A Guide for Renewable Procurement Process

Leading practices are important in assembling a corporate renewables procurement team and driving the procurement operation.

FREMONT, CA: Successful renewables procurement needs a cross-functional team from power, sustainability, facilities, legal, finance, accounting, marketing functions, and a defined evaluation and purchasing process. A renewables purchase can save enterprises money and assist in transforming our collective energy system. But it launches new technologies and unfamiliar contracting methods to an organization that may lack renewables procurement knowledge and expertise. Typically, the renewables buying process introduces a series of questions that affect the energy, sustainability, and facilities functions and the legal, finance, and even marketing departments. Here is how to succeed at renewable procurement.

In the first phase, the focus is to build organizational buy-in and a shared understanding of the reasons for procuring renewables. It will differ by organization, but the business case for procuring renewables involves a mix of advantages, including cost savings, carbon reductions, energy price or hedging, increased resilience, and reputation improvement, which widens to consumers and employees. The renewables champion may start the process without having yet won the help from senior leaders to bring together a team and start the procurement process.

In this scenario, the priority is to put together a compelling business case for the firm and make a case internally until the champion has secured the green light to start and confirmed that an executive sponsor is in place. In other cases, the process will have been started from the top or another senior leader who believes the firm should procure renewable energy, or at least explore the options in-depth. Without that shared understanding, the project can stall when complex questions are asked, and hurdles emerge as they often do. The executive sponsor can play a vital role in the primary phase by helping the renewables champion to develop support across the organization.

Enterprises are faced with several different options as they begin to consider their renewables procurement method, including, for example, technology options, project ownership or leasing, renewable power credit ownership, and siting options. The team will require considering the several options through a systematic process that assess potential methods and avoids those that do not fit, and focuses on the most attractive alternatives given the firm’s energy needs, the desired amount of renewables, site considerations, ROI demands, and relative priority of other potential advantages. It is often advantageous to work with an external expert to bring a robust set of alternatives to the table for consideration.

See Also: Top Companies