Banding Together: How Aggregation Helps Cities Buy Renewables at Scale
By Yuning Liu & Mia Reback
In March 2021, 24 local governments in Maryland joined together on a plan to purchase enough renewable energy to power more than 246,000 homes a year. They did this by issuing a joint request for proposal (RFP) through the Baltimore Regional Cooperative Purchasing Committee (BRCPC) to seek a supply of up to 240,000 MWh of renewable energy starting in 2022. This large-scale transaction was made possible by an energy procurement approach known as energy aggregation, which is a way for two or more buyers to purchase electricity from a utility-scale generation facility.
According to the new Intergovernmental Panel on Climate Change (IPCC) report, greenhouse gas emissions (GHGs) must peak within four years to limit global warming to 1.5°C, and cities have a critical role to play in meeting that target. Aggregation can be a powerful way for cities to rapidly increase their renewable energy and help decarbonize local economies at the necessary speed and scale. Yet most cities have not pursued aggregation due to an inadequate understanding of its novel deal structure and a lack of tools and resources to help streamline the process.
Aggregation can be a powerful way for cities to rapidly increase their renewable energy and help decarbonize local economies at the necessary speed and scale.
To help cities overcome these barriers, last year the American Cities Climate Challenge Renewables Accelerator, an initiative co-led by RMI and World Resources Institute, began organizing a Large-Scale Renewables Aggregation Cohort. This cohort provided technical assistance to more than 30 organizations, including the BRCP. A second iteration of the cohort is now underway with a new group of organizations. In addition, a newly released RMI report, Procuring Large-Scale Renewables through Aggregation: A Guide for Local Governments aims to help more cities understand and pursue aggregation.
As more and more cities take actions to decarbonize the electricity system, aggregation will be an increasingly important option that can provide buyers with several advantages, such as opening doors for smaller cities, creating positive network effects, and unlocking more cost savings.
Enabling Smaller Buyers to Access Large-Scale Projects
Aggregation can enable participation from smaller cities that, on their own, are not able to purchase enough electricity to warrant the attention from developers. This is particularly important for smaller communities with 100 percent renewable energy goals, as most municipalities cannot supply 100 percent of their electricity needs with on-site solar generation alone. Therefore, a utility-scale, off-site procurement will be an essential component of many smaller buyers’ decarbonization strategy.
One instance of a small buyer accessing large-scale renewables projects is a 25 MW joint solar purchase completed by MIT, Boston Medical Center (BMC), and Post Office Square (POS) in 2016. In this aggregated deal, MIT committed to buy 73 percent of the power generated by the new array, with BMC purchasing 26 percent and POS purchasing the remainder.
“Entering into a renewable power purchase agreement was our next step, but our consumption is too small to do it alone,” said Pamela Messenger, general manager of Friends of POS. “It is exciting to join forces with two industry leaders, allowing us to mitigate 100 percent of our electricity footprint.”
Similarly, other smaller local governments have also used aggregation to gain access, such as five local governments in Maine. They teamed up for the state’s first multi-town renewables project, a 4 MW solar array, which provides climate benefits equivalent to more than 4,000 acres of forests.
Without pooling the electricity demand with other buyers, smaller cities would not be able to access utility-scale projects on their own, making it difficult to reduce their carbon emissions efficiently.
Creating Knowledge-Sharing Opportunities
By joining together, cities can not only aggregate their buying power but also pool their knowledge to streamline procurement processes. The shared experience among participants can generate positive network effects, including increased mentorship, increased credibility, and support for inexperienced buyers.
For example, the City of Nashville partnered with Vanderbilt University last year to purchase electricity from a 125 MW solar project as part of the Tennessee Valley Authority’s Green Invest program. This public-private partnership allowed the city to leverage the expertise of the University’s Large-Scale Renewable Energy Study Advisory Committee to identify the best risk mitigation strategy.
According to Susan R. Wente, interim chancellor of Vanderbilt University, “We want this partnership to serve as a model of collaboration that other organizations within our region and beyond can replicate to make long-term, lasting changes to protect our shared environment.” In fact, the connections formed within the aggregation group have garnered national media attention and are sending a powerful signal to utilities, policymakers, and developers that local governments are serious about rapidly decarbonizing the electricity system.
In addition, a group of buyers can also share external lawyers, accountants, or consultants. For instance, 15 Pennsylvania municipalities and public entities, which also participated in the Renewables Accelerator’s Large-Scale Renewables Aggregation Cohort, have teamed up to investigate the viability of investing in a joint solar deal. The 15 entities issued a joint RFP for energy consultants in May 2021 to share external advisory services.
Unlocking More Cost Savings
Throughout the collaborative process, aggregated deals can produce various cost savings because they enable cities to achieve greater economies of scale by combining the renewable energy demands of multiple buyers.
For example, a National Renewable Energy Laboratory analysis estimates that procuring 100 MW of solar instead of 5 MW can reduce development costs by 24 percent. This can lead to cost savings in the form of lower power purchase agreement prices for all buyers, regardless of size.
In another case, the company Enel X, which is working with the BRCPC on a joint purchasing strategy, found that renewable energy projects typically must be over 20 MW in size to be economical. The company discovered that aggregation is one way for smaller buyers to participate in large projects.
In Florida, 12 cities joined together to form the Florida Municipal Solar Project. They are developing 372.5 MW of zero-emissions energy capacity, enough to power 75,000 Florida homes. According to Jacob Williams, CEO and general manager of the Florida Municipal Power Agency, “By working together, our cities are able to provide clean power to their communities in a cost-effective way.” Clint Bullock, Orlando Utilities Commission general manager and CEO, explained, “We can leverage the economies of scale to bring the price of solar down to a point where a dozen municipal utilities can afford to sign on and I believe this is something people around the country will take notice of.”
Better Together
As more cities set goals to transition to renewables, aggregation is democratizing clean energy access by enabling participants, especially smaller buyers, to collectively develop significantly larger renewables projects than any one buyer would be able to access individually. The partnerships can create positive network effects through knowledge sharing and inspire other organizations within the region to replicate the collaboration model. By unlocking more cost savings, aggregated deals provide a lower-cost mechanism for cities to achieve climate goals efficiently.
The new IPCC report underscores the urgency of decarbonizing the electricity system and reducing GHGs. To play their part, cities need to increase the pace and scale of renewable energy procurement. Although aggregation is still a relatively underutilized procurement method, this approach is crucial to help them do that.
Procuring Large-Scale Renewables through Aggregation: A Guide for Local Governments helps walk local governments through the aggregated procurement process step-by-step and links to other key tools and resources relevant to each stage.
Cities must act now to curb greenhouse gas emissions. The best path forward involves engaging all actors and ensuring a more promising economic structure for a wide array of purchasers. In the battle against climate change, it is better to aggregate than to go it alone.
Article courtesy of RMI.
Environment
Fintechs like Block and PayPal are battling like never before to be your all-in-one online bank
Jack Dorsey, co-founder of Twitter Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, U.S., on Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
Jack Dorsey’s Block got started as Square, offering small businesses a simple way to accept payments via smartphone. Affirm began as an online lender, giving consumers more affordable credit options for retail purchases. PayPal upended finance more than 25 years ago by letting businesses accept online payments.
The three fintechs, which were each launched by tech luminaries in different eras of Silicon Valley history, are increasingly converging as they seek to become virtual all-in-one banks. In their latest earnings reports this month, their lofty ambitions became more clear than ever.
Block was the last of the three to report, and the high-level numbers were troubling. Earnings and revenue missed estimates, sending the stock down 18%, its steepest drop in five years. But to hear Dorsey discuss the results, Block is successfully implementing a strategy of offering consumers the ability to pay businesses by smartphone, send money to friends through Cash App, and access credit and debit services while also getting more ways to invest in bitcoin.
“In 2024, we expanded Square from a payments tool into a full commerce platform, enhanced Cash App’s financial services offerings, and restructured our organization,” Dorsey said on Block’s earnings call on Thursday after the bell.
