By directly investing in renewable energy assets, the producer of renewable energy may simultaneously become the Off-taker in case the energy output and energy attribute certificates are used for their purposes.
Direct investments in renewable energy projects were the primary type for procuring Energy Attribute Certificates and green electricity.
Direct Investments – Basic Structures Source: Think RE GmbH, © Think RE GmbH
However, the trend now shifts towards power purchase agreements due to smaller upfront costs and more flexible accounting treatment.
The most obvious way to prove your green energy consumption is to build a power plant directly on your corporate site with a cable directly linked to your production facility or office building. However, these direct investments may induce several hurdles.
Find some of them below:
- The available space on corporate electricity consumers' sites is commonly too small for installing enough renewable capacity for their entire electricity load (e.g., roof-top solar).
- Corporate electricity consumers often lack the resources necessary to directly establish a reliable evaluation process to invest in the RIGHT opportunity.
- To establish a proper electricity balancing, meaning matching the green power production with your consumption every second, requires a storage solution that increases your investment costs.
Global Overview of Direct Renewable Investments– Basic Structure Source: Think RE GmbH, © Think RE GmbH
Note that Direct Investments do not automatically imply that the renewable energy plant is built on the company's site (onsite). It is also possible that the plant and the energy-consuming assets are located at different places (offsite).
In this case, a third party (called a Balancing Responsible Party) like a utility has to be included to "physically transfer" the green electricity to the exit point where it is consumed.
Independent from the geographical setup, the problems related to Direct Investments remain unresolved for most of our clients, making direct investments only a limited way to become a Renewable Champion.
According to the International Renewable Energy Agency (IRENA), the active market for direct investments accounts for an annual global volume of more than 170 TWh, equalling 2.5% of the annual total renewable energy production.