Kaiser Permanente recently announced that it is buying renewable energy that is expected to satisfy one half of its electricity consumption in California.
The healthcare company inked a deal with NextEra Energy Resources for the construction of two power plants.
The contract between Kaiser Permanente and NextEra calls for one plant designed to generate 110 megawatts of solar power, and another plant to supply 43 megawatts of wind power.
This project is unique in terms of its origins and also informative for other companies desiring to satisfy their renewable energy objectives. It is also a bright example of the progress in clean energy pushed by the Business Renewables Center.
This RMI-organized outfit is tasked to accelerate corporate purchase of off-site clean energy through the cooperation of project developers, corporate buyers, and service providers. NextEra and Kaiser are founding members of the BRC.
Kaiser believes that climate change is a health issue.
This company cites the example of the adverse effects of emissions from fossil fuel-powered energy generators. Air pollution is its direct effect, and global warming is its indirect effect. Both are important elements that affect human health.
Kaiser is therefore leading the corporate world by example as it aggressively pursues clean energy to cut down its own carbon footprint and encourage other companies to do the same.
A major step was taken by this company in 2012 towards this objective by adopting a sustainable energy policy having a target of cutting down its greenhouse gas emissions to 30 per cent below 2008 by 2020.
It started by focusing on increasing the company’s energy efficiency, onsite generation and other means of purchasing clean energy. While trying to achieve this objective, the company realized that there’s more that needs to be done.
“As an organization that is constantly adding members and building hospitals and medical offices, achieving our 30-percent greenhouse gas reduction goal was not possible through energy conservation and distributed generation alone,” laments Ramé Hemstreet, Kaiser’s Chief Energy Officer.
“Reduced energy intensity was being offset by new facilities and equipment, and even Kaiser Permanente has only so many roofs and parking lots that can accommodate sola,” he explains.
The company realized that one of the best ways to solve the problem is by buying off site green energy.
It had made the necessary preparation in previous years by reducing its greenhouse gas emissions, and buying power purchase agreements with utility companies.
How did Kaiser Permanente realize its goal to procure off-site renewable energy? It had wisely laid the groundwork by establishing its motivation (the 2012 policy and emissions reduction target) and building internal familiarity through the experience of doing power purchase agreements for on-site generation.
Even so, this was a significant transaction that required strong and wise leadership, extensive expertise, and the right combination of patience and perseverance.
Kaiser’s negotiating team used the right external advisers, identified potential project developers to partner with, issued the request for quotation (RFQ), finally choosing NextEra Energy Resources as the best developer, and worked with NextEra to strike a deal that is financially rewarding for both parties.
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