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Global Green PowerHOW INTERNATIONAL MARKETS ARE CHANGING CLEAN ENERGY

2Global Green Power: How International Markets are Changing Clean Energy | JUNE 2017

2015 was the tipping point for global renewable

energy, as capacity additions around the world

surpassed all previous records. With the signing of

the unprecedented Paris Agreement, dozens

of countries have pledged to be part of a broader,

economic-driven climate solution. While a few

large players—including the U.S., the U.K., and

Europe—have dominated the global scene to

this point, many more markets across the world

are following suit, developing renewable energy

and clean technology products designed to

help governments, utilities, homeowners, and

corporate, institutional, and industrial (C&I) buyers

join the green power revolution.

For the C&I sector, in particular, this is welcome

news. Multinational corporations—whether based in

the U.S. or abroad—have historically struggled

to find credible, trustworthy clean energy options

in many markets where they have operations.

The Paris Agreement, combined with new guidance

issued by the World Resources Institute (WRI) on

the accounting and reporting of emissions from

purchased electricity, has led more buyers to seek

reliable products in emerging markets, including

India, Latin America, and throughout Southeast Asia.


Table of Contents

The U.S. Market, Renewable Energy Certificates, and the Rise of the PPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

The Global Market Expands . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

An Emerging, Global Customer Class and Renewable Energy Marketplace . . . . . . . . . . . . . . . . . . . . . . . .6

Globalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Regulation, Reporting, & Transparency . . . . . . . . . . . . . . . . . 7

Paris Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Changes to the GHG Protocol: Scope 2 Guidance. . . . . . . . . . . . . 7

Scope 3 Emissions and Supply Chain Transparency . . . . . . . . . . .8

Market Volatility Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Climate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

The Opportunity: How C&I Buyers Can Capitalize on Emerging Markets . . . . . . . . . . . . . . . . . .10

Mexico: Newly Deregulated Energy Market . . . . . . . . . . . . . 11

India: Opportunities on the Sub-Continent . . . . . . . . . . . . . . 12

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Continental Europe: Scandinavia and the Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

case study Digital Realty: A Global Company, a Global Mission. . . . . 14

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Time to Act: Implications for C&I Buyers . . . . . . . . . . . . . .16

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

This guide is for informational purposes only and not for the

purpose of providing legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend

you consult a lawyer if you want legal advice.

© 2017 Renewable Choice Energy, www.renewablechoice.com

Global Green Power: How International Markets are Changing Clean Energy | JUNE 2017

The U.S. Market, Renewable Energy Certificates, and the Rise of the PPA

The widespread use of renewable energy by C&I buyers originated in the U.S.

with the 1999 advent of the renewable energy certificate, or REC. As it’s nearly

impossible to trace renewable energy on the spot electricity market, RECs

were devised as a means to track and trade the environmental attributes of

green power.

One REC represents one megawatt-hour (MWh) of renewable generation and

is produced in a 1:1 ratio. RECs are a tradable commodity distinct from the

wholesale electricity itself. In order to be able to claim the use of green power, an

entity must bundle—or match—RECs to its purchased electricity, regardless of

source. In effect, RECs and renewable electricity are two markets—and

two commodities—that, when paired, represent the environmental benefits of

clean generation.

In 2006, U.S.-based Whole Foods Market became the first corporation to buy

RECs equal to 100% of its annual purchased electricity consumption1, allowing

the natural foods retailer to claim that it was 100% wind-powered. Since that time,

thousands of U.S. and Canadian companies have followed suit, and RECs have

become the standard for North American renewable energy trading, as well as the

basis for market development around the world.

In the U.S., use of RECs by C&I buyers remains voluntary, as there is currently no

cap-and-trade scheme or other compulsory mechanism (although this is subject

to evolution over time as the legislative environment changes). RECs are also

used in compliance markets by utilities to meet individual state mandates called

Renewable Portfolio Standards (RPS) or renewable energy goals, which exist in

37 states and the District of Columbia.2

In 2008, U.S. C&I buyers began turning towards power purchase agreements

(PPAs) as the means to acquire renewable energy over a longer term. Already in

use by utilities and financiers, PPAs are a form of contract for differences, where a

creditworthy off-taker (buyer) agrees to directly contract with a renewable energy

project (developer) to lock in renewable energy generation at a low, fixed price

over a long-term duration (typically 10–20 years). By securing this stable source

of generation at an invariable rate, buyers can protect themselves against market

fluctuations in conventional fuel prices, potentially saving millions of dollars over

the life of the contract.3

4

This paper will provide an

overview of where and how clean

energy markets are developing, as well as the unique

products and standards available

to meet the needs of the C&I buyer with global operations.

1 Renewable Choice Energy received the Department of Energy’s Beacon Award for our

role in assisting Whole Foods to achieve this milestone.

