A CORPORATE PURCHASER’S GUIDE TO RISK MITIGATION

The US corporate renewable energy market has expanded rapidly, with over 6 GW of announcements in 2018 alone, yet risk mitigation tools have not kept pace. The document identifies five key risks unfamiliar to corporate buyers—price, basis, shape, volume, and operational risk—and proposes a "many-sizes-for-all" approach. It outlines eight specific mitigation solutions, including five within the virtual power purchase agreement (VPPA) construct (hub-settled VPPAs, floors and collars, proxy generation, volume firming agreements, and fixed volume swaps) and three outside it (long-term REC agreements, project tranches, and contract tranches).

• Corporate procurement has become a significant part of the US electricity system, accounting for more than 12% of all utility-scale wind and solar installed in the country as of the report's date.
• The US corporate renewables market experienced substantial growth in 2018, with over 6 GW of renewable energy announcements, representing a 70% increase in transaction volume compared to 2017.
• The buyer market is diversifying beyond the IT sector; in 2018, more than 50% of procured capacity came from other industries, including healthcare, manufacturing, retail, and telecommunications.
• Risk mitigation solutions have failed to evolve at the same rate as market expansion, resulting in a "one-size-fits-all" approach centered on the Power Purchase Agreement (PPA), which may not align with the varying risk appetites of a diversifying buyer base.
• Corporate buyers face five primary risks that are often unfamiliar to them and can lead to significant financial losses: price, basis, shape, volume, and operational risk.
• The report identifies eight specific risk mitigation strategies: five within the VPPA construct (hub-settled VPPAs, floors and collars, proxy generation, volume firming agreements, and fixed volume swaps) and three outside it (long-term REC agreements, project tranches, and contract tranches).

APA

Kansal, R., & Singer, T. (2019). A CORPORATE PURCHASER’S GUIDE TO RISK MITIGATION. RMI. https://rmi.org/app/uploads/2018/12/rmi-brc-risk-mitigation-guide-executive-summary.pdf

Chicago

Kansal, Rachit, and Tim Singer. A CORPORATE PURCHASER’S GUIDE TO RISK MITIGATION. RMI, 2019. https://rmi.org/app/uploads/2018/12/rmi-brc-risk-mitigation-guide-executive-summary.pdf.

Wikipedia

{{cite report |last1=Kansal |first1=Rachit |last2=Singer |first2=Tim |title=A CORPORATE PURCHASER’S GUIDE TO RISK MITIGATION |publisher=RMI |date=January 2019 |url=https://rmi.org/app/uploads/2018/12/rmi-brc-risk-mitigation-guide-executive-summary.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kansal2019corporate, author = {Kansal, Rachit and Singer, Tim}, title = {{A CORPORATE PURCHASER’S GUIDE TO RISK MITIGATION}}, institution = {RMI}, year = {2019}, month = jan, url = {https://rmi.org/app/uploads/2018/12/rmi-brc-risk-mitigation-guide-executive-summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }