Navigate Shifting Dynamics in the Global Renewable Energy Market

The steady rise in sustainability goals and decarbonization commitments has spurred a transition in the energy market. As a result, the demand for renewable energy is increasing with a great variety of procurement and storage options emerging to meet the demand.

While the expansion of renewable energy is promising, the reality of building and implementing a renewable energy strategy in the face of an ever-changing market can be daunting. Organizations must navigate all that the renewable energy market has to offer to effectively optimize their sustainability strategy. While it may seem challenging, there are key concepts that organizations can use to successfully understand renewable energy solutions and best practices for integrating them into their energy management strategy.

The Basics of Renewable Energy Solutions

The Four Main Renewable Electricity Sourcing Options

Building a renewable energy portfolio that meets an organization’s unique needs is not a one-size-fits-all process; it requires an understanding of the benefits and drawbacks of each energy sourcing option. Once understood, these sourcing options can be used individually or combined to create a comprehensive renewable energy strategy.

1. Unbundled Energy Attribute Certificates (EACs) allow the renewable energy seller to sell the EAC independently from the original energy output to a third party. This asset is easy for corporate buyers to procure but pricing can lack transparency.
2. Green Supply or Green Tariffs provide bundled delivery of electricity and EACs and is often considered to be of a higher quality than unbundled renewable energy credits (RECs) because they come from a dedicated, identifiable resource.
3. Corporate Power Purchase Agreements (PPAs) allow a business to purchase energy directly from a generator under a long-term contract and often make projects more bankable for organizations.
4. Onsite Renewables or direct investments are self-owned resources, such as solar and wind, that are generated on the project site and provide an alternative to relying on the grid for energy.

Maturing of Renewable Electricity Mix Over Time

Regulated vs. Deregulated Energy Markets

Energy procurement comes with an assortment of policies and regulations at the federal, state and local levels that can vary depending on the type of energy market in the area. States can either have a regulated market, deregulated market, or some combination of the two. Deregulated energy markets foster an environment of competition among energy suppliers and allow consumers to compare supply rates and contract structures across vendors. While deregulated markets are preferred for building renewable energy strategies, regulated markets still offer access to green power through RECs. Understanding the policy landscape of these markets is critical in the early development process of a renewable energy strategy.

Understanding Energy Storage Systems

The energy market is evolving, and the options for utilizing generated energy are changing with it. A key way this shift is occurring is in the increase of ‘behind the meter’ (BTM) energy systems. Energy systems that are tied to the grid are either located ‘in front of the meter’ or ‘behind the meter’. BTM systems provide direct energy to a site without passing through a meter and reduce the amount of power a site takes from the grid. There are a variety of BTM energy production and storage options that provide greater control over energy use and cost, including solar photovoltaic (PV) panels, wind turbines, biomass, and battery storage. While there can be challenges with utility companies and regulations, the unique benefits of a BTM energy system make it an important option to consider.

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How to Create a Renewable Energy Strategy

Building a successful renewable energy strategy requires thorough insight into the energy market and a keen understanding of your organization’s unique needs and capabilities. The key pillars below provide a starting point for organizations looking to establish or grow their renewable energy strategy.

Know Your Future Energy Demand

Understand energy demand by geography and the regional differences in energy consumption to plan green sourcing in line with business objectives. This visibility helps align renewable energy strategies with decarbonization goals.

Understand Global Trends and Local Markets

Use a top-down approach to prioritize markets and renewable energy options for successful strategy implementation. A top-down approach includes considering the availability of renewable energy sourcing products per country, prices & costs, regulatory constraints, objectives, etc.

Convey a Positive Brand Image

Ensure that the objectives set are achievable in terms of feasibility and budget to maintain brand reputability with stakeholders. Use a bottom-up approach to validate your ambition and the economic and social value of your solutions.

Have the Right People on Board

Engage with internal stakeholders to gain early buy-in and project support at the organization level. Partner with experts to create a comprehensive project roadmap that provides an in-depth understanding of the project requirements and expected results.

The Next Step

As organizations grow, they will need to continuously reassess their strategy to ensure they are moving towards a greater mix of high-quality energy solutions at optimal costs. The development of new technologies, business models, and regulations is empowering organizations to build increasingly sustainable energy management strategies to meet the expectations of the business, the stakeholders, and the environment.