Key Takeaways
- Companies can combine PPAs, green electricity contracts, separately purchased Guarantees of Origin and on-site generation to meet different energy needs.
- A renewable energy procurement strategy should reflect the company’s consumption profile and business objectives.
- An effective procurement strategy starts with consumption data and aligns contract choices with cost targets, emissions goals and risk appetite.
- Windly supports companies throughout the procurement process, from setting objectives to signing contracts.
What Is Renewable Energy Procurement?
Renewable energy procurement is the process through which a company acquires energy generated from renewable sources for its operations. Corporate renewables procurement may cover electricity generated from wind, solar or hydropower. Companies can procure this electricity through PPAs, green electricity contracts or on-site generation, while Guarantees of Origin verify its renewable origin. The company must determine where the energy comes from, how long it will commit to the purchase, how the price will be set and how the renewable origin will be verified. The chosen procurement model also affects costs, predictability, risks and emissions reporting.
How Can a Company Procure Renewable Energy?
A company can build its renewable energy portfolio around one procurement method or combine several solutions across different sites and consumption needs. The most suitable commercial model depends on consumption volumes and timing, site locations, budget, environmental targets and risk appetite. For example, a company may hedge part of its electricity consumption through a PPA, use green electricity contracts for smaller sites, purchase Guarantees of Origin separately for remaining consumption and complement the portfolio with on-site solar power. Next, we examine the key differences between these procurement methods.
- A PPA can link Electricity Procurement to a Specific Generation Asset
A PPA, or long-term Power Purchase Agreement, can link a company’s electricity procurement to a specific wind or solar power project. The European Commission expects PPAs to support the growth of market-based renewable energy generation in the coming years. Read more in our article: What Is a Power Purchase Agreement (PPA)? - Green Electricity Contracts and Guarantees of Origin Verify Energy Sources
Under a green electricity contract, a company purchases both electricity and the Guarantees of Origin that certify its renewable source. Guarantees of Origin can also be purchased separately from the electricity supply. To ensure credible renewable energy claims and prevent double counting, the company should verify the generation technology, geographical origin, and the party responsible for cancelling the Guarantees of Origin on its behalf. - On-Site Solar Power Complements a Company’s Energy Procurement
Under a green electricity contract, a company purchases both electricity and the Guarantees of Origin that certify its renewable source. Guarantees of Origin can also be purchased separately from the electricity supply. To ensure credible renewable energy claims and prevent double counting, the company should verify the generation technology, geographical origin, and the party responsible for cancelling the Guarantees of Origin on its behalf.
How Does a Company Build a Renewable Energy Procurement Strategy?
A company builds its renewable energy procurement strategy around consumption data, business objectives and an acceptable level of risk. The planning process determines how much renewable energy the company will procure, how it will be produced and how long the company can commit to the arrangement. The process follows five stages:
- Review electricity consumption and existing contracts.
- Define cost and emissions targets.
- Compare PPAs, green electricity, Guarantees of Origin and on-site generation.
- Select the pricing model, contract term and risk allocation.
- Run a competitive tender and monitor procurement performance.
What Are the Benefits and Risks of Renewable Energy Procurement?
| Procurement method | Pros | Cons |
| PPA | Improves long-term electricity price predictability, often supports investment in new renewable energy projects and includes Guarantees of Origin | Requires a long-term commitment and involves price, volume, consumption profile and counterparty risks |
| Green electricity contract / Guarantees of Origin | Provides a simple and flexible way to verify the renewable origin of electricity. The additional cost and business risk are usually low | Does not protect against price changes of electricity or Guarantees of Origin.Generally provides limited support for the development of new renewable energy generation |
| Own production | Reduces the need to purchase electricity from the market, gives the company direct control over generation and visibly demonstrates its commitment to renewable energy. Enables cost savings in transmission and taxes. | Requires upfront investment, maintenance and a suitable site. The production volumes are often only a small part of the targeted renewable energy volumes |
How Does Windly Support Renewable Energy Procurement?
Windly helps companies navigate renewable energy procurement primarily through Power Purchase Agreements (PPAs). We support our clients throughout the entire process:
- Defining PPA objectives together with the client
- Analyzing the consumption profile and identifying the contract structure that best fits commercial goals and risk appetite
- Structuring pricing, contract term, volume structure and risk allocation
- Preparing the request for proposal (RFP) and identifying suitable counterparties
- Leading negotiations through to signing
As stated on our website, we operate fully independently — we hold no equity in energy projects and maintain no ties to lenders. Our advice is based solely on the client’s commercial objectives, consumption profile and acceptable level of risk.
Contact us when you want to compare procurement options or launch a competitive tender.
Considering a PPA? Windly is commercial advisory company focusing on PPA’s. We are representing both energy buyers and renewable energy producers and developers. Contact us to discuss your specific situation.
