How To Overcome Green Energy Procurement Challenges

Energy procurement is a critical component of business climate leaders' emissions reduction strategies.

FREMONT, CA: Green energy procurement is a popular topic at the moment, as businesses the world over want to be seen as contributing to the battle against climate change. The procurement department is constantly changing as workers change employment, leave the company, or downsize teams due to budget restrictions. This trend has resulted in a surge in demand for green energy, which can be purchased through outlets such as Power Purchase Agreements (PPAs) and green certificates. Without a long-term strategy, procuring green energy will not produce the desired benefits.

Different personnel has distinct personal objectives and motivations, which implies that two different energy procurement managers may have wildly divergent views on what constitutes green energy. Without a long-term green energy procurement plan, it is possible that the type of green energy and its impact could change on an annual basis.

Developing a strategy also communicates to consumers and suppliers that the organization is committed to combating climate change. And it provides an opportunity to chart a course for obtaining high amounts of clean energy in a reasonable amount of time.

Previously, the barriers to green energy procurement were a lack of renewable energy on the grid and a high cost of renewables. Where renewable energy is not available through the grid, businesses desiring to employ green energy must generate it on-site through distributed energy resources (DERs). DERs were once significantly more expensive and difficult to install than now. Fortunately, green energy supplies have grown significantly more affordable and easy to integrate across portfolios in recent years.

Consider some challenges and their solutions below:

Negotiating procurement contracts: Due to the technological nature of the energy business, providers of energy typically have the upper hand in procurement contract talks. Confidence in negotiation requires a thorough awareness of both the contract's conditions and available alternative procurement options.

Solution: Enlist the assistance of an experienced third party: Utilizing a third-party adviser to assist companies in navigating the sometimes treacherous waters of green energy procurement contracts can save businesses time, money, and a great deal of aggravation.

Choosing a strategy: To avoid going into green energy procurement blindly, it is critical to establish a clear approach early on. For instance, consider the purpose of green energy acquisition. Has it cost savings, sustainability, or a combination of the two? Additionally, how will companies assess and verify the procurement effort's success? Clearly articulating the objectives and devising a strategy to accomplish them might be challenging.

Solution: Work with an energy and sustainability management business: A sustainability and energy management business can assist in developing a strategy.