to lead a session focused primarily on the concept of ‘VPPA Readiness’. The session served as a workshop for renewable energy buyers to determine if a VPPA made sense for their organization, and was centered around a few key areas:
Understanding the renewable energy market landscape and how a VPPA fits in:
- Current trends in the renewable energy market show that the demand for voluntary VPPAs has more than doubled in recent years. In fact, corporate power purchase agreements now account for about ¼ of total global renewable electricity sourced. In spite of this aggressive growth, it is still important to note that PPAs and VPPAs are not the only tools in the GHG reduction toolkit and are not advisable for all buyers.
The primary benefits, considerations and challenges that face voluntary corporate buyers:
- There are clear benefits, as well as risks and challenges when executing this type of long-term renewable energy purchase. Corporate buyers must determine their inherent risk tolerance. In the ‘pros’ column, VPPAs require no capital investment and provide a clear and positive environmental impact; however, committing to a 12-15 year investment with fluctuating market value may leave some feeling financially exposed.
Implementation examples, tips and best practices:
- In an effort to provide real-world examples and practical guidance, Dan and I guided the audience through a recent VPPA Aggregation supported by 3Degrees and executed by Apple, Akamai, Etsy and Swiss Re. A deal this complex emphasized the need for established leadership, commitment to timelines and a shared idea of goals and success. Each of the participating companies demonstrated key maturity attributes and achieved certain milestones in order to be in the position to execute on the VPPA.
I was inspired by the audience’s very apparent interest in VPPAs and how they can be incorporated into sustainability strategies. However, the challenges around understanding how these transactions work, their implied benefits, how to define success and why to do it is undeniably real – especially given the many available, and sometimes conflicting, sources of information on the topic. The good news is, as increasing numbers of PPAs are executed and more projects start to come online, the path will become more worn and answers to these difficult questions will become more evident.
As we departed this year’s Companies vs. Climate Change, I left feeling inspired by how effectively corporations can work together, learn from each other, and guide one another toward making real impact in the fight against climate change. Thank you to the team who makes this important conference possible; we’ll be back next year!