Author: 3Degrees Staff

At 3Degrees, we make it possible for businesses and their customers to take urgent action on climate change— providing renewable energy and carbon offset solutions to Fortune 500 companies, utilities, universities, green building firms and other organizations that are working to make their operations more sustainable. And as a certified B Corporation and eight-time winner of the EPA Green Power Supplier of the Year award, we’re primed to deliver custom clean power solutions that will help each organization make an environmental impact. Founded in 2007, 3Degrees is headquartered in San Francisco, California, with offices across the United States.

The Strategic Value of Voluntary Renewable Programs for Gas Utilities (webinar)

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Gas utility leaders can get a broad understanding of voluntary renewable programs in this webinar, featuring 3Degrees’ Amanda Mortlock and Center for Resource Solutions’ Rachael Terada.

The panelists discussed various program approaches including renewable natural gas and carbon offsets, strategic value for utilities with a well-designed program – including case studies from three major gas utility programs, and the latest on development of Green-e® certification standards for RNG.

View the webinar

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How Verisk is Successfully Addressing Emissions from its International Energy Load

Sunset with transmission towers

verisk challengesVerisk is a leading data analytics provider with a focus on the insurance, energy, and financial services industries. Since several of the company’s business lines involve analysis of the effects of climate change, Verisk is highly attuned to the urgency of this challenge and has a strong commitment to environmentally responsible business practices. In 2017, Verisk approached 3Degrees to help it develop and execute a plan to address its global greenhouse gas (GHG) emissions through investments in energy attribute certificates and carbon offsets.

Challenges

Though the company is headquartered in New Jersey, Verisk’s energy load is heavily decentralized among offices in approximately 20 countries. The offices are leased not owned, often relatively small, and frequently situated in multi-tenant buildings, which makes it very difficult to address renewable energy needs directly. To add a layer of complexity, several of the company’s international locations are in markets with very limited, or newly developing, renewable energy instrument options. Finally, Verisk saw that a renewable energy purchasing commitment was consistent with the expectations of its stakeholders, and had the potential to positively influence employee job satisfaction, retention, and attraction. To strengthen this connection to employees, Verisk specifically requested that at least some of the projects be located in places where many of its 7,000+ employees would appreciate the connection.

3Degrees was undaunted by these criteria. With extensive experience navigating global energy markets and tailoring solutions to fit our clients’ specific needs, we were confident we could craft a high quality, cost-competitive renewable energy purchasing plan to achieve Verisk’s goals.

How we helped

We began by conducting an in-depth assessment of all available EACs in each market where Verisk’s various businesses have load. Because many of these markets offered limited or new, and therefore less familiar, options, 3Degrees performed detailed due diligence down to the project level.

After assessing the best options in each market that balanced cost with quality, we were able to propose and transact on a diversified portfolio approach of EACs and carbon offsets (when renewable energy was unavailable or did not make strategic sense in a market) that allowed Verisk to address its electricity emissions in each of the following countries:

Verisk world map

Results

By executing a portfolio of high quality EACs and carbon offsets, Verisk achieved its goal of supporting renewable energy in the areas around the world where it conducts business and where the vast majority of its employees live and work. Importantly, this investment also enabled the company to demonstrate its commitment to climate action to its stakeholders, including its employees. Verisk has now made this commitment for five years (2017-2021), and expects to continue exploring renewable energy options beyond that.

“We were happy to work with 3Degrees to create a portfolio of EACs and carbon offsets to address our electricity emissions around the world. Given our decentralized footprint, it was important to us that we work with an experienced advisor. The team was highly knowledgeable and we felt very comfortable with the recommendations they proposed.”

— Pat McLaughlin, Senior VP and Chief Sustainability Officer, Verisk

How Mondelēz International is Achieving an Ambitious Goal to Reduce its Global Greenhouse Gas Emissions

Roadrunner-construction

Photo: Enel Green Power North America’s Roadrunner project

In 2015, food and beverage giant Mondelēz International set an ambitious goal to reduce its absolute greenhouse gas emissions versus a historic base year in each of its four global operating regions. The company had already made good progress through energy efficiency and other on-site solutions, but these actions alone were not going to be enough to reach its aggressive emissions reduction goal. It needed to invest in additional initiatives in order to close the gap.

To help guide its efforts, Mondelēz International enlisted 3Degrees to conduct an in-depth renewable energy strategy assessment and deliver a global roadmap to achieve the company’s goal, as well as support any resulting implementation work.

Challenges

Mondelēz International had outlined two important criteria:

  1. The company was interested in impact;
  2. There was a strong preference for cost-neutral, or cost-positive, solutions.

After an intensive assessment, 3Degrees presented Mondelēz International with the global strategy roadmap and, within it, highlighted a variety of renewable energy pathways that would meet both of the defined criteria. After reviewing all of the options, there was clearly one solution that was best suited to meet the company’s goals: a virtual power purchase agreement (VPPA) for renewable energy from a new project. 3Degrees quickly got to work to begin the next phase of implementation.

Mondelēz International was interested in impact with a strong preference for cost-neutral, or cost-positive, solutions.

How we helped

To kick off the implementation, we issued an RFP to find the most attractive VPPA for Mondelēz International. By the end of the response period, 48 developers had submitted proposals for a total of 126 projects. 3Degrees carefully vetted each one of these projects, which included:

  • Performing a full qualitative analysis of developer qualifications, which leveraged 3Degrees’ in-house knowledge of the renewable energy developer community;
  • Creating a project evaluation scorecard to gauge each project in terms of project development risk metrics, including permitting, interconnection, financing, and others;
  • Conducting a deep quantitative analysis to select the project that would offer Mondelēz International the best long-term value, while limiting any potential downside.

At the end of the extensive analysis process, 3Degrees recommended Enel Green Power North America’s Roadrunner project, a new 497MW solar farm in Texas, which best met Mondelēz International’s need for an impactful and cost-competitive solution. We then helped the team at Mondelēz International navigate its broad, global executive stakeholder network to gain the necessary alignment and approvals to proceed with the project.

Results

  • Mondelēz International signed a twelve-year virtual power purchase agreement (VPPA) under which the company will purchase the energy delivered to the electricity grid from a 65 MW portion of Enel Green Power North America’s Roadrunner project.
  • The VPPA is Mondelēz International’s largest renewable energy transaction at a global level and its first renewable energy PPA signed in the U.S.
  • The transaction enables Mondelēz International to make substantial progress against its sustainability goals by reducing 80,000 metric tons of carbon dioxide emissions – that’s 5 percent of the company’s global manufacturing emissions.
  • The VPPA will help pave the way for subsequent renewable energy procurements of any kind to help achieve Mondelēz International’s long-term sustainability goals.

“The signing of this VPPA is a major advancement towards achieving our aggressive global emissions reduction goals. We are thrilled about this partnership with Enel Green Power North America to help bring new renewable generation online, and appreciate 3Degrees’ strategic guidance and implementation support that helped make this transaction possible.”

–Erika Schunk Vasconcellos, Global Environmental Manager, Mondelēz International

 

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

Wind turbines in the field at dusk

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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.