Five Customers, Five Questions: REI Co-op
Our fifth and final interview is with Jay Creech, renewable energy manager at REI Co-op. Discussions about greenhouse gas accounting all too often overlook the tremendous role of energy customers in driving grid decarbonization investments and the efforts of the people who make that clean energy procurement happen. The Clean Energy Buyers Institute has interviewed five energy professionals and asked five questions, to reveal insights and real stories about their hard work to advance the carbon-free energy transition. Customer perspectives are important for broader industry dialogues, particularly as World Resources Institute and the World Business Council for Sustainable Development update the Greenhouse Gas Protocol.
Jay Creech, REI Co-op
Renewable Energy Manager
1. Could you share an example or two illustrating how and why carbon-free electricity (CFE) procurement is important for your company and for decarbonizing the grid?
CFE procurement is important to REI because we recognize that the electricity used to power our stores, distribution centers, and offices can have a big emissions impact. We also know that grid decarbonization will require both REI as an individual buyer to procure impactful carbon-free energy, as well as REI as part of a broader movement to get more small- and medium-sized buyers (in addition to some of the larger and more experienced buyers) to continue to add carbon-free electricity to the grid.
To help maximize our impact, REI believes that carbon-free energy should be aligned around two key principles: more local and more accessible. For example, we recently announced a renewable energy purchase in Texas that will allow us to match renewable energy certificates (RECs) to our Houston and Dallas area stores. We chose to make this transaction one that will not only add solar and help decarbonize the Texas grid, but also a transaction that is done at a volume and term length that small- and medium-sized buyers can replicate and further add renewables onto the grid beyond REI’s initial purchase.
2. How does the voluntary market system affect how you assess different CFE procurement options and ultimately make decisions?
The voluntary market system provides a good platform for REI to identify and evaluate CFE procurement. We know that there is space for creativity and collaboration to transact high-impact renewable energy, and that the voluntary market system is complementary to the compliance market, where we might have opportunities to participate in a regulated utility green tariff program, like we do with Puget Sound Energy’s Green Direct program. Overall, we think of our broader energy portfolio as a chance to have a diverse and complementary set of CFE procurements, with a diversity in geography, project size, term length, pricing, and impact.
3. How do energy attribute certificates (EACs) and market-based accounting affect your decision making, and why?
We’ve been 100% renewable in our U.S. operations for 10 years, so the annual matching of RECs to megawatt hours of consumption has been an important part of our renewable energy journey for many years. The acquisition of RECs and following the Greenhouse Gas Protocol guidance for Scope 2 accounting is foundational to our renewable energy strategy, but we also know that there is more to an energy strategy than that. Our broader energy strategy focuses on building on market-based accounting to drive toward outcomes that we think are essential to impactful EACs and accelerating the clean energy transition – how do we make renewable energy more local and more accessible.
4. What advice would you give to companies that are just starting their efforts to procure carbon-free electricity?
There are two things that stand out: internal stakeholders and external networks. In my first year at the co-op, I’ve focused on building out the internal team and establishing the right list of stakeholders. It’s hard to imagine any CFE procurement process taking place without input from legal, accounting, tax, finance, procurement, and sustainability teams. It will take time to grow that internal expertise and get everyone comfortable with new vocabulary, new concepts, and new transaction types.
The other thing that comes to mind is building your outside network. So much of what I’ve learned in the carbon-free electricity space has been learned through discussions, referrals, and general relationship building. Having a strong network of trusted contacts helps me identify new opportunities, talk through concepts or challenges, and generally share inspiration and stay motivated to find the next transaction.
5. If you could change one thing in today’s CFE markets to help your company go even further in decarbonizing the grid, what would it be?
Increasing accessibility to impactful carbon-free electricity – there are real costs and challenges associated with identifying and transacting impactful carbon-free energy. Some of the biggest barriers that come to mind are high megawatt hour (MWH) volume, long-term length, and legal and financial complexity. Not every company, including REI, can transact in multiple (or even one) 100,000+ MWH/year virtual power purchase agreement (VPPA)-style agreement that requires dedicated outside counsel, risk management, and financial tracking as monthly settlement prices are determined.
However, that doesn’t mean that there aren’t interested companies with resources and teams that want to procure impactful renewable energy. So much of the REI team’s focus is on how to increase accessibility, both as a reflection of the challenges we’ve faced transacting in this space, as well as the broader reflection that we’re a member-owned cooperative, and that we want to live by our words that “we go further, together” and want to support as many buyers as possible to enter this space.