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Why the right retail energy provider is important for meeting long-term sustainability goals

By Jeff Colvin

According to the U.S. Energy Information Agency's Annual Energy Outlook 2020, renewable energy generation expanded at an annual growth rate of seven percent and has been the fastest-growing energy source in the United States over the past decade. Corporate interest in renewable energy has grown commensurately, yet widespread adoption has remained elusive. Even with declining renewable generation costs and increased pressure from shareholders to demonstrate sustainability progress, many organizations continue to struggle to execute on their sustainability strategies.

The reason is that traditional renewable energy purchase agreements have kept with a rigid structure—including strict commercial terms and accounting requirements that can be prohibitive for companies to adopt. However, the industry is now maturing and experiencing a paradigm shift as a new procurement strategy has been introduced that allows corporations to achieve their sustainability goals through completely customizable packages.

As this new method requires being able to wrap a renewable energy deal into a retail package, most current energy distributors have yet to adopt the strategy, but corporations like Wells Fargo, Cargill, Ardent Mills, and Danone North America are utilizing the right partners to customize their renewable energy plans to achieve both business and sustainability ends.

Wells Fargo - Expanding Its Renewable Energy Purchases

Wells Fargo has a two-pronged renewable energy strategy. The company has fulfilled part one by meeting 100 percent of its annual global electricity requirements with renewable energy since 2017, primarily through the purchase of Renewable Energy Credits (REC). To accomplish the second aspect of its commitment, the company needed to transition to a higher mix of long-term renewable energy contracts and significantly increase deployment of on-site generation to support the development of net-new sources of renewable energy by the close of 2020.

Through structured renewable energy agreements with Shell Energy North America and MP2 Energy, its wholly owned subsidiary, Wells Fargo was able to secure approximately 150,000 megawatt-hours of renewable energy annually. This energy addresses 100 percent of the energy consumption of approximately 1,200 Wells Fargo properties in California and the Mid-Atlantic states, and meets 100 percent of the company's eligible load in California, Delaware, Maryland, New Jersey, Illinois, Ohio, Pennsylvania, and the District of Columbia.

Cargill and Ardent Mills - First Deregulated Physical Renewable Energy Offtakes in North America

Through MP2 Energy, Cargill and Ardent Mills agreed to purchase both renewable energy and RECs from Misae Solar Park LLC for a period of 67 months.

These supply agreements represent Cargill's and Ardent Mills' first deregulated physical renewable energy offtakes in North America and include a specific objective to meet 90 percent of customers' aggregate electric load across all their Texas facilities with renewable energy from a new, location-specific, renewable generation resource. The deals not only meet Cargill's and Ardent Mills' renewable energy requirements, but also will deliver 760,000 MWhs over the life of the agreements and offset 56,000 metric tons of Scope 2 carbon dioxide emissions annually.

Danone North America - Collaborating with Multiple Partners

MP2 Energy was chosen to be the Qualified Scheduling Entity and the Retail Electric Provider for Danone North America, in conjunction with a power purchase agreement (PPA) between Enel Green Power North America and Danone North America.

The PPA enabled an additional 50-MW expansion of Enel's High Lonesome wind farm, located in Texas. MP2 Energy, through a customizable and comprehensive approach, receives the renewable energy from the wind farm, then reliably delivers that energy, matched to fit Danone's unique electricity consumption needs, to Danone's operations in Texas. By doing this, MP2 Energy supports Danone's commitment to advance the deployment of new renewable assets and secure 100 percent of its purchased electricity from renewable sources by 2030.

Given that the field of renewable energy is so diversified, it can be difficult for corporations to decide which type of renewable energy best fits their business model, especially when the traditional structure has been so rigid. To truly make the transition to renewables and sustainable energy use, energy providers need to adopt a more flexible model that allows for customization. Just as no two corporations are the same, energy transactions cannot be a one-size-fits-all. It's time to embrace retail suppliers and the long-term benefits they bring to the industry.

Jeff Colvin is Executive Vice President of Sales, MP2 Energy LLC, a Shell Energy North America subsidiary.

 


Fall 2020