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When adopting a renewable energy strategy, here are four considerations all executives should keep in mind that will streamline the process and ensure their end results achieve their sustainability goals.
Renewable energy procurement can be complex without the proper partner to walk
you through the process. Similar to how businesses vary from one another, so
will their clean energy needs and goals which means energy transition strategies
cannot be one-size-fits-all. Shell Energy works hand-in-hand with customers to
create highly customizable plans to achieve their sustainability goals, guiding
them towards the structured products, efficiency services, and demand response
options that are the right fit for them.
Given that the field of renewable energy is so diversified, executives who are
starting from square one can often be overwhelmed when defining a comprehensive
strategy for energy
Fortunately, the industry is maturing and experiencing a paradigm shift, where
many of the previous barriers of adoption no longer exist. When adopting a
renewable energy strategy, here are four considerations all executives should
keep in mind that will streamline the process and ensure their end results
achieve their sustainability goals.
When beginning on the renewable energy
it is important to first establish a set of sustainability goals and a budget —
as this will not be a one-size-fits-all type of strategy.
Understandably, when it comes to adoption of renewable energy, larger
corporations have had innate advantages — from being able to work directly with
energy developers to bigger budgets and commitment to long-term packages, which
were traditionally 10-year contracts. With technology continuing to advance and
new players in the space, such as retail suppliers changing traditional energy
deals, small and mid-sized corporations no longer need to worry about breaking
the bank to adopt a strategy.
Now there are customizable solutions at all budget ranges, with contracts for as
little as five years. By working with a retail
smaller corporations can also now negotiate to fund part of the project — which
is a boost to their sustainability portfolio.
There are different regulations from state to state, and on federal and global
levels; and it’s important to be aware of each when developing a clean energy
strategy. Thankfully, the onus of understanding the energy regulations of every
market no longer falls on corporations, but rather their retail supplier
partner. As retail suppliers are fully ingrained in the industry, their
comprehension of cross-border regulations is more in-depth; and the
responsibility falls to them to thoroughly explain each applicable mandate to
As executives dive deeper into the planning stages of their renewable energy
strategy, an aspect that often comes up is whether to utilize on-site or
off-site energy, which is simply another way to describe where the energy is
being produced (at the actual corporate building or at a grid-scale generator).
Not surprisingly, this is one of the easier decisions to make as adopting
on-site energy addresses a specific set of needs.
With on-site energy, one of the most important factors will be space. Since it
will most likely require the installation of solar panels to generate the
energy, corporations need to evaluate the available space they can designate on
areas such as rooftops or a car park. Along with the amount of space available,
it also comes down to what can feasibly be generated on-site, compared to the
corporation’s overall energy load. For example, a corporation with five acres of
land to commit for solar panel installation located in a region with low levels
of sunshine may find it more cost efficient to utilize off-site options.
Traditionally, virtual power purchase
(VPPAs) have been a popular option for energy buyers. However, VPPAs are
complicated undertakings for companies; and depending on the terms, can
ultimately be counterproductive to achieving a corporation’s goal. This is
because VPPAs typically expose customers to an hourly market — with the fixed
price of the VPPA being compared against the real-time energy market price,
which may not directly tie to what the corporation is paying for energy.
Instead, the corporation is paying for energy with its local utility or
third-party supplier, thereby potentially increasing the overall energy price to
the corporation when netting the difference.
However, with the landscape shifting, the industry is now seeing an evolution in
the types of deals available — such as retail-delivered renewable PPAs.
Similar to a VPPA, corporations are offered a fixed price for energy; however,
the benefit is that the retail supplier will then absorb the risk in potential
price fluctuations that can occur as a result of a real-time market.
Additionally, retail-delivered renewable PPAs are eco-friendly because of the
sources of the electricity; and their structure enables the development of new
With the addition of retail suppliers into the energy distribution chain,
corporations of all sizes now have a resource that can educate them on the
nuances of the industry and secure a renewable energy deal that best fits their
As the landscape continues to change, choosing the perfect industry partner is
becoming essential to understanding this complex space. It is important to
evaluate all available options and ensure that any potential partnership helps
you achieve your pre-determined sustainability goals. Whether this partner ends
up being a retail supplier or working directly with an energy developer, the old
barriers for adoption are now dropping and corporate partners have more power
than ever before.
Published Sep 30, 2020 8am EDT / 5am PDT / 1pm BST / 2pm CEST
Patrick Scott is Senior Originator at Shell Energy North America.
This article, produced in cooperation with the Sustainable Brands editorial team, has been paid for by one of our sponsors.