Fossil fuels have contributed to both the instigation of global conflict and the perpetuation of worldwide climate change. These as well as other residual factors are forcing public and private entities to assess the validity of investing in renewable energy.
Some enterprises have consulted procurement services to determine whether partaking in multiparty wind energy financing is economically feasible. This requires a thorough analysis of projected return on investment, the cost of installation, the labor and skill sets needed to support such an endeavor and how current energy sourcing will be transformed or manipulated.
North American view
During last year's American Wind Energy Association's WINDPOWER 2013 conference in Chicago, Greg Pool, Walmart senior manager for renewable energy and emissions, asserted the discount retailer's intent to invest in wind energy, North American Wind Power reported.
"Energy is our second largest controllable expense," said Pool, as quoted by the source. "If we can control that, it has a big impact on the profitability of our company."
So far, power purchasing agreements - contracts between a business that produces electricity and an enterprise that intends to use it - appear to be the most popular strategic sourcing model in regard to wind. This way, interested parties don't have to buy energy from utilities and can validate their claims to the public.
Is it profitable?
Green initiatives and good intentions are all positive public relations, but enterprises are asking their procurement process advisors whether they'll receive a sizable return on investment. According to The Star, Kenya plans on installing 20.5 megawatts of wind energy in the near future, starting now.
The Danish Business Network will work with the Kenyan government to help authorities obtain the labor and resources necessary to fund a wind installment project comprised of 13 sites - a $204,800,000 endeavor.
Kenyan Renewable Energy and Petroleum Director Isaac Kiva asserts the initiative will reduce consumer electricity costs 40 percent and foster reliability. Over the next three years, approximately 460 MW of wind energy will be funneled into Kenya's national grid.
It's not uncommon to hear homeowners complain of the wind turbines towering over their backyards. Many people see the machines as eyesores, and they reduce the value of homes.
In response to this criticism, many businesses and consumers alike have advocated for the installation of offshore wind (OSW). Not only does this mitigate property concerns, it also enables organizations to construct more turbines in a concentrated location.
How to go about it
With OSW considered, how should interested parties conduct themselves during the RFP process? In 2012, Clean Energy States Alliance was contracted by the OffshoreWind Accelerator Project to produce a white paper detailing best practices in regard to procuring OSW.
The study maintained that when buyers networks participate in the user end of a PPA, it results in the following benefits:
- Collaboration: Joining forces with two or more organizations interested in purchasing OSW energy can expedite negotiations and increase investor confidence in the feasibility of an OSW project. Municipalities, government entities and enterprises alike can collectively streamline contract agreements.
- Reduction: The more investors on board with an OSW procurement project, the less the produced energy will cost in the long run. For example, a buyers network can better source the skilled labor needed to expedite installation and decrease concentrated risk. The study found this approach lowers the levelized cost of OSW energy by nearly $35 per megawatt hour.
- Connectivity: If a network is comprised of municipal utilities, entities partnered with state power authorities can sell tax-exempt bonds and use the revenue to fund the energy purchase.
As one can see, procuring wind is certainly a feasible option. It simply depends on what kind of strategy organizations employ.