Author: gbromaghim


Many electricity consumers, including corporate buyers, are often uncertain about what it means to purchase a “renewable electricity” product.

How to buy real green energy

As explained below, one way to avoid confusion is to buy green power from a supplier, such as RPD, that (1) has a direct business relationship with a wind or solar generator; and (2) has created a contractual path across the electricity grid to the end user for that generator’s physical power and associated environmental credits. Given the physics of the power grid, this is the only way for end users to be certain that their money is actually benefiting a chosen off-site renewable facility and their electricity spend is having a direct impact, putting more renewable power on the grid.

This type of verifiable renewable electricity product — a product that is based on a direct contract path between a specific generator and the consumer — avoids confusion. It is also easier to explain this kind of purchase to employees, customers and the media and, thus to enhance the buyer’s green reputation. That is not the case, however, with many other so-called “renewable electricity” products.

Know the product: RECs are not the same as energy

As shown by a recent consumer fraud investigation by the Illinois Attorney General, many alternative electricity suppliers do not actually source physical green power to back up their “renewable electricity” claims. Moreover, in the Illinois case, the retailer investigated by the state’s consumer fraud office falsely advertised that its green product was generated exclusively from renewable energy sources. But, according to investigators, the electricity provided actually came “from a variety of sources from the electric grid” and was then “paired with the purchase of renewable energy certificates (RECs) – which represent proof that one megawatt-hour (MWh) of electricity was generated [for each REC] from a renewable energy source.”

In other words, Illinois consumers who thought they were exclusively buying wind or solar power were actually getting resold grid power (which may have included fossil fuel or nuclear power), together with RECs (which may not have even been produced by a generator feeding the Illinois grid).

The Illinois investigation was primarily concerned with consumer fraud — namely, the failure of the retailer to accurately disclose the source of its “renewable electricity” product. State officials later conceded that because an “energy source cannot be traced once the electricity has been added to the grid”, an electricity product that consists of grid power plus grid related RECs may still be marketed as “renewable electricity”, provided that the retailer plainly discloses the product’s composition. (Click here for the state’s voluntary agreement with the retailer.)

There is a better approach: Follow the money

We think that Illinois officials may have conceded too much. While it is true that the laws of physics do not allow one to track the path of electrons across a large electric grid from a renewable facility to the end-consumer, one can track the ownership of the power via the associated contracts and financial flows. These contracts cover the rights to the physical power as well as the associated RECs.

Given the above, RPD believes that when it comes to determining whether a product for off-site wind or solar power is really “renewable electricity” or not, it is logical to look at the physical power itself. Who owns it? Is there a contract path between the renewable producer and the ultimate consumer for both the electricity and the associated RECs ?

Moreover, because the dollar value of the physical electricity itself is typically 95% or more of the total contract price, we think the contract for the electricity should be the key to determining whether a product truly deserves to be defined as “renewable electricity”. In short, follow the money. After all, you want to know that your purchase is actually benefiting a specific renewable generator and providing an off take market for their power as well as the RECs as the best way to promote and support the market adoption of renewable energy.

Summing up: Choose real renewable power

So here is the main take away from this post: Whether you are a corporate buyer trying to green your own supply or a retailer looking to source power for a mass market renewable product, RPD can help you avoid confusion.

We only represent physical renewable electricity that is dedicated to the grid, on behalf of a customer, from specific wind or solar generators. In addition, unless otherwise agreed by a customer, this power is bundled with RECs that are produced from the same dedicated renewable sources during the same time period, making them concurrent with the customer’s consumption.

Thus, each month, every MWh consumed is matched with the concurrent RECs and the underlying physical power delivered to the grid by the chosen renewable generator. And that generator is dedicated to supporting the customer’s load for the entire contract term. That’s what we call real renewable electricity.

To learn how RPD’s real and verifiable renewable electricity products can help your business, please contact our sales team.

California often provides a window on the future. The energy sector is no exception.

Learning from California

During the last year, a new breed of California power company has begun to attract a growing volume of business because it offers customers more green power, and often at lower prices than local utilities charge for a browner electricity mix from the regional grid.

The new companies are known as community choice providers and they have been created by over 25 cities and four counties. Based on California’s enabling legislation, these companies can directly source power on a wholesale basis on behalf of local users, very much like Renewable Power Direct.

