Transparent Energy Helps Fortune 10 Client Achieve Key Sustainability Goals through Online Reverse Auction for Advanced Renewable- Energy Product

Online auction brings liquidity and transparency to opaque renewable-projects market, enables Fortune 10 company to save seven-figures on clean-energy purchase from local solar farm.

Introduction

As the trusted energy advisor and energy-procurement expert for thousands of companies, government entities, and building portfolio holders, Transparent Energy has found itself being asked the same question with increased frequency and urgency:

“You’ve done a great job helping us buy traditional electricity, natural gas, and renewable energy certificates (RECs), but can you help us procure even more clean energy to help us move the needle on our sustainability goals and carbon-reduction pledges?”

The answer is “yes” and includes a variety of renewable energy products, from carbon offsets and community solar to on-site solar (both roof and ground-mount), VPPAs, and an emerging locally-sourced product category Transparent Energy recently transacted for a Fortune 10 client.

Upping the Renewable Energy Ante

After two years of running successful auctions for traditional electricity and natural gas for a Fortune 10 client, Transparent Energy had a big idea it thought its client would like. The client had two sites located close together in Texas with electricity contracts coming up for renewal in 18 months. The sites just happened to be near a large solar farm. Putting two and two together, Transparent Energy asked the client if it would be interested in buying power, and the RECs associated with that renewable energy, from a local site.

While such an arrangement would not create “additionality” – the solar farm in this instance had already been built and was in operation – it would establish a commitment for the client at the local level with a renewable resource that fed into the local grid.

The client liked the concept, but could Transparent Energy orchestrate a deal that a) would limit the premium paid for the clean power, b) would not lock the company into a 10+-year deal, and c) would avoid the complexities of a power purchase agreement (PPA) or virtual power purchase agreement (VPPA)[1]?

Again, the answer was yes.

The Power of Auction-Based Renewable-Energy Procurement

Transparent Energy got into auctioning power and natural gas to help solve one fundamental problem with procuring energy: opacity. Energy buyers had always been disadvantaged in the procurement process, because they had no way to price the market or know if they were getting a good deal. Transparent Energy changed this dynamic with live auctions that pit energy suppliers against each other to win the client’s business and where every bid by every supplier was seen by the client. These live auctions provide clients price discovery found nowhere else in the market and a competitive dynamic that drives down the price they pay for energy. 

Transparent Energy applied these same principles to the renewable-energy contract its client sought, using its proprietary auction process and platform to create a competitive, transparent marketplace.

The RFP attracted 10 reputable suppliers to the bidding event, each of whom was ready to offer a renewable-energy contract to the client using a local nameplate renewable energy project in their respective portfolios.

Over the course of 35 minutes, the 10 suppliers placed 146 unique bids to win the customer’s business, driving the price down over 20% – a savings of more than $1 million over the resulting three-year term (Note: the auction tested pricing over various term lengths, running from 12 months to 60 months; the client chose the winning price for the 36-month term based on its business needs). As a result of the auction, the client walked away with a simple contract for 60,000+ MW of clean power from a local resource that every one of its employees could drive by on their way to work.

Transparent Energy checked each box on the client’s wish list: clean power at scale from a local, named renewable project; an affordable price; and a simple contract for a desirable term length.

“We are enjoying our work with Transparent Energy, because they are proactive, creative, and always fighting for our interests. Right now those interests include making major commitments to sustainability, and Transparent Energy is helping us blaze that trail in an economically sound and environmentally impactful way.”

With new projects that create additionality on its wish list for 2024 and beyond, this client is looking forward to building on the major milestone of its recent renewable-energy success, updating its Renewables Roadmap to include more high-impact solutions, and teaming with Transparent Energy to execute it all flawlessly to meet is Sustainability goals.

###

[1] Transparent Energy is adept at transacting an array of renewable-energy products/contracts, including VPPAs, and works with clients to determine the product that is right for them. For a recent VPPA example, see (insert link to our VPPA press release).