How 8 corporate buyers are keeping an aging wind farm on the Texas grid

Eight companies committed to buying renewable energy are combining their purchasing dollars to help refurbish a 55-megawatt wind farm in Big Spring, Texas, which would otherwise have been decommissioned.

Under the contract, brokered by Seattle-based startup Ever.green, the companies have pledged to buy a portion of the renewable energy certificates (RECs) that will be issued by the Ocotillo Windpower facility over the next five to 10 years. RECs represent one megawatt-hour of renewable electricity and can be traded like carbon credits.

The buyers include distributor Arrow Electronics; software firms Atlassian, Autodesk and Medallia; apparel maker Brooks Running digital agency Compose[d] Creative and tech company Trimble.

All plan to count the RECs toward their Scope 2 emissions reduction commitments. For Brooks Running, the purchases will cover 80 percent of the energy used annually by its headquarters and two stores in Seattle, and its distribution center in Indiana, said David Kemp, director of corporate responsibility.

“The amounts we need to procure are very small, so large-scale projects didn’t make sense,” Kemp said. “[This contract] makes getting into procurement more accessible.” Brooks previously looked into negotiating a power purchase agreement, but “when we started to share our volumes, the interest declined quickly,” he said. 

Making the finances work

The Ocotillo farm began commercial operations in 2008 and was nearing the end of its life, largely due to aging equipment. It was purchased in 2020 by developer Clearway Energy, which last year upgraded blades, generators and turbine drive trains across the site’s 26 turbines to boost its generation capacity and keep it in operation.

The long-term contracts will provide the developer with a stable source of income. That’s important for making the project feasible: The Texas grid is so competitive that wholesale energy prices dip below zero during peak production periods, according to Michael Leggett, co-founder and chief operating officer of Ever.green.

“We have made it financially more attractive,” he said. “This project was dead until this happened.”

Another factor making the deal possible is the Inflation Reduction Act, which extends tax credits to wind installations receiving an upgrade such as the one at Ocotillo. This sort of update could be performed on up to 20 percent of the existing onshore wind fleet by 2028, according to researcher Wood Mackenzie.

Small buyers welcome here

One selling point that won over the buyers was the ability of companies with small electricity requirements to participate. The contract lengths vary for the project, with the smallest covering just 1,000 RECs annually, or 1,000 megawatt-hours (the amount of energy used by 100 homes).

While close to 309,000 companies bought RECs to support their renewable energy goals in 2021, just 613 were able to participate in the sorts of massive power purchase contracts signed by companies Google, Microsoft or Amazon, the largest corporate buyer of renewable electricity in 2023.

“We had this idea that we wanted to drive for impact,” said Duncan Williams, corporate sustainability manager at Trimble. The company uses a solar array to cover power consumption at its North American headquarters in Colorado. “This project does a lot of wonderful things alongside the core requirement of covering our load.”

What makes this deal unique

The fact that the project wouldn’t have happened without corporate support was appealing for the buyers. This is the third deal Ever.green has orchestrated in the last two years. Deals generally take three to six months to pull together, Leggett said.

Ever.green aims for deals with:

• Material impact, meaning that the contracts improve the unit economics for a project by at least 10 percent; and
• Contractual accountability that holds the developer liable for breaches of Ever.green’s impact scorecard, which rates projects for environmental, economic and social benefits.

Ocotillo’s support of good-paying jobs and the developer’s reuse of existing infrastructure, such as the concrete footings, to minimize the environmental impact and get energy onto the grid quickly was appealing, said Jason Parkin, founder, president and CCO of Compose[d] Creative, the smallest buyer in the deal.

Many new solar and wind projects have been stalled by permitting issues. There is also a long queue of projects waiting to be connected to the U.S. grid, a backlog of almost 2,000 gigawatts by the end of 2023. “We were looking for a way to support genuine, systemic action and wanted to show that even small companies, like we are, can do this,” Parkin said.