Most importantly, perhaps, the community choice providers can offer up to 100% green power because they are authorized to create an independent electricity supply chain — buying power wholesale from renewable generators in California, typically based on competitive RFPs, and then reselling the power, primarily to local residential and small business customers.

That’s essentially how RPD works too. As with California’s community choice companies, RPD also sources its own wholesale power for users by directly contracting with renewable generators; the power is then resold to commercial and industrial consumers connected to the same electric grid.

Green choices for business

We think this new type of electric supply chain will get more and more popular with business users, much like community choice in California. It provides a practical way for large consumers to green their power supply because it simply changes the mix of energy supplied at the wholesale level. No infrastructure changes are needed. See, for example, the schematic provided below from San Francisco’s new choice provider.

In California, choice providers partner with the local utility to handle retail distribution and customer billing. Likewise, RPD partners with retail electric companies, such as XOOM Energy, to complete its new supply chain. However, customers can also keep their existing retail service provider if they wish.

Renewable choice is growing

Over the last few years, California’s community choice companies have added tens of thousands of customers. They have also contracted for over 200 MW of solar, wind and geothermal facilities. The success of community choice has prompted more and more cities, including San Jose and San Diego, to start creating community choice providers for their residents as well.

That’s good news for California consumers and good news for RPD because it underscores the benefits of the independent wholesale supply chain underlying both clean power initiatives.

California’s choice providers aggregate the energy demand of their local customers in order to bargain for lower wholesale rates and greener power. RPD can do the same by aggregating a corporation’s demand across various load centers. It can also pool the demand of several businesses served by the same electric grid.

Getting renewable energy where you work

So think of RPD as a community choice program for the business community. But, your business need not be in California to take advantage of the program. We’re bringing the future to the rest of America. RPD’s electric choice program is available today throughout the mid-Atlantic, New England and Texas.

Please contact us if you would like to learn how RPD can meet your needs. More information about California’s choice program can be found here.

CleanPowerSF_how it works

Source: Clean Power San Francisco. Customers can also choose a “SuperGreen” 100 percent renewable service for a small premium.

Read full press release on Businesswire

Iron Mountain Incorporated (NYSE: IRM), the storage and information management company, began to power a segment of its New Jersey and Pennsylvania operations with local wind energy in March under a new supply agreement arranged by Renewable Power Direct (RPD), the national green power marketer. Under the agreement, Leeward Renewable Energy, through its Jersey-Atlantic Wind (JAW) generating facility, will be the source of physical power to cover a portion of Iron Mountain’s electric load and advance corporate sustainability goals.

“The power purchase that RPD sourced will assist Iron Mountain in meeting its goals under the EPA’s Green Power Partnership,” said Kevin Hagen, Director of Corporate Responsibility for Iron Mountain. “We’re pleased to help pioneer this new product offer from RPD. They are giving us a practical way to buy the green electricity for our immediate needs in the right quantity, at the right time, in the right place and at the right price to help us meet our financial and environmental goals. This is a key objective for us as we address our immediate priorities for sustainability while continuing to invest in longer-term strategies for the future.”

“Iron Mountain is helping corporate America implement new models for switching to renewable energy,” said Gregory C. Staple, Chairman of RPD. “RPD pioneered medium-term energy purchasing options, so that any business can benefit from directly buying green power. As Iron Mountain has shown, RPD’s contracts can also be a great complement to a company’s longer term power purchase agreements,” said Staple. “We expect RPD’s approach will grow the demand for renewable power across the business spectrum.”

As we have highlighted in previous posts, corporate renewable power transactions have become a large force in driving investment in new wind and solar farms. This momentum is only continuing to build, with transactions from companies like 3M, Lockheed Martin, Salesforce and Steelcase already among those announced in 2016.

While the importance of these deals has become better recognized within the industry, they are now finally starting to generate the national attention they deserve. In the past week, articles have appeared in both the Wall Street Journal (Companies Go Green on Their Own Steam) and National Geographic (These Old-School Companies Are Going Big With Solar and Wind).

New initiatives like the Go 100% RE campaign show that the push for cleaner power will not be slowing anytime soon. RPD is proud to be able to provide businesses of all sizes with access to the benefits of direct green power purchases.