2 Learn more at http://www.dsireusa.org/.

3 To learn more about PPAs, download our white paper Accelerate Your Energy Strategy

with PPAs.

http://www.renewablechoice.com/wp-content/uploads/2016/05/Accelerate-Your-Energy-Strategy-with-PPAs.pdf

http://www.renewablechoice.com/wp-content/uploads/2016/05/Accelerate-Your-Energy-Strategy-with-PPAs.pdf


In 2015, C&I PPA buyers were the driving force behind record U.S. wind and solar

capacity installations. Google has become the largest U.S.-based purchaser of

renewable energy through its commitment to onsite and offsite PPAs, acquiring

nearly 2.5 gigawatts (GW)4 globally since executing its first offsite deal in 2010.

Several other organizations with headquarters outside the U.S., including Royal

Philips and Volkswagen, have also acquired U.S.- and Mexico-based PPAs to

address their North American operations.

The C&I appetite for PPAs has not been confined to North America, however,

with power-players Facebook, Mars, and Nestle, as well as Google, executing on

PPAs in Scotland, Ireland, Norway, Chile, and Sweden, while tech giant Apple has

invested directly in solar projects in China, Mongolia, and Singapore.

The Global Market Expands

North America is not alone in its recent progress on renewables. In 2015, wind

power was the leading source of new generation in Europe and the second

largest in China, while new markets in Africa, Asia, and Latin America began to

emerge. Hydropower, solar PV power, solar thermal power, and bio-power have

also seen rapid growth across China, Japan, Germany, the U.K., Turkey, Brazil,

India, Vietnam, Malaysia, Morocco, South Africa, and Colombia.5

However, despite these advances, the means to track and trade renewable

power (in a way similar to the U.S. REC trading scheme) has only developed in

the last decade.

In 2009, the E.U. issued Directive 2009/28/EC, which mandates a minimum 20%

renewable energy usage throughout the region, pooled across the various E.U.

member states. The Directive also defined guarantees of origin (GOs), which have

become the E.U. equivalent of RECs. Like RECs, GOs are created in a 1:1 ratio

with renewable generation, are used to track and trade renewable energy, and

become the “proof of purchase” of that generation. While not interchangeable with

RECs Drive Market Development

In the age of the PPA, RECs

can look rather humdrum.

However, RECs have played,

and continue to play, a critical

role in driving renewable

energy market development.

RECs were the first way that

organizations were able to

make a choice about the

type of electricity they were

consuming. They remain a

free-market instrument that

enables buyers to make

credible, environmental

claims about their chosen

energy source.

RECs also create a demand

signal in nascent markets that

moves governments

and utilities to action. As a

result, REC markets drive

new project development,

and, over time, enable

consumer confidence, which

leads to innovative contracting

and growth mechanisms

like PPAs.

Despite the attractiveness of

PPAs, the global REC market

remains strong, and many

multinational companies

continue to use RECs and

their global counterparts to

achieve their commitments.

RECs also remain the

predominant means for

companies ineligible to

participate in the PPA market

to achieve their environmental

and Scope 2 reporting goals. Energy Attribute Certificates (EACs)

Both EACs + Power Purchase Agreements (PPAs)

4 Accessed 12/5/2016 from https://www.google.com/green/energy/use/.

5 Renewables 2016: Global Status Report. Published by REN21 and available at:

http://www.ren21.net/status-of-renewables/global-status-report/.


North American RECs, GOs can be used to address C&I electricity consumption

throughout the E.U. interconnected region.

In 2014, the non-profit International REC Standard (I-REC Standard) was

launched. The agency is overseen by a cross-industry board of directors that

includes representation from some of the primary players in setting policy in

international markets. Similar to the U.S. REC certification body Green-e®

Energy, the I-REC Standard administers the issuance, tracking, and trading of

international RECs (I-RECs) in markets where reliable, verifiable trading schema

do not yet exist. I-RECs are tracked via the I-REC registry and are available in

China, Taiwan, Turkey, Vietnam, and Mexico, among others.6

Now, as C&I buyers begin to turn their attention to PPAs, there are also

international markets developing the capacity to pass along the economic savings

of these long-term contracts. Mexico, India, the U.K., and regions of the E.U. have

emerged as primary PPA markets for C&I off-takers. The opportunity in these

markets will be discussed in greater detail below.

An Emerging, Global Customer Class and Renewable Energy Marketplace

The new role of voluntary C&I buyers as global renewable energy market leaders

is primarily driven by four strategic motives: globalization; regulation, reporting, and

transparency; market volatility; and climate action. Whether utilizing renewable

energy by purchasing energy attribute certificates (EACs, an umbrella term for

RECs, GOs, and I-RECs) or by pursuing large-scale PPAs, C&I buyers have proven

themselves to be a powerful force in the advancement of renewable energy.

Globalization

With the rise of multinationalism, alongside increasing data and consumption

demands, most corporations have gone global. While the trend of moving

operations to developing nations is nothing new, a broader global community and

communications network has increased both the opportunities and challenges of

working internationally.

One of these challenges is a rapidly expanding appetite for energy, combined with

fluctuating global energy prices. A considerable portion of a company’s energy

and carbon footprint can lie outside the location of its headquarters, or, even

harder to determine, with its suppliers.

