The thermal solutions company Combitherm faced growing customer demands to become carbon neutral. Upon discovering that purchasing 'green electricity certificates' had little impact on their electricity's carbon footprint, Combitherm went searching for novel electricity solutions with real impact - and found Reel.
Combitherm is one of Europe's leading companies for thermal solutions. They offer temperature-stabilizing products to a range of customers, including some of Denmark's largest companies. As the pressures for corporate sustainability grow, many of Combitherm's larger customers are demanding that their suppliers become carbon neutral by 2030.
For several years Combitherm has purchased 'green energy certificates' to ensure their electricity consumption meets these demands. But this solution has its limitations. While these certificates purport to support the production of renewable energy, recent research has shown that purchasing these certificates has little impact on the share of renewables in a given area. This means that there is no guarantee that a company purchasing these certificates is reducing its carbon footprint.
Given the revealed pitfalls of ‘green energy certificates,’ Combitherm has had to search for novel electricity solutions that can fulfil their largest customers’ demands.
To meet their customers’ growing demands for carbon neutrality, Combitherm swapped ineffective ‘green energy certificates’ for a Power Purchase Agreement (PPA) from Reel. A PPA is an electricity contract where a company (or several companies pooled together) buys electricity from a new renewable energy park at a fixed price over 5, 7 or 10 years.
Combitherm’s PPA with Reel means that starting in 2024, Combitherm will purchase renewable energy from a newly built solar park in Fårvang. The solar park will be built as a direct consequence of Combitherm and six other companies' PPAs. This is because PPAs provide crucial revenue security that renewable energy developers need to secure financing for new projects. Together with the other six companies, Combitherm is adding more renewable energy to the Danish electricity grid.
"We continually want to develop our business, and despite our relatively small size compared to the large companies we work with, we have a responsibility to reduce our carbon emissions. Even as a smaller player, it is our firm belief that we have a responsibility to deal with the climate crisis. Just like the big companies have. Everyone must contribute to the best of their ability. We are acting on this belief in collaboration with Reel."
— Torben Hallstrup, Combitherm COO
Prior to Reel, a PPA would have been inaccessible to companies the size of Combitherm. PPAs have typically been the exclusive domain of larger companies, such as Novo Nordisk and Carlsberg due to the substantial size of their energy consumption.
Reel's PPA solution is the first to be offered to all businesses, regardless of their size. Reel does this by pooling companies together, so their combined energy consumption is large enough to help secure the financing for, and purchase the energy from, a new renewable energy park. In addition, Reel tailors each PPA to each company’s unique needs, including Combitherm:
"We have probably not been the easiest customer to satisfy, but Reel has on several occasions shown the ability to go the extra mile to set up a partnership that will be favorable for both parties. Reel is a professional partner with great insight into how our business can gain a competitive advantage from a PPA and make a real difference for the climate."
— Torben Hallstrup, Combitherm COO
Combitherm's headquarters are in Them, only 30 kilometres from the newly built solar farm. For Torben Hallstrup it is immensely valuable that the solution is local. It aligns perfectly with the company's values and commitment to the local community.
"It underscores our deep connection and commitment to our community. It is a reminder that sustainability and local solutions go hand in hand. We believe that this connection is vital for our future growth." says Torben Hallstrup.
In addition to reducing their emissions, Combitherm’s PPA also offers the security of knowing their future electricity prices. "Our goal is not only to find the cheapest solution, but to find a solution fit for the future. We value knowing our price in advance. Especially when accompanied by the creation of new renewable energy." says Torben Hallstrup.
By working with Reel, Combitherm has achieved:
- Compliance: Combitherm is now one step ahead of their customers' increasing requirements for sustainability.
- 100% additionality: Combitherm's agreement ensures 100% additionality for their electricity. This means their consumption leads to a corresponding increase in renewable energy on the Danish electricity grid.
- Community minded: With their PPA, Combitherm achieves their vision of locally embedded sustainability practices by helping to bring new renewable energy to their community.
- Strengthened competitiveness: Combitherm improves their competitive advantage by demonstrating environmental responsibility and taking an important step towards carbon neutrality.
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