Utilities keep pace

Looking for strategies as the world goes solar

Part of any business’s foresight is the ability to accommodate the evolving technological and economical world around it. When renewable energy first began to peek through the cracks two decades ago, utilities companies probably weren’t too concerned, but they surely took notice. The electric and water industries are some of the most directly affected by the rise of solar energy and wind power. Check back ten years later, and they had all begun to realize they needed a legitimate corporate strategy to keep pace. Now, we see those strategies beginning to unfold.

One of the main issues for utilities has been corporations reaching around them to independent holders for their solar power. These companies are known as IPPs (Independent Power Producers). They have popped up in deregulated markets at openings where the utilities don’t have the required provisions for large companies’ solar demands. Corporations up to the biggest in size, such as WalMart, Apple, Verizon, and Costco, have turned to IPPs instead to accommodate their increasing solar needs. Amazon, HP, and Microsoft have all made wind power agreements in the past year.

Herman Trabish of Utility Dive, a website covering utilities industry news daily with original analysis, spoke with Justin Baca of the Solar Energy Industries Association (SEIA) regarding the recent Paris COP21 summit and the SEIA’s quarter 3 report on solar energy.

Baca, Director of Research, mentions that his association’s most recent report concerns distributed power generation but notes that Apple just signed a 130-MW deal for its California headquarters, saying “it clearly needs the utility and its wires to deliver that electricity.”

This is the engaging topic of Trabish’s article, reported on Monday. Trends and research from the SEIA show that many corporations are now integrating utilities more frequently.

An integral method to this trend is “solar assets” which are purchased by real estate groups and other companies who have a surplus of space but not a high usage rate. These companies purchase properties, or use ones they already have, to build grid-connected solar power sources which they then sell into wholesale electricity markets through utility PPAs (Power Purchase Agreements). In doing this, utilities become directly involved by working together with solar or wind power. They contract the power purchase agreements and partner with solar providers to build centralized projects on large sites, and then connect them through a grid. Utilities have pre-existing distribution networks they can channel the energy to. Research shows that developing corporate plans call for “increased purchasing options with utilities,” Trabish says. New programs “allow large customers to offset some or all of their utility-delivered electricity with power from renewable generation facilities.”

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