In many global markets, renewables offer a stable energy choice, while also

contributing to improved air quality and human health in the communities where

businesses have license to operate. Rapidly declining wind and solar prices are

leading some developing countries to leapfrog fossil fuels entirely.

Increased demand from growing populations and globalization has also resulted in

the governments of many developed and developing nations providing incentives

for renewable energy expansion. These increased governmental incentives

have created considerable opportunity for corporate off-takers looking to utilize

renewables to save money.

6 Learn more at http://www.internationalrec.org/.


Regulation, Reporting, & Transparency

Recent regulatory trends in sustainable development—such as the Paris

Agreement—combined with fresh reporting guidance from WRI and CDP on

emissions accounting, disclosure, and transparency, are leading many C&I buyers

to source products and services internationally in order to meet established

mandates. These same buyers are leveraging their clout to drive changes

throughout their supply chains in order to address emissions and

reduce the overall impact of their products and services.

Paris Agreement

Adopted by the United Nations Framework Convention on Climate Change

(UNFCCC) in December, 2015, the Paris Agreement7 was agreed to by a

consensus of representatives from 195 countries. While not legally binding,

the newly ratified Agreement is the most historic, multi-partisan treaty of its

kind, and it invites signatory countries—including the U.S. and China, which

together produce 40% of the world’s greenhouse gas (GHG) emissions—to make

ambitious “nationally determined contributions” toward reducing

global emissions.

Although the Paris Agreement has been criticized for its lack of specificity and

enforcement “teeth,” it represents a united front against climate change—and

in favor of renewable energy development—heretofore unachieved. Individual

mandates of the participating countries have already begun to be announced,

such as the declaration by the U.S., Canada, and Mexico that North America will

jointly commit to 50% renewable energy generation by 2025.8

Concerns over whether the U.S. will withdraw from the Paris Agreement under

a Trump presidency remain high, but other countries have redoubled their

commitments in the wake of the U.S. election. For instance, in late November,

China announced it's intention to double the country's wind power by 2020.9

Changes to the GHG Protocol: Scope 2 Guidance

Last year, WRI released released the new Scope 2 Guidance for emissions

reporting on purchased electricity, heat, steam, and cooling. The new guidance

introduces a two-pronged approach to Scope 2 accounting: location-based and

market-based.

In location-based accounting, companies must report on their actual Scope 2

energy consumption, or activities. Organizations are constrained in their ability

to reduce location-based emissions; they must either lower their consumption or

petition local utilities or government agencies to change the grid mix in favor

of renewables.

7 Learn more at http://unfccc.int/paris_agreement/items/9485.php.

8 Retrieved 12/5/16 from https://www.washingtonpost.com/news/energy-environment/

wp/2016/06/27/u-s-canada-and-mexico-to-pledge-to-source-half-their-overall-electricity-

with-clean-power-by-2025/.

9 Accessed on 12/5/16 from http://www.sixthtone.com/news/china-drafts-new-wind-

power-plan.

https://www.washingtonpost.com/news/energy-environment/wp/2016/06/27/u-s-canada-and-mexico-to-pledge-to-source-half-their-overall-electricity-with-clean-power-by-2025/



http://www.sixthtone.com/news/china-drafts-new-wind-power-plan

http://www.sixthtone.com/news/china-drafts-new-wind-power-plan


In market-based accounting, companies must report on their access to carbon-

reducing mechanisms, called contractual instruments, in their regions of operation.

These market mechanisms—which include EACs such as RECs, GOs, I-RECs, and

PPAs, if they meet proper quality criteria—imply that organizations have a choice to

use clean sources of generation in many regions throughout the world.

The market-based requirement goes a step further and requires companies to

pair their purchases of contractual instruments with the market in which they

operate. This is a departure from previous guidance, which allowed companies to

use U.S. RECs, for example, to meet their international load. Now, organizations

must be as specific as possible when buying contractual instruments that match

load region.

This change is forcing many multinational corporations to begin sourcing clean

energy products from regions that were previously untapped—particularly if they

intend to report to CDP—and, as a result, is driving market development.10

Scope 3 Emissions and Supply Chain Transparency

Since Walmart launched its Sustainability Index back in 2009, a desire to gain

greater transparency into, and control over, supply chain responsibility has been

on the rise for multinational entities. Supply chain sustainability remains one of the

most pressing issues facing these companies, as it is within the supply chain that

a majority of environmental and social impacts lie—and often where they are the

hardest to change.

For many companies, measuring and acting on Scope 3 emissions—those

generated indirectly and outside of an organization’s direct control—presents an

enormous hurdle. Supply chain emissions are part of Scope 3 reporting, and C&I

buyers are looking for ways to influence their suppliers in order to reduce these

emissions. While many rely on indices akin to the Sustainable Apparel Coalition’s

Higg Index to measure emissions, few companies are requiring suppliers to act on

their findings. Renewable energy development in emerging markets such as India

and China, where many of these suppliers are located, presents an opportunity for

multinational corporations to influence—and reduce—supplier footprints and their

associated Scope 3 emissions, while also helping them save money on

their electricity.

