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How to Become a Renewable Energy Entrepreneur

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

business plan for renewable energy

From photovoltaic solar panels to kinetic energy adapters that generate electricity from pedaling stationary bicycles, entrepreneurs are taking advantage of the green revolution by finding and marketing renewable energy solutions.

Since we use energy for almost everything, the recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals.

But is this just a fad? Or are there viable business opportunities for the long term?

Key Takeaways

  • Not every entrepreneur is an investor. Consider opportunities for green services.
  • Focus on the industries you're most familiar with.
  • Consider government financing sources.

Renewables Are Here to Stay

As the global population rises, the reality of finite resources is sinking in. Our energy requirements cannot depend on fossil fuels forever. Advances in technology have allowed us to tap into reserves that were inaccessible in the past, but that only delays the inevitable.

These concerns, along with the negative impacts of burning fossil fuels, have created an environmentally and socially conscious mindset among different sets of economic actors, including consumers, investors, corporations, and governments. Companies and investors looking for profits have taken advantage of consumer interest in cleaner energy alternatives and government-incentivized green business initiatives.

With all these factors driving the shift towards renewable energy, now is the time to start looking for opportunities to help solve the world’s energy problems and, perhaps, make money doing it.

Recognizing the Opportunity

There are innumerable opportunities for implementing an innovative renewable energy solution. However, the best place to start looking is in your own area of expertise. Think about the industries you’ve worked in and how renewable energy could benefit them.

Also, remember that becoming a renewable energy entrepreneur doesn’t mean you have to build your own wind farm or hydroelectric dam. Renewable energy is about more than just electricity generation. It is also about storage, conservation, and distribution.

Product or Service?

You also don’t need to invent a new product or technology. You can get involved in installation, repair and maintenance, or consulting.

Think broadly, and focus on your areas of expertise.

Finally, brainstorm with friends, family, and colleagues about things that people want or need.

Some people build a business around an idea and then try to sell that idea rather than building the business around something people already want to buy. Green consumers are no different.

Green Consumer Challenge

Despite all the hype about environmental sustainability, the evidence suggests that green consumers look for the same things most consumers want: individual benefit at a low cost.

Although the environmentally conscientious market, labeled LOHAS (Lifestyles of Health and Sustainability), is growing, the green market is still relatively niche. Marketing to everyone else means educating consumers on the advantages of renewable energy, including showing them how it can add value to their lives at a lower cost.

Beyond the LOHAS

Consumers are not the only group that one needs to consider when looking for the right opportunity. Think about how the product or service will affect or be affected by others, such as suppliers, the government, the competition, and financing organizations like banks.

All of these actors could have an impact on the success of your business, so it is helpful to think about the role they will play while you’re in the development stage .

Developing a Business Plan

In devising a business plan , it is helpful to determine if there are other businesses in other regions of the world that are already offering a similar product or service. Look at the fundamentals of those businesses and use them as models for developing your own plan.

The percentage of entrepreneurs who invest some personal savings in the early stages.

Regardless of how extensive you decide to make your business plan, you definitely need to do some initial market research and summarize a business concept. You will want to analyze costs, make revenue projections, and set out some key milestones for developing and launching your business.

Talk to Potential Customers

Remember to conduct interviews with potential customers in order to get a sense of the demand for your product or service and how best to introduce it to the market.

Also, contact suppliers to get price quotes on materials and services that you will need to manufacture your product or deliver your service.

Once you’ve completed your business plan, it is time to figure out how you are going to finance your business.

Financing Your Business

Every business succeeds or fails on the basis of its ability to sustain itself financially, but it could take some time before revenues are large enough to cover costs.

Although there are a number of financing options for new businesses and startups, the research shows that almost 90% of entrepreneurs invest some personal savings at the early stages of their business. And more than 74% said that personal savings were the primary source of initial financing. Using your own savings may also show other potential investors that you are serious about the future of your new venture.

The Options for Financing

Some entrepreneurs obtain financing from banks, venture capital , angel investors, or the government. The first two options may be harder to obtain in the early stages as they tend to demand to see an existing company with strong growth potential before forking over the money. Angel investors, those who offer new and fledgling businesses capital in exchange for equity, are also possible funding options, but tend to offer smaller amounts.

While it can take some time to receive approval and not all businesses are eligible, government funding could be a good way to go given the numerous incentives for cleaner, more sustainable technologies and services.

Visit the U.S. Department of Energy site for current energy efficiency and renewable energy funding opportunities and the National Renewable Energy Laboratory (NREL) site for renewable energy project financing information.

The Bottom Line

Once you’ve had an idea, made a plan, and figured out how to finance your business, you’re on your way to becoming a renewable energy entrepreneur.

