Rocky Mountain Institute has released a case study on how the rollout of large-scale renewable energy projects can positively impact on the environment and firms' social responsibilities.
The study was conducted through the institute's Business Renewables Center.
The programme interviewed Cummins and EDP Renewables on how the two signed a virtual power purchase agreement in August 2017.
The agreement includes EDP renewables providing Cummins with 75MW of wind capacity for a period of 15 years.
The study highlights:
- Virtual power purchase agreement as a high-impact procurement option for renewable energy projects to meet sustainability goals
- Compares VPPA to other energy procurement measures including renewable energy certificates and utility contracts
- A cost-benefit framework to select high-impact renewable projects
In selecting which energy procurement process to adopt, Cummins looked at whether the measure would help the firm to:
- Drive the development of new clean energy projects
- Reduce total costs of expanding the renewables portfolio
- Provide stakeholders with tangible impacts on sustainability goals
The case study also highlights how a VPPA works and its advantages, for instance how buyers can avoid energy price variability by paying a fixed price for energy generation and supply over a certain period of time.
Mark Dhennin, director of energy and environment at Cummins, said: “To get this deal done we had to strike a balance between community benefit and environmental impact on one side, and financial risk on the other side.
"The cost-benefit framework enabled Cummins to identify the project with the highest impact and an acceptable net financial impact."
The firm's sustainability goals include:
- Reduce water use intensity by 33% compared to 2010 levels in all its 15 facilities by 2020
Cummins estimates 0.5 gallons of water are consumed per kWh of conventional electricity and the VPPA will save over 70 million gallons of water in the region each year, enough to serve a 2,000-person town.
2. Reducing energy use and carbon emissions by 32% by 2020
The case study is available for download here...