Market Volatility

Energy is the most volatile commodity in the world.11 For most sizeable

organizations, purchased electricity is one of their largest operating expenses. As

a result, the rapidly decreasing prices of wind and solar technologies and the "free"

fuel sources offered by renewables—stable in comparison to fossil fuels—are

very attractive. Particularly when aided by subsidization or other government

incentives C&I buyers stand to save millions of dollars by using renewables over

conventional generation.

10 For more information on the Scope 2 guidance and its relation to emission reduction and

marketing claims, download our guide, Clean Energy and Emission Reduction Claims:

What You Need to Know.

11 Why Are Electricity Prices So Volatile? Retrieved 12/5/16 from http://www.solomonenergy.com/

blog/wp-content/uploads/2015/08/2015-08-13-Why-are-Electricity-Prices-so-Volatile.pdf.

http://www.renewablechoice.com/wp-content/uploads/2016/07/Clean-Energy-Claims-Guide-RCE.pdf

http://www.renewablechoice.com/wp-content/uploads/2016/07/Clean-Energy-Claims-Guide-RCE.pdf

http://www.solomonenergy.com/blog/wp-content/uploads/2015/08/2015-08-13-Why-are-Electricity-Prices-so-Volatile.pdf

http://www.solomonenergy.com/blog/wp-content/uploads/2015/08/2015-08-13-Why-are-Electricity-Prices-so-Volatile.pdf


Market volatility can also be felt in the unstable infrastructure in developing

countries, where high demand, outdated technologies, and even corruption can

impact the ability to reliably deliver electricity. In these circumstances, renewable

power—particularly when delivered from an onsite system or, in many markets,

from grid-connected systems—can provide electricity without disruption, despite

political or infrastructure instabilities. Renewables offer similar resiliency to C&I

buyers who may fear operational disruptions from extreme weather events.

Climate Action

Hundreds of large organizations participate in one or more reporting or

commitment frameworks, such as the RE100, CDP, GRI, and WWF’s Corporate

Buyer’s Principles/Climate Savers. These companies have made public

commitments to either increasing the volume of renewable energy they purchase,

reducing their carbon emissions, or both. Fulfilling these commitments, and

relieving the NGO pressure many of these companies

face to be more responsible, is one powerful reason multinational companies use

EACs or are considering larger-scale PPAs.

Additionality has become a driver for many companies considering renewables

at scale. Additionality refers to the concept of renewables “beyond business as

usual.” Projects that achieve additionality have demonstrated that, but for the C&I

buyer’s action, the project would not have been completed. Additionality can also

be achieved by specific environmental attribute products, such as GoldPower,

which provides RECs sourced from projects in countries without Kyoto Protocol

targets. By certifying these projects as additional, C&I buyers can be assured that

their purchase is actually displacing global emissions on the grid.

Acting on climate by purchasing renewables has other positive side effects,

sometimes referred to as co-benefits. A reduction in overall global emissions can

potentially mitigate the effects of climate change that can impact a company’s

operations, including disruptive weather events and population displacement.

The Difference Between GoldPower® and I-RECs

GoldPower and I-RECs are both EAC

products designed for global markets

and available in a large and growing

number of countries where established

national REC schemes do not yet

exist. While I-RECs were designed

as a mechanism for tracking verified

renewable energy generation and

ownership of the renewable energy

attributes, GoldPower was designed

to actively support the uptake of

renewable energy. GoldPower has

a number of quality features that

I-RECs lack, including additionality;

social and environmental safeguards

and verified, ongoing benefits to the

local community and environment; a

maximum plant age; requirement to

use recent-vintage credits; strict criteria

regarding full aggregation of carbon

and renewable energy attributes;

transparency of voluntary retirements;

and an annual audit of suppliers and

transactions. WWF’s involvement in

the development of GoldPower, and

ongoing support for it, reflects these

quality features.

I-RECs do have a slight advantage

because they are an independent,

non-profit global standard. As a

result, they are formally recognized

by the Scope 2 reporting guidance

and related CDP technical guidelines,

whereas proprietary products, such as

GoldPower, are not. This differentiation

ultimately leaves the decision up to

buyers to make their own judgement as

to GoldPower’s eligibility for Scope 2

reporting, although Renewable Choice

is confident that GoldPower does

meet all quality criteria.

To learn more about GoldPower,

visit www.goldpower.net.


Renewable energy also uses a fraction of the water required for either coal-

fired generation or natural gas extraction, which can reduce water consumption

in drought-impacted operating regions. Finally, renewable energy has a direct,

positive effect on reducing pollution and improving air quality, which improves

human health outcomes in the markets where companies operate.

The Opportunity: How C&I Buyers Can Capitalize on Emerging Markets

The opportunities for C&I buyers to source international clean energy products are

considerable, but nuanced. Below is an overview of progress occurring in several

emerging markets, with Mexico and India topping the list thanks to available

incentives and timeline constraints.

International Product Availability

REGION PRODUCT TYPES DESCRIPTION NOTES

North America: U .S . & Canada

RECs, PPAs Domestic REC standard for credible renewable energy products.

C&I PPAs have been popular in the U.S. due to attractive incentives and project economics.

North America: Mexico

CELs, I-RECs, PPAs International standard for credible renewable energy products. Domestic REC products in new market regime.

Immediate, but time-limited, opportunity for economically attractive PPAs. Act now for most favorable market conditions.

Europe (inc. U.K.) GOs, PPAs Established standard for most E.U. member states.

GOs are Scope 2–compliant with caveats due to production claims.

India RECs, I-RECs, GoldPower, PPAs

Difficult market due to confluence of voluntary and compliance schemes.

Aggressive goals for renewables have created highly incentivized markets for PPAs. Act before 2018 to receive subsidies in certain states.

China I-RECs, CERs, GoldPower

Existing carbon markets; nascent REC market.

Labels are working together to create a credible product.

Singapore I-RECs, TIGRs, PPAs

Market constrained by supply options, with no government involvement to date.

Products are sourced from limited project and technology types.

Malayasia/Thailand/Laos

GoldPower Limited market, with only GoldPower available at this time.

Interconnectedness of grid may allow for assignment of RECs throughout peninsula.

Japan Green Power Certificates

Limited liquidity of products and technology types.

Green Energy Certification Centre tracks certificates.

Vietnam I-RECs, GoldPower In development. --

Taiwan GoldPower In development. --

Australia GreenPower, PPAs Government-accredited tracking system, open to voluntary buyers.

GreenPower must come from generators built after 1997.

Brazil I-RECs In development. Emerging market where products are primarily bundled with purchased electricity.

Turkey GoldPower, I-RECs In development. --


Mexico: Newly Deregulated Energy Market

In January of 2016, the Mexican government began electricity market deregulation

in accordance with la Ley de la Industria Eléctrica. Under this reform, the market

in Mexico will open to competitive distribution and generation, as more developers

enter the newly established wholesale marketplace.

This is outstanding news for C&I buyers with Mexican operations, as the reform

will expand their capability to sign bilateral PPAs directly with independent

renewable power producers. Over time, the reform will also push market

development, as competition and investment in new generation capacity increases.

However, while the new wholesale market finds its feet, there are a number of

ongoing uncertainties regarding future fixed and variable electricity-related costs

and PPA structures. With this in mind, the best opportunity for bilateral PPAs

currently exists under the self-supply regime, a regulatory structure available to

C&I buyers for a limited period into early 2017. Participating in this regime reduces

costs, risk exposure, and operational limitations to buyers.

A self-supply PPA contract mimics a virtual net metering agreement, which allows

customers to realize the benefits of an agreed-upon, fixed-price cost of energy at

any time of day. Under this contract, electricity produced by a renewable project

is delivered to the grid to be used in realtime, at which point CFE, the Mexican

state-owned utility, banks the associated fixed-price energy credits to the buyer.

These credits can be used by the buyer at any time to realize the benefits of their

renewable purchase, which is helpful when using an intermittent energy source

like wind or solar.

Self-supply contracts also use low, fixed-cost wheeling charges that allow C&I

buyers to enter into a PPA with a renewable project located anywhere in Mexico.

This is useful because it helps buyers avoid operational and transmission risks,

and it gives flexibility when siting a project close to the operational facilities that

will take delivery of the contracted electricity.

A primary reason to act with urgency on the Mexican self-supply opportunity

is Clean Energy Certificates (CELs, a type of EAC), which will be mandated

under the new deregulated regime. CELs are predicted to cost anywhere from

USD$10 – 20 each; C&I customers with Mexican operations will be required to

purchase them at a minimum of 5% of their electricity consumption beginning in

2018. By sourcing clean power directly via a PPA, buyers avoid this mandate and

its associated CEL costs.

Signing a self-supply agreement by the end of 2016, for a period of 10 – 20 years,

affords C&I buyers stability in an unpredictable, newly deregulated market. Buyers

have already begun to take advantage of this favorable situation; so far, more

than 25 global companies—including Home Depot, Praxair, and Nissan—have

executed wind and hydro projects in Mexico.12

12 Learn more on the Mexican market opportunity in our vlog:

https://www.youtube.com/watch?v=hBXgdh7aDgo.


India: Opportunities on the Sub-Continent

India is already home to many multinational companies’ Asian operations and

presents tremendous commercial opportunities for growth. However, with

a population of over a billion people, India faces extraordinary social and

environmental challenges that impact the companies that operate there.

Recognizing its particular energy and electricity needs, the incumbent Modi

Government has enacted several policies designed to accelerate the installation of

renewable energy projects of various technologies and sizes.

The centerpiece of these policies is an aggressive installation target of 175 GW

of new renewable capacity by 2022. Of this, 100 GW is predicted to come from

solar (40 GW of which will be rooftop), 60 GW from wind, 10 GW from biomass,

and the remaining 5 GW from small hydropower.

While the policy is national, many of the levers needed to achieve these targets

are designed and administered at a state level. This has two implications for C&I

buyers. The first is that some states—particularly those in the south, including

Karnataka, Telangana and Tamil Nadu—are more attractive than others. The

second is that companies operating across several state regions will need to take

a geographic approach to their renewable strategy.

Companies with regional load as low as 1 megawatt (MW) can now access offsite

renewables at competitive rates via PPAs. This competition was created in the

energy sector by the Open Access system, which allows consumers to choose

from where they purchase their electricity. This system, which has been in place

for over a decade, has proved valuable in enabling renewable energy access

at scale.

Indian PPAs have similar benefits to all other PPA deal structures, including

savings on energy expense, locked-in power prices over the life of the contract—

which is particularly valuable in an uncertain and volatile Indian market—and the

contractual ownership of the associated environmental attributes, allowing for

zero-carbon Scope 2 claims for Indian loads.

The low 1 MW power consumption threshold is also an enormous benefit; typically,

U.S. offsite PPAs require loads upwards of 20 MW at a minimum. In addition,

there are other state-specific benefits that buyers can take advantage of by acting

quickly. For example, companies signing solar PPAs in Karnataka realize a 10-

year exemption from a significant cross-subsidy charge. However, this exemption

only applies to projects commissioned before the deadline of March 31, 2018.

Onsite solar solutions are also an attractive option for many buyers with Indian

operations. Companies have installed systems as large as 4 MW, saving money

and securing a captive supply of electricity.13

13 Learn more on the Indian market opportunity in our vlog:

https://www.youtube.com/watch?v=0nE2s_hfu-E.


United Kingdom

The U.K. has been a leader on climate action and renewable energy development.

In July, even in the wake of Brexit, the government announced a world-leading

climate target to cut emissions by 57% by 2032,14 and the U.K. has been heralded

as a strong voice in favor of the Paris Agreement last December.

The U.K.’s deregulated market—along with the excellent wind resources available

in Scotland, in particular—has created an opportunity to identify attractive PPAs

for C&I buyers.15 Nestlé and Mars have both announced U.K.-based PPA deals in

the past six months.

Given high transmission and distribution costs, however, many companies have

taken the first step into offsite PPAs by developing ground-mounted solar projects

close to their operations. If a company is on a site with owned land around it,

or where land could be leased, then establishing a project with a private wire

connection to the facility can be an extremely striking proposition. Projects are

typically up to 5 MW in size, depending on various factors, such as load profile

and land availability.

Complementing this approach is the option to sign much larger offsite deals. While

energy prices are currently at extremely low levels, several organizations have

taken the view that this cannot last and that, over the life of a PPA, they will end

up “in the money”. Like their U.S. counterparts, U.K. PPAs become a practical

approach to insulating companies from expected energy price increases while

helping them meet their environmental goals.

Continental Europe: Scandinavia and the Netherlands

In June, Google announced the latest in its string of international PPA purchases,

236 MW of wind from farms under development in Norway and Sweden. Prior to

this announcement, the tech giant had executed three additional PPAs in Sweden

for a total of 241 MW and a deal in the Netherlands for 63 MW of wind. While

other corporations have not yet publicly announced any European deals, several

jurisdictions across the continent look promising.

Scandinavia and the Netherlands, especially, are most ripe for PPAs—hence

Google’s deals there. While deals may not necessarily be most attractive in their

first year—similar to the U.K.—the view is that they will yield results over the

course of the PPA contract that make them financially advantageous. With the

well-regarded GO system underpinning transactions and enabling robust reporting

of environmental attributes, the European market is one that should be on the

radar of most large multinationals.

14 Climate change: UK backs leading climate target. Retrieved 12/5/16 from

http://www.bbc.com/news/science-environment-36673894.

15 Learn more on corporate PPAs in the UK: https://www.youtube.com/

watch?v=az5cmMsMaLA

https://www.youtube.com/watch?v=az5cmMsMaLA

https://www.youtube.com/watch?v=az5cmMsMaLA


cas e stu dy

Digital Realty: A Global Company, a Global Mission

Digital Realty (DR) is a U.S.-based provider of energy-conscious data center

solutions that has taken a unique approach to handling its international footprint.

The company manages more than 140 data center properties in 32 global markets,

alongside a robust colocation services business, and is committed to energy

efficiency and clean generation across its portfolio. It is the only data center

provider to offer both its wholesale real estate and colocation retail customers the

ability to use green energy.

DR’s Clean Start program provides its customers with the choice of carbon-free

computing by bundling EACs with its domestic U.S. and international pass-through

electricity load. In the first year of any customer’s real estate lease, DR provides

these EACs at no additional cost. In 2015, the company procured 100,000 MWh

of domestic and international EACs on behalf of its customers.

The bundled electricity allows DR to pass the emissions savings onto its

customers, who receive the ability to make carbon-free electricity claims for their

leased data center space. DR also strives to match the EACs it purchases to the

geography where its facilities are located, ensuring a positive regional impact

across its international operations. All of DR’s EACs are either certified

by Green-e® Energy or GoldPower® to warrant that they are of the highest quality.

The company also executed its first utility-scale PPA in 2016. Over the 12 year

contract, the project, located in Texas, is estimated to displace more than 275,000

metrics tons of carbon dioxide equivalent. The company will use this power

to reduce the impact of 100% of its U.S.-based colocation services, allowing

colocation customers to also make carbon-free computing claims.