But the work has just begun. Now you’re going to have to convince consumers to spend money on your product or service. This is not easy, but it can be rewarding, especially considering that you're sustaining not only your livelihood but that of people all over the world for generations to come. Renewable energy entrepreneurs may just save the planet yet.

RetailMeNot. " 4 in 5 Consumers Think Eco-Friendly Products Cost More 'Green .'"

Eric Koester. " Green Entrepreneur Handbook: The Guide to Building and Growing a Green Business ," Page 88. CRC Press, 2016.

business plan for renewable energy

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Energy Conservation Business Plan

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Green Power Consultancy

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Green Power Consultancy is a start-up organization in Burlington, VT that offers designs and advice to architects and consumers regarding environmentally sensitive buildings as well as energy consumption recommendations. Green Power has identified three keys to its success. The first is the need to only offer solutions which are based on market demand. The second is to ensure that all of its offerings are based on economic justifications; the solution should make sense beyond the environmental considerations because it has long-term economic value.

Green Power will be targeting architects and individual consumers. Green Power will work closely with several architects providing them the ability to offer environmental solutions to their customers. This group is growing at 7% and there are 23 potential customers in the area. The second customer group is individual consumers; an environmentally conscious group that have sought out a service provider to help them implement their personal ethics into the design of their new or existing structure.

Green Power is an environmental energy consultancy that offers a wide range of services: advice regarding passive heating, grey water usage recommendations, renewable energy considerations and employee transportation options.

Green Power will be led by the seasoned management team of Dan and Sue Lang. Dan received a degree in environmental studies, business, and a Masters in architecture. Dan has several years of work experience within the industry. The second part of the team is Sue Lang. Sue has an MBA and work experience with the Bonneville Power Administration in their renewable energy department. Through a combination of excellent education and good work experience, Green Power’s management team will be able to successfully execute on its business plan.

Green Power has conservatively forecasted sales of $202,343 for year two, rising to $238,402 for year three. Net profit will be reached in the second year. Through a combination of a proven business model, a strong management team, and this comprehensive energy business plan to guide the organization, Green Power will be long lasting, profitable business.

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It is Green Power Consultancy’s mission to provide the finest green energy solutions for new constructions as well as existing building owners/lessors. Through careful analysis, attentive customer support, and cost effective solutions, Green Power will become a stable business serving the Burlington community.

Keys to Success

Green Power has identified several keys to success that will be instrumental in creating a sustainable business.  If these keys are followed, the likelihood of success will significantly increase.

  • Offer solutions that are demanded by customers.
  • Ensure all of the solutions have economic considerations built into the respective models.
  • Only provide 100% customer satisfaction.  All customers must have their expectations exceeded.

Green Power has identified three objectives that it will pursue for the long-term success of the business:

  • Proven cost-benefit analysis environmental approaches to structure building, maintenance and energy consumption.
  • Become the premier environmental energy consultancy in the state within five years.
  • Reach profitability within three years.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Green Power is a Vermont-based L.L.C green energy consultancy. Green Power offers its services both to architects who are constructing new businesses as well as existing building owners/users who are looking to make their existing structure more environmentally sound.

Start-up Summary

Green Power will require the following equipment in order to begin operations:

  • Computer system including three workstations, standard laser printer as well as a wide mouth printer, Internet access, and assorted software such as Microsoft Office, QuickBooks and CadArchitect (the premier architect industry software).
  • Three work areas including two drawing tables and the assorted office supplies for the standard workdesks as well as the drawing tables.
  • Various bookshelves, lights, and couches (for clients).
  • Bike storage unit/locker.
  • Refrigerator, microwave, and assorted utensils for the lunch room.

Sbp, energy conservation business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $7,150
Start-up Assets to Fund $32,850
Total Funding Required $40,000
Assets
Non-cash Assets from Start-up $9,000
Cash Requirements from Start-up $23,850
Additional Cash Raised $0
Cash Balance on Starting Date $23,850
Total Assets $32,850
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Investor 1 $20,000
Investor 2 $20,000
Additional Investment Requirement $0
Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($7,150)
Total Capital $32,850
Total Capital and Liabilities $32,850
Total Funding $40,000
Start-up
Requirements
Start-up Expenses
Legal $2,000
Stationery etc. $200
Brochures $200
Rent $500
Research and Development $3,500
Expensed Equipment $750
Total Start-up Expenses $7,150
Start-up Assets
Cash Required $23,850
Other Current Assets $0
Long-term Assets $9,000
Total Assets $32,850
Total Requirements $40,000

Company Ownership

The two principal owners of Green Power is Dan and Sue Lang.

