Description
Aggregated Renewable Energy (RE) Procurement is a strategy where two or more entities, such as local governments, corporations, or public institutions, join forces to purchase renewable energy. By pooling their energy demand, these buyers work together to define the clean energy project they want to support and negotiate a contract with a developer, typically through Power Purchase Agreements (PPAs) or contracts with utilities. Aggregated procurement is commonly used for community-scale or larger renewable energy installations and helps drive down costs, attract investments and increase access to clean energy, particularly in emerging economies with limited access to competitive financial markets.
Benefits
By pooling demand, aggregated RE procurement allows buyers to leverage economies of scale, resulting in lower costs per megawatt (MW) of energy. Administrative and consulting costs, such as hiring energy experts, are shared across all members, making the process more cost-efficient. Additionally, aggregated procurement helps smaller entities, which may lack the financial strength to execute large projects individually, to access renewable energy opportunities alongside larger players. By bringing multiple stakeholders together, aggregated procurement also sends a strong market signal, stimulating developer interest and growing the pipeline of clean energy projects. In countries with underdeveloped financial markets, this approach facilitates investment. Beyond cost benefits, aggregation also fosters knowledge sharing among participants, enhancing their ability to navigate regulatory complexities and scale up clean energy efforts.
Case Study
Aggregated procurement model structured by the Clean Energy Investment Accelerator
The Clean Energy Investment Accelerator (CEIA) is a public-private partnership designed to address barriers to scaling clean energy deployment in emerging markets. CEIA focused on markets with high commercial and industrial energy demand, engaging stakeholders in countries such as Vietnam, the Philippines, Indonesia, Colombia, and Mexico. By working with corporate buyers, governments, and utilities, the initiative aimed to unlock significant clean energy investment through aggregated procurement models and financial tools. CEIA helped local businesses and multinational companies signal their demand for renewable energy, which stimulated the clean energy project pipeline and strengthened the policy frameworks needed to support long-term sustainable growth.
CEIA's impact was broad, with over USD 50 million by 2022 in clean energy investments mobilized and more than 100 MW of clean energy projects deployed to date. Through technical support and capacity building, CEIA displaced carbon-intensive power sources, opening pathways for gigawatt-scale replication. Over 600 companies have participated in CEIA’s in-country coalitions, helping to shape policy and improve the clean energy enabling environment. In 2021, CEIA facilitated Mexico’s first aggregated renewable procurement for a major multinational retailer, saving 30% in energy costs.
Additional Sources