Published on June 7th, 2019 | by Steve Hanley0
LevelTen Raises $20.5 Million, Brokers Starbucks Renewable Energy Deal
June 7th, 2019 by Steve Hanley
Let’s say you are the CEO of MidCap, Inc, a small to medium size business that wants to join the renewable energy revolution but doesn’t know how. Where do you begin? Look in the yellow pages? Do a Google search? Now let’s say you are the CEO of Blustery Skies, a wind and solar power developer. You have a certain amount of renewable energy available, but how do you find customers for it?
LevelTen Energy has the solution. Like brokers in every business, it matches up buyers and sellers so they both get what they want. In return, it gets a piece of the action for itself. Its business model must be working because it has raised over $27 million from investors so far, including $20.5 million recently in a new round of funding.
“Historically, excessive market opacity, cost and risk prevented all but a select group of Fortune 500 buyers from signing utility-scale power purchase agreements. This exclusionary problem is one we’re committed to addressing,” says Bryce Smith, CEO and founder of LevelTen Energy.
The company has developed a price matching and request for proposal automation tool that allows companies to post their own projects and find available projects more efficiently. To date, LevelTen has brokered the acquisition of more than $1 billion worth of renewable energy for clients such as Bloomberg, Cox Enterprises, The Gap, Salesforce, and Workday.
In an e-mail, a spokesperson for LevelTen tells CleanTechnica, “The latest round of $20.5 million will be used to expand its suite of products/services, expand to Europe, and hire more team members both in its Seattle HQ and in Europe.”
The Starbucks Experience
Just last week, LevelTen used its Dynamic Matching tool to arrange a unique renewable energy package for Starbucks — 146 MW of wind and solar that will supply electricity to 3000 stores in the US. According to Green Tech Media, what makes the new project unique is that it aggregates energy from three different renewable energy facilities located in three states — Oklahoma, Texas, and North Carolina — and involving three different grid operators, which is an industry first.
“Starbucks is setting an important precedent in the corporate energy procurement space by demonstrating how a single off-taker can safely and easily procure shares of renewable energy from a variety of new wind and solar projects,” says Smith.
Colin Smith, a senior solar analyst at Wood Mackenzie Power & Renewables, agrees. “As corporations move toward higher and higher standards of sustainability and carbon-neutrality, they’re going to have to do more and more complex deals. This seems to be a good example of that. They obviously thought long and hard about how to structure energy procurement for not just one region or one data center, but for thousands of locations. From that standpoint, it’s pretty unique.”
Patrick Leonard, Starbucks’ energy manager, tells GTM, “Buying renewable energy from multiple projects across the U.S. reflects how we use electricity across our store portfolio. Starbucks’ analysis showed a significant reduction in value at risk from the portfolio approach versus sourcing from any one of the projects in the portfolio. Inherently, diversity of technology, location, and developer should all result in a better balance of risks than picking a single project.”
In the past, technology companies with huge electricity demands such as Google and Facebook have dominated corporate renewables deals. But Leonard says Starbucks’ transaction model “opens the door for many new buyers to cost-effectively source smaller amounts of renewable energy.”
Aggregation that involves multiple suppliers of renewable energy is one of the strengths of the LevelTen Dynamic Matching tool. “Buyers are open to aggregation,” Smith says. “But the details of that have to be solved for them. We allow buyers to buy PPAs from individual assets but we also aggregate buyers using software and data science, where they don’t have to identify other like buyers.”