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BRC Newsletter Sept 2015

Dear Colleagues,

Welcome to the first Business Renewables Center (BRC) newsletter!

As we approach the midway point between our May conference and our upcoming gathering in New York on November 17, we wanted to share some news with you.

BRC’s Latest

Advisory Board
The BRC’s Advisory Board, consisting of six corporate buyers, six project developers, and six service providers, held its first quarterly meeting a few weeks ago. Click here for more information on the Advisory Board’s focus and composition.

New, Tiered BRC Membership Structure
Following the recommendation of our Advisory Board, we have introduced a new, tiered membership structure for the BRC.

The main innovation is that new corporate buyers now have the option to choose between a silver or a gold membership. The entry-level silver membership is free of charge. The gold-level membership costs $10,000 and offers more services—in particular, access to a limited number of consulting hours and access to our upcoming Web platform listing wind and solar projects ready for PPA transactions.

Welcoming New BRC Members
Since May, the following companies have joined the BRC:

3Degrees
AEG Worldwide
Affordable Solar
Autodesk
Capital Power
Cisco Systems
Digital Realty
Equinix
Iberdrola Renewables
Gaelectric
Infinity Wind Power
Lockheed Martin
Merrill Lynch Commodities
PricewaterhouseCoopers
Sempra U.S. Gas & Power
SolarCity
Starwood Hotels & Resorts
Steelcase
Tradewind Energy
Workday
Xanterra
Yahoo

We are continuing our recruitment effort. We look forward to putting together an announcement of all new members from May to November at our November 17 event.

SAVE THE DATE: Members, please book the full day of November 17 in your calendars for the next BRC workshop, to be hosted at Bloomberg Headquarters. This is an invitation-only event. We will send invitations in the coming week. If you have not received one and would like to attend, contact Jill Harley at jharley@rmi.org.

Sponsorship Opportunity: We are planning to organize a dinner on Monday, November 16 and a cocktail reception and dinner on Tuesday, November 17. If you are interested in sponsoring such an event, please contact Jill Harley at jharley@rmi.org.

Celebrating Recent Deals

HP & SunEdison’s 112 MW wind PPA in Texas
Congratulations to our members HP and SunEdison on their announcement of a 112 MW wind PPA in Texas! For more information, see the NY Times article as well as RMI's blog post on this transaction.

Other Recent Announcements

  1. Cisco's 20 MW Solar PPA in California
  2. Facebook's 200 MW Wind PPA in Texas
  3. Amazon's 208 MW Wind PPA in North Carolina

Market Update

2015 is already a record-breaking year. Year to date, 1,370 MW of corporate PPAs have already been signed, meaning that 2015 has already surpassed 2014, which was itself a record-breaking year.

Prices
Solar PV PPA prices are continuing to hit all-time lows, with multiple bids from Nevada and Texas coming in at less than 4 cents / kWh ($40/MWh).

Other market news:

  • The U.S. has just started building its first offshore wind facility in Rhode Island.
  • Deutsche Bank has suggested that solar PV is also set to explode in India and China, due to increasing cost parity and rising renewable energy targets.

On the policy front:

  • The White House is moving forward on the Clean Power Plan.
  • The White House launched the American Business Act on Climate Pledge with 13 leading companies committing $140 billion in new low-carbon investments and more than 1,600 MW of new renewable energy.

Market Outlook - Beyond Community Solar
Honda, Patagonia, and Google have provided tax-equity financing for distributed solar projects. Yet no corporate deal has thus far involved power procurement from multiple, distributed, off-site resources. Corporations may find such deals preferable if they align with community-involvement interests or with their business focus, or if the deals provide better economics.

Yet while community solar is indeed enjoying an exciting upward rate of growth across the US, the market size is expected to remain relatively small in the near future, reaching 200–300 MW of new installs per year in 2016–2018, according to Greentech Media. This would be equivalent to a small number of utility-scale off-site corporate deals. Moreover, most of the community solar market, as currently designed, will be subscribed by residential customers.

To broaden corporate power offtake opportunities from distributed assets, the new aggregated-distributed-energy market models under development in California (DERPs), New York (DSP aggregations), and Texas (DREAM) hold promise. These deregulated-market advancements would require major involvement by independent system operators: CAISO, NYISO, and ERCOT, respectively. The new rules would not only allow developers to aggregate many residential and commercial power systems—such as rooftop solar PV installations—into a single virtual power plant, but would also allow them to sell into a transparent, transactable market. Unlike community solar, there would be no utility- or PUC-determined caps in these markets.

California is leading the pack. CAISO’s Board has approved new, high-level rules but the details need to be sorted out over the coming months. There is a good chance that all three of these states will open up new off-site, distributed power-purchase opportunities for corporations in the next 12–24 months.

Unlocking Aggregation
Demand aggregation has the potential to unlock new customer segments by offering the economic benefits of large-scale renewables projects to smaller corporate buyers. BRC’s Aggregation Primer will describe the existing business models for aggregation offered by Bank of America Merrill Lynch, CustomerFirst Renewables, and Renewable Power Direct. We will publish a first round of case studies on our Information Site in the near future and welcome you to use these ideas, contribute, and connect with these leaders.

Did you know?
Does the PPA you are considering have a minimum volume guarantee? If so, accounting for this contract may mean there is a "notional" value, which may trigger derivative accounting. Have you had the chance to use the BRC guides and primers? To get access to the Accounting Primer and find out more about accounting treatment of PPAs, please email Steve Abbott at sabbott@rmi.org.

Next issue: Your feedback on this newsletter is most welcome. Let Jill Harley (jharley@rmi.org) know if you would like to contribute to our "Market Outlook" in the next newsletter.

This BRC newsletter is intended to provide factual information and is based on publicly available information, but no representation is made with respect to its accuracy or completeness. None of the information can be construed as investment or accounting advice. RMI reserves the right to include, change, or edit any content.

 
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