Buying Renewables: How Leaders are Shifting Energy from a Cost Center to an Asset
When it comes to renewable energy, green power is reaching cost parity with brown power, which presents a great opportunity for organizations to transition to renewables. But the truth is the the entire energy marketplace is rapidly shifting for everyone because of three trends: decarbonization, decentralization, and digitization. How can procurement help ensure organizations are taking advantage of the opportunities being opened up while avoiding the possibility of over buying, or making long-term investments with more risk than potential reward? Leading organizations are taking an integrated approach to buying and using energy, a concept known as Active Energy Management (AEM). By bringing sustainability, energy, and procurement teams and resources together, organizations can develop a cohesive strategy, and collaborate on related programs and projects. They gain a complete picture of environmental and bottom-line impact, harness opportunities to trim consumption and costs — and can even shift energy from a cost center to an asset.
The University of California’s 10 campuses and 5 health systems have committed to making their on-campus operations entirely carbon neutral by 2025. As progress toward this goal, UC now receives renewable energy from 88 on-campus systems and 5 utility-connected sources. UC’s campuses generate more on-site renewable energy than any other US university. Building on those accomplishments, UC established a new policy goal to purchase 100 percent clean electricity by 2025. This goal has prompted the UC system to complete its largest-ever procurement for renewable electricity. Meanwhile, the State of California has mandated that California’s utilities switch to clean electricity by 2045. What’s the optimal purchasing strategy for the University of California under rapidly evolving market conditions? David Phillips, UC’s Associate Vice President of Energy and Sustainability, will summarize successes and challenges from 10 years of renewable energy purchases and reveal the University’s latest thinking and the actions taken to finalize seven new utility-scale renewable electricity and biomethane projects. Decision-making within a decentralized large organization like the University of California is often complex and slow. The presentation will describe how UC established a centralized energy services unit, governed by campus administrative and financial leaders, to support quick, collective action by the 10 campuses and 5 medical centers.