By Steve Hanley
Corporate and large organizational commitments to buy clean energy have skyrocketed the last few years, from 2.4 GW in 2016 to 13.6 GW in 2019¹. In fact, the future of the industry itself is guided by many of the world’s most influential companies and how they are shaping the purchase, development, and management of clean energy on the grid. As founders of the clean energy software leader HST*, Rudy Roy and Santanov Chaudhuri are on the forefront of scaling the energy industry faster as it moves swiftly to digitization, decarbonization, and direct purchasing. They believe that digitizing matchmaking between large enterprises, insurers, project investors, and project developers accelerates the burgeoning market of corporate purchases of clean energy.
Corporations, utilities, governments, and other large-scale energy consumers can use HST’s Cue® platform to source and aggregate their energy needs with other buyers on the platform, leading to the lowest available cost of energy for all.
For major energy buyers, sourcing qualified projects and the structures to procure energy cost-effectively is tremendously complex. Factors including energy price, timing, and location affect the speed that project developers and energy buyers can transact within the corporate Power Purchase Agreement (PPA) market. All the intricacy of these processes is vastly simplified with the application of cloud software. Corporate energy buyers can specify how much energy they want, when they want it, how far away from their buildings they want the projects, and how much they pay now for energy supply. That information triggers search algorithms on Cue® to find the optimal project in development that meets the customer’s needs. Buyers get the energy characteristics that they want, and project developers get the price, data analysis, and contracted volume that they want. Using this marketplace, the energy buyer has the best possible set of projects to purchase cost-effective, optimized electrons to meet its carbon reduction goals.
Clean energy developers that use HST’s View® platform can connect with these buyers, achieving higher returns on their project investments with lower risk. Now, for the first time, HST offers its clients tools to include battery storage modeling in their analysis of proposed projects. For Roy and Chaudhuri, the goal is to foster a frictionless marketplace that supplies clean energy at the lowest cost and with the least risk.
Search Technology for Development and Origination
Developing clean energy projects that sell energy through PPAs requires a complex analysis to select the best site with the most favorable topographic factors. A developer has to do all of this while taking into consideration how the facility will be configured electrically, and what combination of hardware (including racking systems, solar panels and inverters) will yield the lowest Levelized Cost of Energy (LCOE). If grid-scale battery storage is to be included, that adds additional factors that project developers must take into consideration. Finally, decisions must be made about the best way to finance the project and how to originate and structure PPAs with energy buyers.
Without the aid of the View® platform, it could take a team of humans more than 100 years to manually search through the billions of development possibilities that any plot of land presents. Unique spacing of the rows of solar panels or tweaks to the project size in combination with specific solar module, inverter, and battery choices are the keys to offering a corporate client the lowest cost of energy to generate another successful PPA arrangement. The proprietary search engine finds the financially best configuration to use in minutes. For corporate energy buyers who need to focus both on financial and environmental goals, this provides an enhanced marketplace solution that guides them to the best PPAs with the most competitive energy prices.
View® now brings DC-coupled storage modeling to the developer toolkit to introduce a new layer of functionality whereby buyers and sellers can agree on shaped energy profiles. Storage is particularly useful for deploying extended windows of hourly-matching techniques, expanding the window during which clean energy can be offered to the buyer. Determining the ideal size for storage using search, HST allows the electricity markets to function smoothly by making energy dispatchable. By selling energy to the grid when prices are high and charging batteries when prices are low (with dispatch schedules being optimized by View®), corporations can also profit from energy price arbitrage. “With 600 GW of global project modeling track record in 100 countries, we are excited to roll out advanced storage modeling to bring the energy markets optimized storage sizing and dispatch schedules,” says CEO Rudy Roy.
Adding Search to Energy Procurement
But there is still more to the process. HST’s marketplace approach enables businesses to send project developers demand signals to tell them where to build their new, customized projects. Today this is important because many businesses want “additionality” when they purchase energy from projects — that is, they want the ability to show that they were the reason that additional clean energy was added to the grid. Businesses want to be the key catalyst for the next wave of projects that transition the energy grid, and HST is a key pathway for this.
Roy and Chaudhuri believe renewable energy will be the primary source of electricity available on the utility grid in the future, and see software as a key to making that happen. Unlike other marketplaces that don’t deploy search technology, HST offers energy buyers and developers the most sophisticated platform for clean energy planning and transactions available.
As global corporations seek new financial strategies to outperform their competitors, more will begin switching to wholesale procurement. Wholesale procurement gives companies more say as to how the clean energy that they enable will be priced, located, and even designed. It allows access to predictable long-term low energy prices that are the cornerstone of a high-performance strategy. Companies successfully engaging in wholesale procurement of this nature set best practices for how businesses can serve as active leaders in the sustainability movement. Ultimately, this opens doors for smaller companies to repeat the success of larger corporations that paved the shift to clean energy, accelerating the global Energy Transition to a cleaner grid with less friction, more transparency, and healthier markets.
- Source: https://www.statista.com/statistics/790404/us-corporate-ppas-capacity/
*This post is supported by HST.
All images provided by HST.
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