Energy is Not Just About Energy

CHAPTER 4

An energy source for all seasons

Cost is not the only driver of renewables adoption. Resilience matters more than ever: just ask businesses with operations in Texas’s ERCOT region. Corporations know times are changing when it comes to transportation, too. Electric vehicles (EVs) may be outliers today, but over the next five years, many companies will need to be able to charge their own electric fleet or want to offer EV charging to customers or employees. And the accelerating pace of climate change is also driving a growing number of decision-makers to seek non-fossil fuel alternatives.

When companies think about the type of energy they want, solar tops their shopping list, and it is likely to stay there.

Why? It’s affordable, well-suited for on-site deployment, and readily available in off-site solar farms. As for fossil fuels, they will stay part of the mix for the foreseeable future, but companies are likely to continue transitioning away from oil, diesel, or gas power and moving toward renewable energy sources in the next five years. Many have already done so.

Solar is already in the lead

When asked about current energy sources, solar came out as the most used, with 62 percent of decision-makers saying they use solar, followed by oil or diesel fuel at 61 percent and battery storage at 47 percent.

Energy Sources Currently Used

0%

Solar plant

0%

Oil or diesel fuel

0%

Battery storage

What about wind?

While it accounts for a good slice of the renewables markets, it is not top of mind for corporate buyers, with only 19 percent buying offsite wind today. About two-thirds (65 percent) of buyers at smaller companies neither buy wind now nor have any future interest in doing so. For larger companies, however, 31 percent access offsite wind now, and 46 percent want to buy more onsite or offsite wind in the next five years.

Solar was the most mentioned source of on-site energy, with 52 percent of all respondents saying they accessed on-site solar and 19 percent saying they had off-site solar, indicating nearly 10 percent have both on- and off-site solar. Over a third (35 percent) of companies surveyed plan on adding solar power to their energy portfolios in the next five years. In terms of on-site power, 52 percent of all respondents said they accessed on-site solar, followed by fuel facilities and battery storage, both at 38 percent.

Current Energy Facility Access

Among total respondents

On Site

Off Site

Solar plant

0%
0%

Oil or diesel fuel

0%
0%

Battery storage

0%
0%

Electric vehicle (car, truck, etc.) charging point

0%
0%

Heat storage

0%
0%

Five-Year Planned Procurement

Looking at procurement for the next five years, EV charging points were most commonly cited, with almost half of all companies planning to have them installed (46 percent). This aligns with the federal government's focus on building out EV infrastructure and fleet owners’ rising interest in converting at least some parts of their fleets to EVs.

The demand for batteries aligns with findings elsewhere in the report about the desire to be immune to power outages. Almost half, 47 percent, of respondents said they already used battery storage, and 29 percent planned to add battery storage capacity to their energy system in the next five years.

Vehicle charging points

0%

Solar plant

0%

Battery storage

0%

Most renewable purchases are through suppliers

Energy buyers make decisions about not only the type of renewable energy source but also the way in which they purchase it. The options range from owning assets directly to purchasing through an independent power producer (IPP) or a community clean energy (CCE) provider. The structure of the purchase can be a PPA or renewable energy certificates (RECs). Energy purchasers said they were most likely to purchase renewable energy through an IPP or CCE provider, preferring remote sources to owning the asset themselves.

More than half (51 percent) of those surveyed said they procured renewable energy through IPPs or CCEs, with 57 percent saying they planned on doing so in the future. On-site-owned was the second most likely way power was accessed. When it came to PPAs, off-site PPAs were more common than on-site PPAs, especially once off-site virtual PPAs were also considered.

Industry Point of View

Mike Danielson

Vice President of BayWa r.e. Solar Projects LLC

Mike is the Vice President of BayWa r.e. Solar Projects, a leading developer of utility-scale solar projects in North America.

“Several leading corporate buyers of renewable energy are transitioning from annual energy procurement targets to hourly matching of load to supply. This transition is being motivated by the urgent need to accelerate to sustainable business models and batteries are a critical enabling technology for this matching. Matching electricity load to carbon-free energy supply produces economic signals for technologies that are mandatory for achieving our climate goals. And the need for that matching is driving the development of new products that help energy buyers or provide additional insight, such as technologies that measure the hourly carbon reduction of renewable energy projects.”

Key Takeaways


Solar tops the charts among renewable or other energy options, whether it’s off-site or on-site. As for where to buy the energy, distance makes the heart grow fonder: energy decision-makers prefer buying renewable energy from off-site power plants owned by IPPs or CCEs. But ownership of on-site generation assets is still popular, as well as on-site and off-site physical plant PPAs. Today’s wide range of energy products gives corporate energy buyers the tools needed to take an active role in rapidly accelerating deployment to meet global climate goals.

The way energy buyers look at energy is changing, and resilience is rising from “nice to have” to “must have” for many companies. With the Texas grid crisis and East Coast pipeline shutdown fresh in everyone’s minds, energy buyers’ decisions about on-site versus off-site energy generation and storage have become critical. It is more than an energy decision: it is a business continuity decision. This means inviting more people to the table to ensure a full understanding of the business, legal and insurance risks related to supply outages, and thinking about more than just the cost of energy. Buyers also need to think about the environmental and societal costs of not transitioning to clean energy. It’s no longer a question of “when”—the time is now.

Moreover, energy providers need to think holistically about their offerings, ensuring they can meet these evolving demands and help customers balance between on- and off-site sources and between generation and storage.

Chapter 5: Strategy and Sourcing: Energy-Buying Roles