STRATEGIC PARTNERS
June 5, 2019
Starbucks is making good on its promise to run more energy-efficient stores. The chain has partnered with LevelTenEnegry to allow 3,000 U.S. locations to rely on clean power by 2021. The portfolio, which includes wind and solar farms in North Carolina, Oklahoma and Texas, is custom-built for Starbucks using LevelTen Energy's technology-enabled procurement platform that aggregates three power purchase agreementsfrom three distinct project developers, according to a company press release.
This deal is a first-of-its kind aggregation model that is democratizing the historically opaque renewable energy buying process, Bryce Smith, founder and CEO of LevelTen Energy, said in the release as it allows a corporate buyer (Starbucks) to simultaneously procure a fraction of the power generated by multiple energy projects. Until now, the purchasing model has been one corporate buyer to one energy project, giving only a select few the opportunity to participate.
"As we continue to strive towards building and operating the world's largest green retail business, we know we need to find innovative business models to achieve our renewable energy goals," said Patrick Leonard, energy manager for Starbucks company operated stores in the United States and Canada. "Not only does this portfolio model allow us to support new solar and wind farms that will deliver the clean energy equivalent to the electricity powering over 3,000 stores, it also opens the door for many new buyers to cost-effectively source smaller amounts of renewable energy."
The portfolio incorporates 146 total megawatts from three renewable energy projects: 50 megawatts of wind power from an ALLETE Clean Energy project in the SPP market, acquired from Apex Clean Energy; 50 megawatts of solar power from a Cypress Creek Renewables project in the ERCOT market, and 46 megawatts of solar power from a BayWa r.e. project in the PJM market, according to the release.
As more corporate and industrial entities seek to procure renewable energy, longtime buyers like Starbucks help guide the industry by supporting innovative PPA deal structures. The portfolio model — much like a mutual fund — minimizes risk and allows buyers to capture the scale pricing benefits of the country's largest, most economically attractive projects. The geographical and technological diversification inherent in a portfolio also better complements' Starbucks' energy footprint and strategy, Smith said.
"The Starbucks portfolio PPA demonstrates the promise of new renewable energy purchasing models," he said. "Starbucks is setting an important precedent in the corporate energy procurement space by demonstrating how a single off-taker can safely and easily procure shares of renewable energy from a variety new wind and solar projects. This approach enables many more corporate and institutional buyers to support, in a fiscally responsible way, the massive buildout of new clean energy projects across the globe."
