Corporate Green Energy Sourcing

/ ©ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED1
LEONARDO ENERGY WEBINAR
INTRODUCTION TO GREEN
ENERGY SOURCING FOR
INDUSTRIAL CUSTOMERS
14 SEPTEMBER 2017
BENJAMIN MUNZEL

POINTS FOR DISCUSSION
• How can the different options for green energy
sourcing be designed and combined?
• How can the different options be differentiated in
terms of credibility and price?
• What are the implications of the Clean Energy
Package?
• Which steps should industrial consumers follow
to implement credible green energy sourcing?

TABLE OF CONTENTS
Introduction
Green energy sourcing options
Quality and price considerations
Policy and market outlook
Recommendations to industrial consumers
Conclusion

/ ©ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED4 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED44 / ©ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED
AT A GLANCE: ECOFYS, A NAVIGANT COMPANY
Global consulting company founded in 1984 with the mission to enable sustainable
energy for everyone – since 2016, Ecofys has been part of Navigant’s global Energy
practice
We have over 600 experts skilled in energy, climate, environment, economy,
communication, law, and psychology – in 2007, 11 of our experts supporting the
Intergovernmental Panel on Climate Change were awarded the Nobel Prize together with
Al Gore
More than 30 years of experience in developing and evaluating policies, sustainability
strategies, and scenarios for companies and sectors provides us with deep knowledge of
markets and consumer behaviour
Our strength lies in our strategic understanding of complex energy and climate transition
issues: Ecofys connects the dots within the triangle between governments, energy
players, and energy-intensive end-users
Ecofys has five offices in four countries: Utrecht, the Netherlands; Cologne & Berlin,
Germany; Brussels, Belgium; London, United Kingdom – as part of Navigant, our experts
are based in more than 20 offices in the US and Canada, Hong Kong, and the Middle
East
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JOINED FORCES: ECOFYS & NAVIGANT
Energy Product
Manufacturers & Technology
Utilities
Industry & Corporates
Investors
Foundations/NGOs
Government
Climate Change
Mitigation
Energy Security
Customer Demands
& Choice
Together, Ecofys and Navigant help clients navigate the energy transition
Technology
Innovation
Policy & Regulatory Challenges
Market Demand & Technology Change

WHY GREEN ENERGY SOURCING
By delivering the Paris Agreement, COP21
repowered climate action on a global scale.
Limiting global warming to 2° - preferably
1.5° - is now the new set target. Energy
supply causes ¼ of global GHG emissions.
An increasing number of industrial
companies is joining initiatives to
lower GHG emissions or to increase
shares of renewables in energy
supply, such as RE100, CDP etc.
While retail energy prices have been rising for many years,
levelised cost of energy from renewable sources have dropped
drastically. Both trends are expected to continue, leading to
unsubsidized RES competitiveness. Recent auctions resulted in
electricity prices from wind or solar at or below wholesale levels.
Paris
Agreement
Industry
commitment
Cost
effectiveness
1
2
3

GREEN ENERGY SOURCING IS CRUCIAL
Paris
Agreement 1
Sources: [SBT], [EEA]
Energy supply
Transport
Industry
Residential and
commercial
Agriculture
Waste
Aviation
GHG emissions pathway Share of energy supply in EU emissions
30%

MANY COMPANIES ARE ENGAGING IN GREEN ENERGY
Industry
commitment 2
Sources: [SBT], [CDP], [RE100]
5,600 companies
are disclosing their
GHG emissions.
297 companies are
setting individual
targets compatible
with the 2° target.
102 of the world's
most influential
companies
committed to
100% renewable
power.*
* Most plan to achieve this target by 2020. Some have committed for later years (max. 2050). Some are already sourcing 100% green energy.

GREEN ENERGY IS BECOMING COST-EFFECTIVE
Cost
effectiveness 3
Rising retail electricity prices 1 Falling LCOE from RES 2
0
50
100
150
200
250
2008 2009 2010 2011 2012 2013 2014 2015
Electricityretailprice[€/MWh]
Italy
United Kingdom
Malta
Germany
Cyprus
Ireland
Latvia
Slovakia
Portugal
Belgium
Spain
Greece
Denmark
Lithuania
France
Austria
Hungary
Netherlands
Croatia
Poland
Estonia
Romania
Czech Republic
Slovenia
Finland
Bulgaria
Luxembourg
Sweden
EU average
2.3% annual increase in EU
Sources: [ECa], [Ecofys], [EIA]
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014 2015 2016 2017
Wind Solar
12% 30%
annual decrease
LCOE[€/MWh]
1 industrial consumers 2 global average

WHY GREEN ENERGY SOURCING
Paris
Agreement
Industry
commitment
Cost
effectiveness
1
2
3

TABLE OF CONTENTS
Introduction
Conclusion

3 RENEWABLE ELECTRICITY SOURCING METHODS:
OWNERSHIP AND LOCATION
Location/
Proximity
Ownership
On-siteNear-siteOff-site,
same country
Off-site,
neighbouring
country
Self-owned
Leased
3rd-party owned
(contracted)
3rd-party owned
(retailed)

3 RENEWABLE ELECTRICITY SOURCING METHODS:
OWNERSHIP AND LOCATION
Location/
Proximity
Ownership
On-siteNear-siteOff-site,
same country
Off-site,
neighbouring
country
Self-owned
Leased
3rd-party owned
(contracted)
3rd-party owned
(retailed)
Self-
generation
Power
Purchase
Agreements
Guarantees
of Origin
Google/Apple/…
windfarms

RENEWABLE ELECTRICITY SOURCING METHODS
Self-generation
(on-site or near-site)
Power Purchase
Agreements
Guarantees of Origin
(grey electricity offsetting)
Self-generation with
direct self-consumption
(microgrid)
Self-generation with grid
feed-in and extraction
(net-metering)
PPA with real-time
matching of generation
and consumption
PPA with balanced
consumption over time
Bundled green
power product
Redemption of
unbundled GOs
GO
GO

GREEN ENERGY SELF-GENERATION
Self-generation
(microgrid)
(net-metering)
• Install renewable energy system (e.g. solar panels, wind
turbines) on or near company site.
 Various finance, operating and ownership models with
different risk profiles and tax/levy obligations possible.

Self-generation
(microgrid)
(net-metering)
Either …
• … operate energy system as island/microgrid for direct
self-consumption of generated electricity,
 Requires system flexibility: flexible generation (e.g. biogas
CHP), energy storage (e.g. battery), flexible demand (e.g.
load management).

THE FLEXIBILITY GAP
Share of variable renewable energy sources
Flexibility
Existing supply flex
New supply flex
Storage flex
Demand flex
Flexibility
gap
Self-generation
(microgrid)
(net-metering)

Self-generation
(microgrid)
(net-metering)
Either …
• … operate energy system as island/microgrid for direct
self-consumption of generated electricity,
 Requires system flexibility: flexible generation (e.g. biogas
CHP), energy storage (e.g. battery), flexible demand (e.g.
load management).
… or …
• … connect the system to the grid for balanced green
energy consumption.
 Risk of potential double-claiming needs to be ruled out (in
some countries, mind public financial support and GOs).
 May require bidding in RES auctions (in some countries,
‘grid congestion zones’).

LEAD TIMES FOR RENEWABLE ENERGY SYSTEMS
Self-generation
(microgrid)
(net-metering)
Wind EnergySolar Energy
2
2 months
5 months
2 months
3 months
20 years
Idea
Feasibility
Development
Design, lease,
permits,
commitment
Consent
Financing,
contracting
Construction
Operation
2
6 months
2-3 years
6 months
20-25 years
1.5 years
1year
5years

GREEN POWER PURCHASE AGREEMENTS
Power Purchase
Agreements
PPA with real-time
and consumption
PPA with balanced
• Sign a long-term contract (typically 10+ years) to procure
energy and GOs from a specific off-site renewable energy
project (e.g. wind farm) pre- or post-project development.
 Various terms, participation and pricing models possible but
not in all countries/jurisdictions.
 Some corporates also own or invest in the renewable
generation assets directly.

COMMON PPA DESIGNS
PPA
price
Sleeving
fee
Sleeved /
physical
RE power RE power
RE generator Utility Consumer

COMMON PPA DESIGNS
PPA
price
Sleeving
fee
Sleeved /
physical
Synthetic /
virtual
RE power RE power
Compensation
(PPA price)
Retail
price
Power Power
Market
price
Guarantee
of origin
RE generator Utility Consumer

Power Purchase
Agreements
PPA with real-time
and consumption
PPA with balanced
Either …
• … match generation and consumption at all times,
 Requires flexible demand and/or combination of various
distributed energy resources (virtual power plant).

Power Purchase
Agreements
PPA with real-time
and consumption
PPA with balanced
Either …
• … match generation and consumption at all times,
 Requires flexible demand and/or combination of various
distributed energy resources (virtual power plant).
… or …
• … balance generation and consumption over a specific
period of time.
 Requires good knowledge of (future) power demand.
 Balancing risk outsourced to grid operator.

GUARANTEES OF ORIGIN
Bundled green
power product
Redemption of
unbundled GOs
GO
GO
• Offset non-renewable energy supply through the
redemption of Guarantees of Origin from renewable
energy projects feeding into the public grid.
 1 GO certificate equals 1 MWh of green electricity and is
tradable within the European Energy Certificate System.

GREEN ENERGY TRACKING SYSTEM
Bundled green
power product
Redemption of
unbundled GOs
GO
GO
Green power
generator
Green power
consumer
Public grid
* In some cases this role can also be taken on by the green power generator or consumer.

Bundled green
power product
Redemption of
unbundled GOs
GO
GO
Green power
generator
Issuing body,
registry
Green power
consumer
Public grid
Certificate attributes
• Name of producer
• Technology type
• Year of installation
• Year of production
• Other characteristics
Requests
issuance
of GOs

Bundled green
power product
Redemption of
unbundled GOs
GO
GO
Green power
generator
Issuing body,
registry
Green power
consumer
Utility /
GO retailer*
Public grid
Certificate attributes
• Name of producer
• Technology type
• Year of installation
• Year of production
• Other characteristics
€
€
Acquires
ownership and
redeems GOs
Requests
issuance
of GOs

Bundled green
power product
Redemption of
unbundled GOs
GO
GO
Either …
• … procure bundled GOs from a utility offering a green
power product/green tariff,
 Not all utilities are entirely transparent about origin and
vintage of GOs or provide proof of redemption.

Bundled green
power product
Redemption of
unbundled GOs
GO
GO
Either …
• … procure bundled GOs from a utility offering a green
power product/green tariff,
 Not all utilities are entirely transparent about origin and
vintage of GOs or provide proof of redemption.
… or …
• … procure and redeem GOs unbundled from power
supply contract.
 Requires retailer of GOs or own trading account and
careful choice of renewable energy projects.

GOs MARKET SHARES BY COUNTRY IN 2016
Generation
Source: [AIB]
Consumption
Norway
42%
Switzerland
20%
France
8%
Finland
6%
Germany
4%
Netherlands
4%
Denmark
4%
Italy
3%
Sweden
3%
Austria
2%
Iceland
2%
Ireland
1% Belgium
1%
Norway
15%
Switzerland
5%
France
22%
Finland
3%
Netherlands
24%
Denmark
12%
Sweden
13%
Ireland
2%
Czech Rep
1% Other
3%
Note that generation or use of GOs not necessarily relates to RES shares, but can be an indicator for the demand for green power products.

GOs MARKET SHARES BY TECHNOLOGY IN 2016
Source: [AIB]
Hydro
75%
Wind
9%
Nuclear
7%
Waste
2%
Fuels
1%
Biomass
1%
Geothermal
1% Other
4%
Hydro
64%
Wind
16%
Waste
2%
Biomass
5%
Geothermal
2%
Other
11%
Note that GOs can also expire (12 months after production).
Generation Consumption

RENEWABLE ENERGY TRACKING SYSTEMS WORLDWIDE
GOs
RECs
RECs
I-RECs &
national REC
system under
development
National
solar RECs &
non-solar RECs &
I-RECs & TIGRs
National zaRECs &
I-RECs & TIGRs
I-RECs &
TIGRs
Source: [CDP]
I-RECs &
TIGRs
TIGRs

RENEWABLE ELECTRICITY SOURCING METHODS
Self-generation
Power Purchase
Agreements
(microgrid)
(net-metering)
PPA with real-time
and consumption
PPA with balanced
Bundled green
power product
Redemption of
unbundled GOs
GO
GO

GREEN ENERGY OPTIONS: MARKET SHARES (EUROPE 2015)
GOGO
48%
Unbundled
GOs
47%
Green
power
products
Not
specified
3% PPAs
0.6% Self-generation
0%
25%
50%
75%
100%
Wind
Solar PV
Fuel-cells, bio-power,
hydro, geothermal, …
46%
45%
Source: [RE100]Based on electricity consumed.

TABLE OF CONTENTS
Introduction
Conclusion

6 CREDIBILITY CRITERIA
ELIGIBLE TECHNOLOGIES
ADDITIONALITY
MARKET BOUNDARIES
FACILITY AGE
VINTAGE
CLAIMING INSTRUMENT
The credibility of a green energy sourcing option should be an
indicator for its quality and accountability, its contribution to the
energy transition, and the buyer’s level of ambition.

1. CREDIBILITY CRITERION: CLAIMING INSTRUMENT
CLAIMING INSTRUMENT
A clear ownership structure,
contractual connection or robust
green energy tracking system
should be in place, which rule out
any risks of double-counting or
double-claiming.

2. CREDIBILITY CRITERION: ELIGIBLE TECHNOLOGIES
ELIGIBLE TECHNOLOGIES
Solar and wind resources are
eligible green energy options
without exceptions. For geothermal,
hydro and biomass resources
additional requirements apply (e.g.
ecological and social impacts).
Nuclear energy and high-efficiency
fossil use (CHP, CCGT) are not
considered eligible technologies.

3. CREDIBILITY CRITERION: ADDITIONALITY
ADDITIONALITY
Financial additionality should hold
true and prove that revenues from
the green energy purchase enable
the profitability of a green energy
project. Also, green energy
purchase should stimulate new
projects (investment additionality).

4. CREDIBILITY CRITERION: MARKET BOUNDARIES
MARKET BOUNDARIES
Green energy should be sourced as
locally as possible to take into
account the physical flows and to
relieve grid capacities. Generation
and consumption should take place
preferably in the same province,
country, bidding zone or at least
energy tracking system.
Note: It is unlikely that every consumer is
able to comply with this target in a cost-
efficient system with high shares of RES
including offshore wind and hydro.

5. CREDIBILITY CRITERION: FACILITY AGE
FACILITY AGE
Green energy should be sourced
from projects of young age (below
payback period). High-quality green
power labels exclude facilities older
than 14 years.*
* Assumed payback period.

6. CREDIBILITY CRITERION: VINTAGE
VINTAGE
Generated green electricity should
be consumed or taken off instantly.
While green sourcing is usually
balanced on an annual or monthly
basis, real-time matching and
flexibility provide a much higher
contribution to the energy transition
towards high shares of variable
renewable energy sources.

CREDIBILITY ASSESSMENT (INDICATIVE)
Microgrid
Net-metering
Real-time PPA
Balanced PPA
Green power product
Unbundled GOs
The credibility of a green
energy sourcing option should be
an indicator for its quality and
accountability, its contribution to
the energy transition, and the
buyer’s level of ambition.
Note that most criteria depend on the particular configuration of the green energy supply and on the country.

CREDIBILITY ASSESSMENT (INDICATIVE)
Microgrid
Net-metering
Real-time PPA
Balanced PPA
Green power product
Unbundled GOs
++ depends ++ ++
depends
(++) ++
+ depends ++ +
depends
(+) +
+ depends
depends
(+)
depends
(+)
depends
(+) ++
+ depends
depends
(+)
depends
(o)
depends
(+) +
+ depends
depends
(-)
depends
(-)
depends
(o)
depends
(o)
+ depends
depends
(-)
depends
(-)
depends
(-)
depends
(-)
The credibility of a green
energy sourcing option should be
an indicator for its quality and
accountability, its contribution to
the energy transition, and the
buyer’s level of ambition.
Note that most criteria depend on the particular configuration of the green energy supply and on the country.

PRICE ASSESSMENT (INDICATIVE, CONSUMER PERSPECTIVE)
Microgrid Net-
metering
Real-time
PPA
Balanced
PPA
Green power
product
Unbundled
GOs
RE costs
Solar PV minimum
LCOE ~ 5 ct/kWh
Note that consumer perspective does not take into account economic/social costs on system level.

Microgrid Net-
metering
Real-time
PPA
Balanced
PPA
Green power
product
Unbundled
GOs
RE costs
Additional costs for
flexibility measures
(storage, demand
response)
Solar PV minimum
LCOE ~ 5 ct/kWh
Applicable
taxes/levies
Network
tariffs

Microgrid Net-
metering
Real-time
PPA
Balanced
PPA
Green power
product
Unbundled
GOs
RE costs
(storage, demand
response)
Solar PV minimum
LCOE ~ 5 ct/kWh
Wind minimum
LCOE ~ 3 ct/kWh
Additional costs
for balancing
measures
PPA price
Contractor
premium
Applicable
taxes/levies
Network
tariffs
Taxes/levies
Network
tariffs

Microgrid Net-
metering
Real-time
PPA
Balanced
PPA
Green power
product
Unbundled
GOs
RE costs
(storage, demand
response)
Solar PV minimum
LCOE ~ 5 ct/kWh
Wind minimum
LCOE ~ 3 ct/kWh
Additional costs
for balancing
measures
PPA price
Contractor
premium
Wholesale
power price
Utility
premium
GO price
Nordic hydro min.
0.02 ct/kWh
Retailer
premium
Applicable
taxes/levies
Taxes/levies
Network
tariffs
Network
tariffs
Taxes/levies
Network
tariffs

PRICE VS. CREDIBILITY (INDICATIVE)
Price
Credibility
The credibility of a green energy sourcing option should be an indicator for its quality and
accountability, its contribution to the energy transition, and the buyer’s level of ambition.
Self-
generation
Power
Purchase
Agreements
Guarantees
of Origin
Microgrid
Net-metering
Balanced
PPA
Real-time
PPA
Unbundled
GOs
Green power
products

TABLE OF CONTENTS
Introduction
Conclusion

EC CLEAN ENERGY PACKAGE –
REVISION OF THE RENEWABLE ENERGY DIRECTIVE (RED II)
Source: [ECb]
• “consolidating the functioning of the Guarantees of Origin (GOs) system”
• “extending the system to renewable gas”
• “making the system mandatory for the disclosure of renewable electricity”
• New approach and governance
• No binding national targets
• No sector specific targets
• Indicative EU renewable
electricity target 2030: 50%

POLICY OBJECTIVES FOR RENEWABLE ELECTRICITY
Technology &
project
development
costs
Cost of capital
O&M costs
Electricity sales
GOs sales
LCOE Revenues
Reduce costs
• R&D&I
• Low policy and
investment risk
• Planning reliability
Source: [ECd]

Technology &
project
development
costs
Cost of capital
O&M costs
Electricity sales
GOs sales
LCOE Revenues
Reduce costs
• R&D&I
• Low policy and
investment risk
Increase market
revenues
• Externality pricing
• Balancing and
ancillary services
• System flexibility
• Green power
procurement
Source: [ECd]

Technology &
project
development
costs
Cost of capital
O&M costs
Electricity sales
GOs sales
Support
mechanism
LCOE Revenues
Close financing gap
Reduce costs
• R&D&I
• Low policy and
investment risk
Increase market
revenues
• Balancing and
ancillary services
• Green power
procurement
Source: [ECd]

• Some member states grant producers of renewable electricity both: GOs and subsidies (e.g. feed-in-tariff).
• Some member states grant producers of renewable electricity only GOs or subsidies (e.g. Germany).
Technology &
project
development
costs
Cost of capital
O&M costs
Electricity sales
GOs sales
Support
mechanism
LCOE Revenues
Close financing gap
Reduce costs
• R&D&I
• Low policy and
investment risk
Increase market
revenues
• Balancing and
ancillary services
• Green power
procurement
Source: [ECd]

• Some member states grant producers of renewable electricity both: GOs and subsidies (e.g. feed-in-tariff).
• Some member states grant producers of renewable electricity only GOs or subsidies (e.g. Germany).
 The latter case is proposed to become EU-wide regulation and
 GOs from supported renewable electricity production are proposed
to be issued and auctioned by member states (RED II Art. 19).
Technology &
project
development
costs
Cost of capital
O&M costs
Electricity sales
GOs sales
Support
mechanism
LCOE Revenues
Close financing gap
Reduce costs
• R&D&I
• Low policy and
investment risk
Increase market
revenues
• Balancing and
ancillary services
• Green power
procurement
Source: [ECd]

CLEAN ENERGY PACKAGE PROPOSALS: OVERVIEW
Proposals
RED Article 19 (2): Auctioning of GOs from
supported renewable energy.
Industry stakeholder
comments
Substantial disputable regulatory change of
the diverse renewable energy markets.
Sources: [ECd], [ECe]

CLEAN ENERGY PACKAGE PROPOSALS: OVERVIEW
Proposals
RED Article 19 (2): Auctioning of GOs from
supported renewable energy.
Industry stakeholder
comments
Substantial disputable regulatory change of
the diverse renewable energy markets.
RED Article 4: Open and competitive financial
support for electricity from renewable sources.
Technology-specific support should be
feasible and risk for producers limited.
RED Article 15 (9): Administrative barriers to
long-term PPAs to be removed.
Facilitate local contracting and enable multiple
sourcing models.
RED Articles 21&22: Definition of renewable
self-consumers and communities.
Prevention of disproportionate procedures and
charges for self-consumers.
EMR Article 11 (1): Dispatching non-
discriminatory and market based.
Priority dispatch for renewable energy sources
removed from RED.
EMR Article 12 Curtailment or redispatching
non-discriminatory and market-based
(preferred option).
Principles establishing the ‘last-curtailment of
RES’.
Sources: [ECd], [ECe]

PRICE TRENDS (INDICATIVE)
Unbundled
GOs
Green power
product
Balanced
PPA
Real-time
PPA
Net-
metering
Microgrid
Price
Analysts expect slightly
rising prices for GOs.
Wholesale
prices also
expected to
rise.
LCOE from renewables falling.
But increasing demand and
link to wholesale market.
Flex technologies
expected to
become cost-
effective.
Flex technologies
expected to
become cost-
effective.
LCOE from renewables falling.

WEBINAR ANNOUNCEMENT
Current trends in corporate renewable sourcing:
the producer and the consumer perspective
26 October 2017 @ 15:00 CEST.
Speaker: Malte Gephart (Ecofys)

TABLE OF CONTENTS
Introduction
Conclusion

HOW TO:
PUT TOGETHER A GREEN ENERGY SOURCING STRATEGY
GOAL
• Does the green strategy
follow national or global goals?
• Short-term switch to 100% green
or gradual shift over years?

HOW TO:
GOAL
TIME
FRAME • Does the timeframe allow for
lead times of projects for self-
generation or PPAs?

HOW TO:
BUDGET
GOAL
TIME
FRAME
• Capex vs. Opex
• Does finance department
demand max. payback period?
• Invest into own plant or pay
supplier/contractor?
• Does the timeframe allow for
generation or PPAs?

HOW TO:
BUDGET
GOAL
LOCATION
TIME
FRAME
• Capex vs. Opex
• Does finance department
demand max. payback period?
• Invest into own plant or pay
supplier/contractor? • Is on-site or near-site
generation an option?
• Are projects in the same
region available for PPA?
• Does the timeframe allow for
generation or PPAs?

3-PHASE APPROACH TO IMPLEMENT GREEN ENERGY
SOURCING
Phase I:
Analysis
Phase II:
Strategy
Phase III:
Execution
Step 1: Analyse energy
consumption and future
demand.
Step 2: Analyse potential for
flexibility (e.g. load
management).
on-site or near-site self-
generation.

SOURCING
Phase I:
Analysis
Phase II:
Strategy
Phase III:
Execution
demand.
management).
Step 1: Develop a corporate
energy strategy in line with
overall CSR objectives.
Step 2: Evaluate options for
green energy supply (potential
costs, risks, benefits).
Step 3: Draft RFPs for green
energy supply under defined
conditions.
generation.

SOURCING
Phase I:
Analysis
Phase II:
Strategy
Phase III:
Execution
demand.
management).
Step 3: Draft RFPs for green
energy supply under defined
conditions.
Step 1: Market RFPs and
evaluate bids from green
energy suppliers (long list).
Step 2: Perform legal, financial
and technical assessment of
potential suppliers (short list).
generation.

CORPORATE STRATEGY MAY INCLUDE MORE THAN ONE
SOURCING METHOD
Self-generation
Power Purchase
Agreements

HOW TO:
CHOOSE A GREEN ENERGY SUPPLIER
• Large consumers often put their (green) energy demand out for tender.
• Bids in response to a Request for Proposals are usually evaluated based on various
criteria, both cost and non-cost related.
Scoring method based
on lowest/highest bids
Applicable qualitative
rating scales
Monetary
• Levelized Cost Analysis
- Electric tariffs and escalation
- Maintenance costs
- Tax benefits and liabilities
- Utility incentives
- Cash flow, NPV, IRR and payback
• Based on spreadsheet and input from
bidders (8,760 hour load shape data)
Qualitative
• Experience / management
• Equipment
• Site control, permitting plan
• Creditworthiness
• Guarantees, warranty, risks
• Impact on the environment
• Degree of acceptance of RFP terms and
conditions

TABLE OF CONTENTS
Introduction
Conclusion

CONCLUSION
• A range of green sourcing options exist, that can fit into an overall
sustainability strategy for industrial consumers.
• The credibility of green energy sourcing depends on the selected option and the
design of the supply.
• High-quality green power products sourcing from new, local renewable energy
projects and Power Purchase Agreements are perceived credible.
• On-site or near-site self-generation shows the highest credibility ranking.
• Guarantees of Origin from conventional renewable energy assets (northern hydro)
are perceived as least credible.
• Implementation of flexibility technologies enhances contribution to the energy
transition and improves credibility of green energy sourcing.

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BENJAMIN MUNZEL
Senior Consultant
+31 (0) 30 662-3023
b.munzel@ecofys.com
CONTACT

Corporate Green Energy Sourcing

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