Block and an expanding roster of fintech rivals have all come to see that their moats aren’t strong enough in their core markets to keep the competition away, and that the path to growth is through a diverse set of financial services traditionally offered by banks. They’re playing to an audience of digital-first consumers who either didn’t grow up using a brick-and-mortar bank or realized at an early age that they had no need to ever set foot in a physical branch, or to meet with a loan officer or customer service rep.
“Longer term, we see a significant opportunity to grow actives, particularly among that digital-native audience like Millennial and Gen Z,” Block CFO Amrita Ahuja said on the earnings call.
As part of its expansion, Block has encroached on Affirm’s turf, with an increasing focus on buy now, pay later (BNPL) offerings that it picked up in its $29 billion purchase of Afterpay, which closed in early 2022. Block’s market share in BNPL increased by one point to 19%, while Affirm held its position at 17%, according to a recent report from Mizuho. Both companies are outperforming Klarna in BNPL, the report said.
Block’s BNPL play is now tied into Cash App, with an integration activated this week that gives users another way to make purchases through a single app. With Cash App monthly active users stagnating at 57 million for the last few quarters, the company is focused on engagement rather than rapid user acquisition.
“We think that there is significant opportunity for growth longer term, but there are some deliberate decisions we’ve made as part of our banker-based strategy in the near term” that have kept user numbers from increasing, Ahuja said. “This is a part of our continuous enhancements to drive healthy customer engagement as we bank our base.”
Compared to Block, Wall Street had a very different reaction to Affirm’s earnings earlier this month, pushing the stock up 22% after the company’s results sailed past estimates.
Affirm founder and CEO Max Levchin, who was previously a co-founder of PayPal, built his company with the promise of giving consumers lower-cost and easy-to-tap intstallment loans for purchases like electronics, jewelry and travel.
The BNPL battlefront
In its latest earnings report, Affirm posted a 35% increase in gross merchandise volume to $10.1 billion. Revenue surged 47% to $770 million, while its active consumer base grew 23% to 21 million.
Beyond BNPL, Levchin has pushed Affirm into debit with the Affirm Card, which now has 1.7 million active users, up 136% year-over-year.
“Anything we can do to personalize the experience, to give people a chance to feel like this is the best alternative they have to their debit or their credit card is what we’re busy with,” Levchin said on the earnings call. He said the goal is to get the card to 20 million users, spending on average $7,500 per year.
Affirm is also partnering with FIS to bring its debit card functionality to traditional banks.
Levchin left PayPal in 2002, after the company was acquired by eBay. It was a decade before he’d start working to help popularize the modern day BNPL market.
Now his former employer, which spun back out from eBay in 2015, is in on the BNPL game.
Under the leadership of CEO Alex Chriss, who took over the company in September 2023, PayPal is in the midst of a turnaround that involves working to better monetize products like Braintree and Venmo and joining the world of physical commerce with a debit card inside its mobile app.
Investors responded positively in 2024, pushing the stock up almost 40% after a brutal few years. But the stock dropped 13% after its earnings report, even as profit and revenue were better than expected. PayPal’s total payment volume for the quarter hit $437.8 billion, slightly below projections, while transaction margins rose to 47% from 45.8% — a sign of improving profitability.
One of Chriss’ big pushes is to get more out of Venmo, which has long been a popular way for friends to pay each other but hasn’t been a big hit with businesses. Venmo’s total payment volume in the quarter rose 10% year-over-year, with increased adoption at DoorDash, Starbucks, and Ticketmaster.
PayPal is also promoting Venmo’s debit card and “Pay With Venmo,” which saw 30% and 20% monthly active growth in 2024, respectively. The company is introducing new services to improve merchant retention, including its Fastlane one-click checkout feature, designed to compete with Apple Pay and Shopify’s Shop Pay.
Last year, the company launched PayPal Everywhere, a cashback-driven initiative designed to boost engagement within its mobile app. Chriss said on the earnings call that it’s “driving significant increases in debit card adoption and opening new categories of spend.”
As with virtually all financial services products, the new offerings from Block, Affirm and PayPal are designed to produce growth but not at the expense of profit. Banks operate at low margins, in large part because there’s so much competition for lower-priced loans and better cash-back options. There’s also all the costs associated with underwriting and compliance.
