As corporations realize the importance of adopting renewable energy procurement strategies to reduce their carbon footprint, it is pivotal to transition to sustainable energy sources to enhance sustainability and achieve long-term cost savings.
Reasons to drive the shift away from fossil fuels to renewable energy:
Environmental Responsibility: Climate change is a global crisis, and organisations must take responsibility for their carbon emissions. Transitioning to renewable energy is a significant step towards reducing greenhouse gas emissions.
Cost Savings: Over time, renewable energy sources are more cost-effective than fossil fuels due to decreasing technology costs and predictable energy prices. Procuring renewable energy can shield businesses from volatile energy markets.
Brand Reputation: Commitment to sustainability enhances a company’s reputation, attracts eco-conscious customers, and improves employee morale. It can also help meet environmental goals outlined in corporate social responsibility (CSR) reports.
Enterprises employ the below strategies to effectively integrate renewable energy into their value chain.
PPA : PPAs or Power Purchase Agreements are long-term contracts (typically 10–20 years) between businesses and renewable energy providers. They allow businesses to secure a stable renewable energy supply at a predetermined price, often lower than market rates. They can be structured as onsite (solar
or wind installations) or off-site (buying energy from a remote renewable project) arrangements.
Green Tariffs and RECs: In regions where onsite generation is not feasible or cost-effective, companies may opt for green tariffs, which allow them to purchase renewable energy from utilities. On the other hand, RECs, or Renewable Energy Credits, provide a mechanism for companies to claim they are using
renewable energy, even if they cannot access it directly.
Energy Storage Solutions: Integrating energy storage systems, such as batteries, with renewable energy sources can help enterprises store excess energy for later use. This technology ensures a consistent energy supply, even when not receiving power, enhancing energy reliability.
Renewable Energy Marketplaces: There are platforms to connect renewable energy buyers with sellers, facilitating renewable energy procurement. They offer flexibility and transparency in sourcing renewable power.
I-RECs: For global companies, I-RECs, or International Renewable Energy Certificates, provide a way to
support renewable energy in regions where direct procurement may be challenging due to regulatory or
logistical barriers.
Conclusion These procurement strategies have become essential tools for businesses striving to reduce their environmental impact and align with a more sustainable future.