The energy transition has reached companies beyond large energy consumers in Brazil, expanding the various options for purchasing renewable energy to supply the operations of companies of different sizes and energy consumption.

All these companies are expected to boost renewable energy contracts in Brazil, including hospital management companies, supermarket chains, data centers, telephone companies, civil construction, commerce, shopping centers, manufacturing, and the food and beverage industries—among many others that drive the Brazilian economy.

The reasons are multiple, for example: savings on energy costs, flexibility and predictability in agreements, competitiveness in a global market, and customers’ increasingly demanding standards regarding the sustainability and greenhouse gas emissions footprint across their value chains.

“It won’t just be a factor of competitiveness, but rather a factor of survival and market endurance for these companies. Nowadays, several countries, or even blocs like the European Union, impose increasingly stringent requirements on suppliers and imported products. Having the assurance that renewable energy is being sourced directly from the generator provides a significant level of security,” explains Lucas Salgado, Director of Strategy and Commercial Planning at Atlas Renewable Energy.

With almost 4.5 gigawatts (GW) installed and operational in Brazil, Atlas Renewable Energy has extensive experience serving electro-intensive customers, whose energy consumption accounts for approximately 45% of operating costs.

Salgado asserts that this experience has given Atlas Renewable Energy the expertise to develop renewable energy contracting options for the medium consumption segment, where energy demand is lower but still constitutes a significant expense for the companies.

A Solution for Every Business

Atlas collaborates closely with clients to analyze leading market practices and tailor them to fit the unique realities of their companies and sectors.

“At times, the contract duration may be adjusted, ranging from 7 to 15 years instead of the standard 20 years. Instead of a uniform consumption pattern, we offer a customized consumption curve, providing enhanced operational flexibility to the client. In cases where clients operate across diverse submarkets, each with varying consumption profiles and volumes, we optimize our services to meet each customer’s needs, thereby minimizing market exposure,” explains Salgado.

Below, we’ve summarized everything you need to know to make an informed decision about purchasing renewable energy for your business.

• • What constitutes the middle market in Brazil?
  • Why opt for renewable energy sources?
  • What are the available contracting options?
  • How do you select the best option?
  • Is it possible to issue carbon credits?
  • What factors should be considered when selecting an energy supplier?
  • I’m interested in signing a renewable energy contract. What are the initial steps?

What is the middle market? 

When we talk about intermediate energy-consuming companies, we refer to large companies that consume between 1 and 20 MW/average and monthly electricity expenses that reach R$100-150 thousand.

These are organizations that, while not among the top 50 energy consumers, have a significant energy bill, representing more than 40% of their operating costs; hence, they are seeking efficiency and decarbonization.

Why hire renewable energy?

One of the reasons is financial. “Today, having a long-term power purchase agreement (PPA) has become an economically viable option for companies of different sizes. Including those who are transitioning to the free market”, says Atlas’ Commercial Director.

According to Salgado, a PPA can obtain a 50% discount on the energy price in the self-consumption model, in addition to the savings provided by solar and wind sources.

Furthermore, contracting renewable energy ensures cost stability and predictability, strengthens companies’ international competitiveness, and contributes to decarbonization and survival factors in a market increasingly aligned with ESG objectives. 

“These companies can reduce carbon emissions and meet their internal and sectoral goals. In the case of Atlas, we normally sell energy from the new parks we are building, so our customers can prove that they are bringing additionality through certifications such as carbon credits and RECs”, highlights Salgado.

What are the contracting options?

Power Purchase Agreement (PPA): It’s a long-term energy purchase contract that provides stability and cost reduction. It defines terms, volume, and some commercial criteria, such as flexibility, that is, operational flexibilities can be generated seasonally, depending on demand and the individuality of the company’s operation.

Self-consumption by equivalence: It’s also a PPA, but with the difference that the client becomes a partner in the project, obtaining financial and cost benefits. In addition to being an energy consumer, they also become an investor. Cost savings with sectorial charges can reach up to 90%, representing up to 30% of the energy cost.

Self-production by consortium and leasing: Companies come together to lease a renewable generation plant, sharing costs and benefits. It’s a kind of energy club, where monthly payments equate to the cost of the energy the client will receive.

What about the environmental attributes that Atlas offers?

Atlas projects meet additionality criteria and include social and environmental impact programs within their construction and operational processes. Additionally, being renewable energy undertakings, they meet the requirements for commercializing emission compensation products, such as:

Renewable Energy Certificates (RECs): This model has become well-known in Brazil and is in high demand. Each MWh of renewable energy generates a REC, which the company can use to offset its consumption in its inventories.

Carbon credits: Atlas’s projects can be certified under international methodologies such as the Global Carbon Council (GCC) to generate carbon credits in the voluntary market.

How to choose the best option?

The choice between these options depends on the specific needs of each company.

A PPA offers stability, while self-production is ideal for those seeking additional savings by reducing costs, either through participation in projects or consortia. Consortia are advantageous for clients with diverse consumption points who do not wish to have equity participation in the project. Products like RECs and carbon credits are ideal for emissions offsetting.

That’s why Atlas works with the client to find the model that provides the most savings and security concerning energy costs and based on the operational and strategic needs of the company.

“Equating works well for clients with individual energy consumption above 3 MW. Below 3 MW, leasing makes more sense because, in addition to self-production, the client can have other benefits. For example, retail networks may have reduced costs with charges, distribution, and other cost optimizations. That is, it is also an expense optimization advantage, in addition to emission reduction and greater cost predictability,” explains Salgado.

Can I issue carbon credits?

Yes. In addition to having a renewable energy PPA, the client obtains market certificates used to demonstrate that they are reducing Scope 2 emissions (energy consumption) in their inventory.

RECs can be used in inventories with the GHG Protocol methodology and can be acquired by the rest of the value chain.

In the case of Atlas, the RECs have an additional certification: they are the Brazil RECs, which prove that the projects that generate clean energy are linked to the UN Sustainable Development Goals (SDGs).

Regarding the voluntary carbon market, Atlas certifies projects based on international methodologies such as the Global Carbon Council (GCC) to generate credits.

“With this carbon credits, the company can offset its emissions from all Scopes 1, 2, and 3,” says Salgado.

What should I consider when choosing an energy supplier?

Protect yourself from risks: whether market or credit-related. A piece of advice from Lucas Salgado is to verify that the generator has the physical assets to deliver the contracted energy and what the supply guarantees are.

Understanding your counterparty is key: seek out companies with a proven track record in the generation market and the financial capacity to fulfill commitments. Scrutinize their balance sheets and delve deep into their identity and how they can offer that price.

Understanding your counterparty is key: seek out companies with a proven track record in the generation market and the financial capacity to fulfill commitments. Scrutinize their balance sheets and delve deep into their identity and how they can offer that price.

I want to sign a renewable energy contract. What is the first step?

To initiate this process, the first step is to get in touch with specialists, such as Atlas, who offer support from feasibility analysis to contract preparation. To facilitate this contact, communication channels like the website atlasrenewableenergy.com, the email commercial@atlasren.com, and social media are available.

Lucas Salgado invites you to have a coffee. “Atlas’s doors are open to receive and converse with all those interested in participating in the energy transition towards a more sustainable world.”

This article was created in partnership with Castleberry Media.. At Castleberry Media, we are dedicated to environmental sustainability. By purchasing Carbon Certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold..