Understanding and evaluating your options for offsite renewable energy solutions– which have never been more affordable, especially for C&I organizations – can be challenging. To demystify the process, JLL’s Lauren McAdam outlines why direct access service may be the best offsite renewable option for your business.
What does Direct Access Service entail?
With Direct Access Service, organizations enter into an Energy Supply Agreement (ESA) with the Energy Service Provider (ESP) for their electric supply, and the Utility continues to deliver the electricity through its transmission and distribution systems.
The diagram below illustrates the relationship between offsite renewable energy assets and the Utility.
What are the benefits of a Direct Access Service program?
- Customization: The ESA gives customers a tailored energy product to fit their particular needs, while also offering flexibility to negotiate pricing terms and structure, risk allocation, and the term length.
- Flexibility: Contracts can be cancelled, transferred to other locations, or the electricity can be sold to the market (often at a profit).
- Budget certainty: Offsite Power Purchase Agreement (PPA) volumes can be set to a level that provides a cushion of energy price security. The electricity market is extremely unpredictable – and using historical data to predict future trends can be a slippery slope. The ability to procure only a percentage of the total volume consumed through offsite renewable energy contracts gives clients a sense of comfort (and greater energy cost certainty) in being able to balance fixed energy contract pricing and future day market pricing.
- Sustainability: Integrating a direct access service program as part of your energy management approach also helps you to achieve your sustainability objectives – especially when it comes to reducing your carbon footprint or cutting back on greenhouse gas emissions.
- Reliability: Transmission and distribution continue to be regulated and assured by the local Public Utilities Commissions and Regional Transmission Organizations.
Several large corporations have procured massive amounts of available subscriptions (Google, HP, and Facebook, to name a few) and many more C&I clients are exploring offsite generation opportunities. According to the American Wind Energy Association, 1,800 MW of new wind PPAs were signed since January 2015, of which 75% (or 1,350 MW) was signed by C&I customers for offsite electricity. Moreover, the Solar Energy Industry Association reported that the top 25 corporate purchasers of solar power doubled their capacity since 2012 to 569 MW.
The Alternative Energy Services (AES) team at JLL has strong relationships with offsite renewable energy developers who possess existing wind and solar assets that can be taken advantage of today, as well as the ability to procure additional offsite assets in markets where our clients reside in order to meet their regional needs. Contact an AES team member today to discover your carbon reduction and energy savings opportunities through alternative energy.
Lauren McAdam is a Project Manager for JLL’s Alternative Energy Services (AES) group. In this role, Lauren supports alternative energy projects by distilling data and reports into customer-centric materials, identifying project feasibility and potential savings, and curating the relationship between AES and our business partners and clients during RFP preparation and project implementation. Lauren is a LEED Green Associate.