Green Power offers a wide range of environmentally-conscious energy solutions related to new and existing structures. The main areas of consulting that Green Power will offer are:

  • Passive heating: This applies to the construction of the new structures, designing the structure to capture and utilize heat that is either generated naturally or as a by-product of the building. Examples of passive heating include specific placement of the heating vents, the design and placement of the building and the windows.
  • Grey water: This is the capture and utilization of grey water.  Grey water is water that has been used for some other source such as in the faucets or rain water that can no longer be offered as potable, but still can be used for toilet flushing or land irrigation.
  • Renewable energy: This service offers customers the information needed to make intelligent decisions regarding the use of renewable energy sources. Renewable energy sources can be defined as sources of energy where the rate of energy depletion is not faster than the production rate.  Examples include: wind power, photovoltaics, hydro power, biomass, solar energy.
  • Employee transportation: This service is to reduce the energy consumed by employees traveling to work. Typical aspects of the plan are outlining public transportation options, developing a company subsidized public/alternative transportation voucher, building covered bicycle lockers and shower facilities as well as other activities designed to increase the number of employees using bicycles as their main source of transportation to work.
  • Efficient building construction: This focuses on the use of local building materials thereby decreasing energy needed for transportation as well as the utilization of recycled materials for construction decreasing energy demands for the manufacture of new building materials.

Market Analysis Summary how to do a market analysis for your business plan.">

Green Power has segmented the market into two distinct target market groups. The first group is architects who are building a structure either speculatively (infrequently) or for a client (generally). The second customer group is individual customers who desire environmental elements designed into their building. The niche that Green Power has chosen to participate in is a fairly new field. Green Power faces competition from eco-architects as well as from the local utilities that may have a small department that offers green energy consultation advice. The industry often operates to satisfy clients; it is the end customer that typically requests green energy designs and they either seek out a specific architect or they request their architect to receive guidance from firms such as Green Power.

Market Segmentation

Green Power has segmented its target market into two different customer groups, both equally attractive.

Pro Tip:

  • The architect firms typically have two – nine partners.
  • Offer both residential and commercial design work, however 67% of their work is commercial.
  • The firms typically have only a handful of service providers that they work with. This means that once they find someone they trust, they develop a long-term relationship with that service provider.
  • Yearly revenue ranges from $200 thousand – $5 million.

Individual customers This segment contains consumers who are either having a residential home, or a commercial structure, designed. Due to their personal environmental concerns and a recognition that it can be cost effective to have building decisions with environmental considerations, they have requested Green Power’s assistance. They are generally working directly with Green Power for their design needs and will likely then take this design criteria to their builder.

  • The individual is an environmentalist and they take into account how their action will impact the environment.
  • The age range of clients is 35-49.
  • Average household income is $65,000. Please note that while the overriding concern in using Green Power’s services is the positive impact on the environment, a cost benefit analysis indicates that in the long term it is cost effective to adopt green energy considerations.
  • 89% of the group have at least an undergraduate degree, 26% have a graduate degree.

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Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Architects 7% 23 25 27 29 31 7.75%
Individual customers 9% 16,009 17,450 19,021 20,733 22,599 9.00%
Total 9.00% 16,032 17,475 19,048 20,762 22,630 9.00%

Target Market Segment Strategy

Green Power has chosen these two market segments for compelling reasons. The architects have been focused on because they are the service providers that do the bulk of the design work for residential and commercial structures. The architects are used as sales people for Green Power’s services, they are the ones that can then sell these services to their customers. It benefits the architects because they are able to offer a wider range of value-added-services to their customers without spending capital of learning the information themselves. By aligning itself with architects, Green Power is able to offer their services to a larger group of people.

Green Power will also serve individual customers. These are people who know that they want environmental considerations made in the design of their structure and will seek out a firm such as Green Power to have this work done. Burlington is a wonderful place to locate Green Power as there is a high population of environmentally-conscious people in this city. This provides Green Power with a large market of interested customers. Additionally, this market group is attractive because people that have environmental tendencies are often vocal about their commitments or causes. By offering green energy services, Green Power allows this group of people to act on what they believe in on a personal level, adhering to the wise saying think globally, act locally.

Service Business Analysis

The environmental power consultancy industry is fairly new. Only recently has there been an emergence of firms that offer these services. This can be explained by several factors. First, people are becoming more environmentally aware these days, a function of many things including the recent problems with the Middle East and Fundamental Islamists. These recent problems have forced people to reconsider America’s dependence on oil and the need to maintain good relationships with Saudi Arabia only because of their oil. Another factor that has contributed to the growth of green power is that it has become increasingly cost effective to make business decisions while taking into account the decisions impact on the environment. For years an environmental decision was based on personal consciousness and ethics, not overriding economic factors. Now money can be saved when environmental impacts are taken into account. Please read the following section which will indicate the different players within the industry.

