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Similaire à SPLC 2019 Summit: Buying Renewables: How Leaders are Shifting Energy from a Cost Center to an Asset
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SPLC 2019 Summit: Buying Renewables: How Leaders are Shifting Energy from a Cost Center to an Asset
- 1. Buying Renewables: How Leaders are Shifting Energy from a Cost Center to an Asset Confidential Property of Schneider Electric Hans Royal Director, Renewables & Cleantech, Schneider Electric David Philips Associate Vice President, Energy & Sustainability, University of California
- 2. Page 2Confidential Property of Schneider Electric | Agenda 1 2 3 Introductions The Renewable Energy Lifecycle 4 Resources and Q&A Renewable Energy Market Trends: Active Energy Management
- 3. Why Organizations Source Renewable Energy Manage Power Prices Hedge existing short position, secure fixed price at a discount, mitigate risk of future electricity cost increases Reputational Increasing stakeholder pressures: customers, investors, value chain partners, employees, competitors, etc. Economics Make/save money while achieving environmental goals, tax advantages of incentives & subsidies Reduce impact & climate risk, stated environmental goals gain brand leadership, claims & reporting Environmental
- 4. Page 4Confidential Property of Schneider Electric | Market Convergence Is Here Source: IEA Source: World Energy Outlook 2017
- 5. Reduce Usage & Costs Reduce Costs & Impact Reduce Usage & Impact Active Energy Management Market Convergence Driving Active Energy Management Major transformation underway to manage and optimize energy in real time Page 5Confidential Property of Schneider Electric | 80,000 MW client load managed globally¹ 600k managed sites around the world 8.7M invoices collected, reviewed per month 5,000+ MW offsite renewable energy PPAs advised $30B managed spend worldwide Schneider works in all areas of “AEM”: Renewable Energy
- 6. Our mission is to make it ever easier for all organizations to embrace clean, renewable energy along their journey to active energy management. Page 6Confidential Property of Schneider Electric | A full-service, independent energy procurement & renewable energy advisor to organizations around the globe—from initial engagement through operations. No conflicts of interest. Not an a project developer nor financier of projects. Not owned or affiliated with a utility or electricity supplier. Run open market sourcing processes across suppliers and technologies to secure the best possible products at the best possible price to meet client needs. Educate and engage internal stakeholders to establish trust and understanding of products, projects and processes.
- 7. The Corporate Renewable Energy Lifecycle Page 7Confidential Property of Schneider Electric |
- 8. Page 8Confidential Property of Schneider Electric | Renewable Energy is a Lifecycle
- 9. Page 9Confidential Property of Schneider Electric | Renewable Energy Strategy
- 10. Page 10Confidential Property of Schneider Electric | Many Different Types of Goals & Strategies Navigating the complex global marketplace and diverse stakeholder groups is key to success
- 11. Page 11Confidential Property of Schneider Electric | Setting your Global Strategy Key Considerations to Determine Best Options Regulatory Report • High level economics to achieve RE projects or diversification • Provides validation for internal finance • Identify risks and price sensitivity • Detailed incentive impacts • Provides validation for internal legal • Plan for future regulatory uncertainty • Determine viability of a project • Provides validation for internal Ops • Identify gaps for further technical analysis Technology Review Financial Regulatory Technical
- 12. Strategic Energy & Sustainability Program Best Practices Integrating Supply, Efficiency, & Sustainability drives reductions in cost, carbon, and consumption Page 12Confidential Property of Schneider Electric | Initiative kg CO2 Reduced kWh Reduced OPEX CAPEX Savings / Cost Avoidance Payback Supply Portfolio Growth (12,000) 0 2.1M 0 0 - Mexico Remote Self-Supply 0 0 0 0 $1.2M - Grid Mix 27,000 0 0 0 0 - Renewables On-Site 7,000 0 0 $10M $3,7M 2.7 VPPA 20,000 0 0 0 $2.0M - Fleet Fuel Switching RECs 3,000 0 100k 0 0 - Efficiency LED 10,000 19,608,00 0 0 $4.5M $1.8M 2.5 BMS 5,000 9,804,000 0 $2.8M $900k 3.1 VFDs 3,000 5,882,000 0 $900k $500k 1.8 Total 63,000 35M $2.2M $18.M $10.1M 2.0 Baseline CurrentYear FacilityGrowth Production… GreeningGrid LEDRetrofits BuildingMgmt Motors&Drives On-SiteSolar VirtualPPA#1 UnbundledRECs GoalAchievement CO2Emissions 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
- 13. Page 13Confidential Property of Schneider Electric | Renewable Energy Sourcing
- 14. Page 14Confidential Property of Schneider Electric | 3 Main Ways to Procure Renewable Energy • The way clean energy use is tracked and traded • RECs, GOs, I-RECs, LGCs, TIGRs, etc. • Needed to make environmental claims • Unbundled vs. bundled • Short-term Green Tariffs & Retail Options Energy Attribute Certificates • Direct reduction of energy • High visual appeal • Hard to achieve scale • Fixed to real estate portfolio • Virtual Net Metering possible in certain markets • Ownership, lease, or PPA Onsite/Distributed Generation • Large purchases of utility-scale projects • Power Purchase Agreements (Virtual, Direct, Retail) • Investments: Tax Equity • Achieves additionality and scale • Long-term Green Tariffs & Retail Options Offsite Generation
- 15. Page 15Confidential Property of Schneider Electric | Aggregate USA Offsite PPAs in the C&I Sector by Energy Type
- 16. Page 16Confidential Property of Schneider Electric | Value In Offsite PPAs Usually Requires Long-Term Commitment
- 17. Retail (Direct) PPAs • Client load must be in deregulated retail market • Contract sleeved through utility/RES • Can be easier to transact • Can be riskier than they look Financial (Virtual) PPAs • Power liquidated into local spot market and settled financially • Allows operational flexibility for buyer • Can be complicated & risky • Can provide significant economies of scale and financial benefits Page 17Confidential Property of Schneider Electric | Retail (Direct) vs Financial (Virtual) PPAs in the US
- 18. Term Length Contract Complexity Risk New vs. Existing Asset Cost & Risk Considerations How to Evaluate Good vs Bad Deals Short Low Low Existing May contain overpriced RECs Compare vs unbundled RECs Medium Low Medium Existing May contain overpriced power + RECs Compare vs fixed brown power + unbundled RECs Long Lower than desirable High New Likely contains significant long-term renewable energy price risk Compare vs bifurcated Retail Sleeve PPA options or VPPA Recommendations for Retail Green Energy Offer Evaluation Upcoming blog on this topic at www.hub.resourceadvisor.com
- 19. Tax Credits for Wind & Solar Are Stepping Down $19.40 / MWh PTC Eligibility $14.40 / MWh PTC Eligibility $9.60 / MWh PTC Eligibility No PTC Eligibility 30% ITC Eligibility 26% ITC Eligibility 22% ITC Eligibility 10% ITC Eligibility Year Project Placed in Service Construction “Started” Legend Year Project Placed in Service Construction “Started” Legend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 $24.00 / MWh PTC Eligibility Page 19Confidential Property of Schneider Electric |
- 20. Page 20Confidential Property of Schneider Electric | Renewable & Traditional Energy Management Schneider Electric manages over 2,000MW of current operating offsite PPAs
- 21. Confidential Property of Schneider Electric | Managing renewable energy with traditional energy Page 21 Past performance is not indicative of future results. Hypothetical performance results have many inherent limitations. No representation is being made that any program will or is likely to achieve profits or losses similar to those shown. Swaps, futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Resource Advisor Foundation Custom
- 22. Page 22Confidential Property of Schneider Electric | Break down silos to integrate goals into common strategy The future is a convergence we call Active Energy Management how you grow sustainably and reduce resource use how you use energy and increase reliability how you buy energy and manage risk ACTIVE ENERGY MANAGEMENT
- 23. Page 23Confidential Property of Schneider Electric | The RE100 Projected Global Renewable Electricity Shortfall Call to Action – Let’s Engage Together to Advance This Market
- 24. Page 24Confidential Property of Schneider Electric | • Join the NEO Network: www.neonetworkexchange.com • Read our Blog: www.hub.resourceadvisor.com • Email Hans Royal: hans.royal@se.com • Come talk to us after this! Tools & Resources Upcoming Events Schneider’s Innovation Conferences: Energy & Sustainability PERSPECTIVES BARCELONA, SPAIN | 19-20 JUNE 2019 NASHVILLE (TN), US | 22-23 AUGUST 2019 More info: www.perspectivessummit.com