What is truly unique about DR’s PPA is that it was the result of customer demand.

Many of DR’s customers were interested in the benefits of clean generation

without the means to complete a PPA on their own. The DR PPA was structured

from the outset with the ability to parcel out the environmental benefits of the

PPA to its clients, allowing these customers to overcome the hurdle of scale and

creditworthiness required to execute a U.S.-based PPA.


China

All eyes are always on China. As the largest emitter of greenhouse gases by twice

more than its nearest competitor (the U.S.), and the country with the highest wind-

power capacity in the world, a conversation on international clean energy wouldn’t

be complete without at least a cursory examination of China.

As of now, the market for widespread, private (or voluntary) adoption of

renewables—either EACs or PPAs—has been limited, particularly given the

oligopoly of state-owned enterprises and lack of an underpinning REC market.

Things are changing, however. While the direction is currently uncertain, the

central Chinese government is exploring ways to increase competition and

efficiency in the electricity market. There is also a desire to create a robust REC

scheme to pair with an emission trading scheme. One thing is certain: once an

approach has been determined, implementation will follow swiftly. It is a market to

watch carefully, particularly given the vast number of U.S.- and European-based

companies with Chinese operations and suppliers.

Australia

The renewable energy market is emerging in Australia. While the country still

derives approximately 85% of its power from non-renewable sources, programs

like the government-managed GreenPower® REC scheme are helping

renewables to gain traction.

After a significant lack of investment in renewables under the previous Abbot

Government, the environment for renewable energy has been reinvigorated.

Domestic REC prices are high (c. USD $60 per MWh at present) due to lack

of supply, with no prospect of significant falls in the next couple of years. This

presents opportunities for project developers, as well as for companies willing

to take an innovative approach to deals. For example, contracts could look very

attractive indeed for a company willing to look at monetizing all or some of its

RECs. Savings could be recycled into other products or reduction initiatives.

The corporate PPA market is also growing. While there have been only a handful

of small transactions made to date, hopes are high that a more significant

transaction will be structured in the coming months. This is likely to be via an

aggregation model—where multiple corporations join together to generate

sufficient demand to structure a deal—and generated in the east coast-focused

National Electricity Market.


Singapore

Singapore suffers from obvious geographical and topographical disadvantages.

However, as a center for innovation and an importer of energy, the state is

willing to look for ways to diversify its energy mix. Corporate PPAs are possible,

as evidenced by Apple’s transaction in late 2015, utilizing aggregated solar

rooftop installations to satisfy demand for electricity. While not necessarily as

economically attractive as in other parts of the world, there are some opportunities

to tap into supply while it is available that will allow companies to meet their

significant demands for renewables in Singapore. Given the innate constraint on

supply, the opportunity will be relatively time-limited, so should be explored sooner

rather than later.

In May, Singapore announced the new TIGR (Tradeable Instruments for Global

Renewables) product. The development of TIGRs was driven, in part, by the

interests of corporate purchasers, as a means to capture environmental attributes

in the region. Like other EACs, TIGRs represent clean generation in a 1:1 MWh

ratio. TIGRs are a highly credible product, as they are backed and tracked by APX,

one of the largest and best-known global clean tech registries. Developers and

projects are vetted closely to ensure the validity of TIGRs. While only currently

available in Singapore, the TIGR product is likely to expand into other Asian

markets, and potentially elsewhere, dependent on demand. The TIGR registry has

been active since September 1, 2016.

Time to Act: Implications for C&I Buyers

While many global markets are still nascent, now is an ideal time to begin

developing an international sourcing strategy. For buyers with load or suppliers in

Mexico or India, in particular, there is a limited window to take advantage of the

most optimal contract conditions for PPAs.

In other regions, C&I buyers can play a critical role in market development by

demanding credible EACs in those areas. As of the publication of this paper,

Green-e®, the U.S. consumer protection standard for North American REC

purchasing, is developing its international framework, which will assist in the

certification of international products. Buyers can also rely on the GoldPower

and I-REC standards to ensure they are receiving products of the highest quality.

The recent release of TIGRs in Singapore demonstrates the ever-changing and

innovative nature of the EAC market.

Multinational C&I buyers can also leverage their considerable market position

by influencing governments, utilities, suppliers, and NGOs in the regions where

they operate. We’ve seen this at work already in the U.S., where both Google

and Apple have applied pressure to local utilities by supporting renewable energy

development, alongside registering their own energy subsidiaries with the Federal

Energy Regulatory Commission (FERC). This direct energy market participation

by corporations represents a sea change for an industry previously dominated by

utility commissions.


Conclusion

With energy markets all over the world rapidly expanding as policy advances,

technology improves, economies scale, and prices fall, now is an opportune time

to consider a multinational approach to renewable energy sourcing to match

multinational operations.

The great news is that there are outstanding products and projects emerging in

many international markets to support a global strategy. Contact us today to learn

more about how your organization can take advantage of this opportunity.

Renewable Choice Energy is a pioneering global supplier of renewable energy and clean technology products and services for the commercial, industrial, and institutional (C&I) sectors. The company is a proud part of the Schneider Electric Energy & Sustainability Services division, serving customers in more than 100 countries. Together, the Renewable Choice - Schneider Electric team provides unparalleled experience and expertise in strategic renewable energy execution to more organizations than any other consultancy, and has collectively advised on 2.3 GW of new wind and solar capacity worldwide. To learn more, visit renewablechoice.com and schneider-electric.com/ess.

4775 WALNUT STREET, STE . 230 • BOULDER, CO 80301877 .810 .8670 • W W W .RENEWABLECHOICE .COM

™is now

http://renewablechoice.com

http://schneider-electric.com/ess


Glossary of Developing International Products & Standards

I-REC: Developed by the International REC Standard to open markets in a number of

countries where renewable energy markets are not currently well developed.

GOLD STANDARD: New REC product in development by the Gold Standard, a certification

body established by WWF and other international NGOs to verify carbon offsets projects

developed under the Clean Development Mechanism (CDM).

GOLDPOWER®: Based on the Gold Standard for carbon offsets. GoldPower RECs are

unique in that carbon offsets are retired simultaneously with the generation of the RECs,

which gives GoldPower RECs valuable additionality.

GREEN-E® INTERNATIONAL: International certification currently under development by

leading U.S. consumer protection agency for renewable energy purchasing.

GREENPOWER®: Government-accredited renewable energy tracking system and standard

for Australia. Established for compliance purchasers, but open to voluntary buyers. Green

Power is an outstanding example of a government-run REC system; these types of

governmental tracking systems already exist, or are developing, in other regions such as

Japan and Brazil.

TRADABLE INSTRUMENTS FOR GLOBAL RENEWABLES (TIGRS): Tradeable renewable energy

certificate designed by APX, a leading infrastructure provider for environmental markets

in greenhouse gases. TIGRs will help document sustainability efforts in emerging markets

and make it easier for companies to find legitimate renewable energy projects and sellers.

While initially available in Singapore, TIGRs are expected to advance rapidly throughout

Southeast Asia and other emerging markets.

zaRECS: An emerging REC product in development for the voluntary market in South Africa.

At this time, zaRECs are administered by a private company.


Contributors

Aran Rice VP OF STRATEGIC RENEWABLES

303 .551 .7596 • ARICE@RENEWABLECHOICE .COM

Aran Rice oversees the business development efforts for Renewable Choice Energy,

where he is responsible for the Commercial and Green Building sales teams as well as the

Domestic and International Commodities Development group. Aran has served Renewable

Choice in a variety of leadership roles during his nine-year tenure, including Director of

Operations, Director of Commodities Sourcing, and VP of Business Development. With

deep expertise in renewable energy and carbon markets, Aran is directly involved in helping

Renewable Choice clients achieve complex renewable energy and sustainability goals. He

holds a BA from the University of California, Los Angeles.

Amy Haddon VP OF COMMUNICATIONS & ENGAGEMENT

303 .551 .7584 • AHADDON@RENEWABLECHOICE .COM

Amy Haddon is responsible for driving communications, marketing, and sustainability

strategy for Renewable Choice Energy. Amy also works closely with Renewable Choice

clients to design and execute communications strategies and content that highlight their

commitment to clean energy and sustainability. Concurrent to her role at Renewable Choice,

Amy served for five years as the marketing manager and a sustainability consultant for

Renewable Choice’s former subsidiary, Mosaic Sustainability, where she led consulting

engagements with several top international brands. She is a frequent contributor to the

conversations on renewable energy, sustainability, and responsible business. Amy received

her M.Ed. from Colorado State University.

James Lewis SR. DIRECTOR, STRATEGIC RENEWABLES, INTERNATIONAL MARKETS

303 .551 .7609 • JLEWIS@RENEWABLECHOICE .COM

James Lewis leads Renewable Choice Energy’s work in international markets. He has over

10 years of experience in sustainability with a background in sales, marketing, consulting,

and research. James has helped clients such as Hilton, Microsoft, UEFA, and WWF achieve

their sustainability objectives in markets including the U.K., Switzerland, India, China, and

Singapore, together with the development of the international GoldPower REC product with

WWF. James has lived and worked in the U.K., Australia, and France, and he is a citizen of

both the U.K. and Australia. He has a Masters of Environmental Technology from Imperial

College, London.

Ian Law PROGRAM MANAGER, STRATEGIC RENEWABLES

303 .551 .7590 • ILAW@RENEWABLECHOICE .COM

Ian Law is responsible for the evaluation of RFP solicitations, direct communications

with clients and developers, domestic and international market research, and project

management for Renewable Choice. Ian brings four years of experience in the energy

industry, including over three years at Renewable Choice across the Strategic Renewables,

Environmental Commodities, and Sustainability Consulting divisions of the company. He

has additional experience consulting on energy efficiency strategy for corporate & industrial

development, as well as a background in both domestic and international economic

development models. He holds a Bachelor of Arts Double Major in International Relations

and Spanish from the University of Oregon.

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