Demand for renewable energy corporate power purchase agreements (CPPAs) is growing exponentially across the world, according to the World Economic Forum. There are a number of drivers for this increase, from rising energy prices to net zero goals. But CPPAs in their current form do not necessarily deliver on their green energy labelling. Here are five ways to ensure that your company’s CPPA really does help to cut emissions.
1. Accept reality, reject the greenwash
Although the point of CPPAs is to reduce dependence on grid energy, the reality is that almost all businesses with a CPPA have a grid connection – even those physically connected to their generation assets. This is because businesses need an uninterrupted power supply, but renewable energy sources are by their nature intermittent. Grid energy fills in the gaps when the sun isn’t shining and the wind isn’t blowing. A 2022 McKinsey report estimated that a sleeved renewable CPPA makes roughly 40-70% of a company’s electricity consumption carbon-free. This is a considerable achievement, but to claim “100% renewable” energy sourcing on the strength of this would be greenwash. The remaining 30-60% of electricity consumption comes from the grid and is retrospectively “greened” through the purchase of Renewable Energy Guarantees of Origin, or REGOs. (A side note: the market is showing signs of moving away from REGOS as a way of labelling energy green – we are watching this space.)
2. Take a forensic look at the data
Given that 24/7 green energy isn’t possible yet, how exactly do you achieve the greenest possible CPPA? The key is to align your company’s energy consumption as closely as possible with renewable generation – and this means getting your hands on the data. This is where ENTRNCE can help, with our Matcher tool. The Matcher collects half-hourly data on the energy mix available to your business, whether that’s from the grid, on-site assets or a mix of sources. Then it matches it with equally granular consumption data. You can see exactly how much of the energy your business consumes actually comes from renewable sources. Warning: for many businesses it is significantly less than expected and can act as a wake-up call.
3. Seek out the best fit
As well as showing you exactly where you are starting from, the Matcher can offer options on where to go next. The tool’s powerful modelling functionality lets you explore different potential choices for your CPPA – so that you can choose the volume and renewable technology type that best meets your consumption profile. It is critical to have information in close to real time on the performance of the generation asset and the consumption of the business, in order to align them as well as possible.
This means you can see exactly how a big change would affect the carbon footprint of your business before you take the leap.
4. Adjust to stay on course
Decarbonisation is a journey, not a one-off action. It’s fine to make changes gradually, continually monitoring progress and occasionally adjusting your strategy in line with the data. The Matcher allows you to keep tracking the effectiveness of your decarbonisation measures, and this data feeds into the modelling functionality for ever more accurate simulations.
5. Don’t forget consumption
Aligning demand with renewable generation means optimising both sides of the coin: not just greening your supply but adjusting demand. Reducing absolute energy use through building or process improvements will automatically cut your energy-related emissions. But so will clever timing. The Matcher will tell you when your energy sources are generating the greenest power, and you can use this information to schedule your most energy-intensive processes.
Getting the greenest possible CPPA in place means taking a hard look at the data and being prepared to act on it. The reward will be measurable results and positive progress towards net zero. To see how the Matcher can help your business with this, book a demo with us.