That’s the environment in which fintechs have to operate, though without the costs of running a network of physical branches.
Levchin talks about helping customers spend less, not more. And Block acknowledges the need for hefty investments to reach the company’s desired outcome.
“This is a part of our continuous enhancements to drive healthy customer engagement as we bank our base,” Ahuja said. “We’ve made investments in critical areas like compliance, support and risk. And as we’ve done that, we’ve progressed more of our actives through our identity verification process, which in turn, unlocks greater access to those actives to our full suite of financial tools.”
The Trump administration is shutting down EV chargers at all federal government buildings and is also expected to sell off the General Services Administration‘s (GSA) newly bought EVs.
GSA, which manages all federal government-owned buildings, also operates the federal buildings’ EV chargers. Federally owned EVs and federal employee-owned personal EVs are charged on those 8,000 charging ports.
The Verge reports it’s been told by a source that plans will be officially announced internally next week, and it’s seen an email that GSA has already sent to regional offices about the plans:
“As GSA has worked to align with the current administration, we have received direction that all GSA-owned charging stations are not mission-critical.”
The GSA is working on the timing of canceling current network contracts that keep the EV chargers operational. Once those contracts are canceled, the stations will be taken out of service and “turned off at the breaker,” the email reads. Other chargers will be turned off starting next week.
“Neither Government Owned Vehicles nor Privately Owned Vehicles will be able to charge at these charging stations once they’re out of service.”
Colorado Public Radio first reported yesterday that it had seen the email that was sent to the Denver Federal Center, which has 22 EV charging stations at 11 locations.
The Trump/Elon Musk administration has taken the GSA’s fleet electrification webpage offline entirely. (An archived version is available here.)
The Verge‘s source also said that the GSA will offload the EVs it bought during the Biden administration, although it’s unknown whether they’ll be sold or stored.
Read more: Trump just canceled the federal NEVI EV charger program
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
Ben Zhou, chief executive officer of ByBit, during the Token2049 conference in Singapore, on Thursday, Sept. 14, 2023.
Joseph Nair | Bloomberg | Getty Images
Bybit, a major cryptocurrency exchange, has been hacked to the tune of $1.5 billion in digital assets, in what’s estimated to be the largest crypto heist in history.
The attack compromised Bybit’s cold wallet, an offline storage system designed for security. The stolen funds, primarily in ether, were quickly transferred across multiple wallets and liquidated through various platforms.
“Please rest assured that all other cold wallets are secure,” Ben Zhou, CEO of Bybit, posted on X. “All withdrawals are NORMAL.”
Blockchain analysis firms, including Elliptic and Arkham Intelligence, traced the stolen crypto as it was moved to various accounts and swiftly offloaded. The hack far surpasses previous thefts in the sector, according to Elliptic. That includes the $611 million stolen from Poly Network in 2021 and the $570 million drained from Binance in 2022.
Analysts at Elliptic later linked the attack to North Korea’s Lazarus Group, a state-sponsored hacking collective notorious for siphoning billions of dollars from the cryptocurrency industry. The group is known for exploiting security vulnerabilities to finance North Korea’s regime, often using sophisticated laundering methods to obscure the flow of funds.
“We’ve labelled the thief’s addresses in our software, to help to prevent these funds from being cashed-out through any other exchanges,” said Tom Robinson, chief scientist at Elliptic, in an email.
The breach immediately triggered a rush of withdrawals from Bybit as users feared potential insolvency. Zhou said outflows had stabilized. To reassure customers, he announced that Bybit had secured a bridge loan from undisclosed partners to cover any unrecoverable losses and maintain operations.
The Lazarus Group’s history of targeting crypto platforms dates back to 2017, when the group infiltrated four South Korean exchanges and stole $200 million worth of bitcoin. As law enforcement agencies and crypto tracking firms work to trace the stolen assets, industry experts warn that large-scale thefts remain a fundamental risk.
“The more difficult we make it to benefit from crimes such as this, the less frequently they will take place,” Elliptic’s Robinson wrote in a post.
WATCH: Crypto stocks plunge
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports11 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway