Taking Renewable Energy Procurement to the Next Level

Article by Tom Flanagan

I recently had the opportunity to attend the Smart Energy Decisions (SED) Spring 2018 Renewable Sourcing Forum in Rancho Bernardo, California. The forum brings together retail customers, renewable developers and intermediaries who share an interest in advancing renewable energy procurement in an ever-changing wholesale and retail energy environment.

A common question that arose at this conference, along with other seminars I have attended recently sums up the current state of the renewable energy market: “What needs to be done to make offsite renewable transactions simpler and easier to scale? How can these advancements bring the renewable energy industry to the next level?”

Here are three approaches that industry professionals are using to help answer this questions.

1. Communicate Goals and Associated Risks Clearly

While the virtual or financial Power Purchase Agreement (PPA) has dominated the market to-date, many companies are now realizing that they may not have fully understood the risks associated with taking on a fixed price position in the wholesale energy market. The ability to price risk in any transaction is so increasingly important when transacting on a long-term basis.

2. Find the Right Aggregation Model

The main theme of the 2018 Spring SED Renewable Sourcing forum was collaboration. Corporate buyers, utilities, developers and intermediaries are still searching for a repeatable aggregation model to allow buyers of all sizes to participate. This is easier said than done, given the complexities around volumes, tenor, credit, financing, common contracts and risk tolerance amongst both buyers and sellers of renewable energy.

3. Take Renewables to the Next Level

Advocating for more green tariffs needs to be prevalent in both regulated markets and competitive states. Purchasing renewables through a simple, risk managed physical retail supply contract is really what the market needs to take renewable procurement to the next level.

Constellation will continue to play in active role in attending renewable conferences, as it is important to stay in front of the evolving renewable landscape. I look forward to further discussions about solutions being created to address renewable demands from the market.