Competition and Buying Patterns

The competition generally takes two different forms:

Eco-architects These are architects that specialize in environmental design considerations. Typically their entire practice is based around structures that have environmental elements. Green Power could actually be within this industry niche, however they are able to serve a larger customer baser, therefore earn more revenue as well as make a positive impact in our world by offering its services to both end consumers as well as regular architects as opposed to the business model of only serving one set of customers.

Local utility The local utilities often have a department that offers free consultation for environmental design considerations. There are incentives for the utilities to attempt to curb their customer’s use of their energy. These incentives take the form of not needing to make as many capital expenditures to develop the power delivery infrastructure to accommodate the increased load for energy demands. Therefore, the more the utility is able to get their customers to conserve, the less money they have to spend on infrastructure improvements, the more money they earn. That being said, the utility often has a small department that offers tips on energy conservation. While these tips can be quite helpful, since they are offered for free for the power customers, they are not nearly as comprehensive as they could be. So while they provide good initial tips, the local utility is not a strong competitor to serve a client who is committed to making as much of a positive environmental difference as can be achieved by using a specialized firm.

The buying pattern for consumers is currently being defined as we speak, a function of how new the industry is. Currently, purchasing decisions are based on customers typically making requests for these services from their architect or they do a bit of research to determine who offers these services. As the industry becomes more mature, firms will become more established and reputation and visibility/awareness will shape buying decisions. Since there is a wide range of options regarding implementation, price is less of a consideration for the decision since most of the service providers can offer a wide range of inexpensive to expensive options.

Strategy and Implementation Summary

Green Power’s business strategy recognizes and will leverage the fact that a lot of business will be transacted through networking and word-of-mouth referrals. With this in mind, Green Power will work diligently to build alliances with architects who can co-brand their services with Green Power thereby increasing Green Power’s potential qualified customers.

Green Power will rely on its competitive edge of adopting a cost effective environmental solution so in addition to meeting environmental concerns of the customer, Green Power’s services will save the customer money over time.The marketing strategy will highlight both environmental attributes as well as economic ones.The marketing campaign will recognize the existence of two distinct market customers. Lastly, the sales strategy will offer a compelling economic analysis of how the customer can save money by adopting Green Power’s designs.

Competitive Edge

Marketing strategy.

The marketing strategy is based on developing an awareness regarding Green Power’s services to both architects and the end use consumers. Green Power will strongly use networking as a means to develop relationships with many of the city’s architects. Although Burlington is a reasonably-sized city, the architect community is fairly close knit. If one wanted, it is easy to develop active relationships with many of the different architects in Burlington. By developing these relationships, Green Power will allow the firms to become familiar with not only the services offered by Green Power, but also the personalities involved, recognizing that much of business is transacted by who you know. Advertisements will be placed in the local architect newsletter.

To reach the end user customers, Green Power will use Advertisements in the local paper as well as within the yellow pages. As a means of increasing visibility of Green Power, GP will participate in several community-based seminars that serve as a free source of information for the citizens of Burlington. Green Power believes that participating in the seminars will be an effective way of meeting many of the potential customers and allowing them to become familiar with Green Power expertise.

Sales Strategy

The sales strategy implicitly and explicitly takes into account the philosophy that the reason that many of the people are attracted to Green Power is because of its personal environmental ethics. The sales strategy will leverage this desire with the fact that environmental decisions can have positive economic impacts in the long term. Therefore the sales strategy will leverage the competitive edge of economic justification as the method for turning sales leads into customers. For this strategy to be effective, Green Power will present customers case studies and quantifiable data proving economic justification.

Sales Forecast

Green Power has adopted a conservative sales forecast for the business plan. By adopting a conservative prediction, it is easier to hit sales goals and increase the likelihood that the business plan is relevant to the business. If the sales forecasts was wildly off, it casts doubt on the application of the plan for the business.

Sales will be slow for the first several months, a function of Green Power being a start-up organization. As Green Power increases their customer pool and more architects become familiar with GP’s services, business will grow. Growth will be forecasted and preferenced as steady. The steadier it is, the easier it will be to deal with the incremental growth in work. Please view the following table and charts for a graphical representation on monthly and yearly sales.

Cost of sales for a consulting company are negligible, however, cost of architects sales will be 20%, since we will pay commissions to the architects for referrals.

Sbp, energy conservation business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Architects $41,060 $95,445 $112,454
Individuals $45,987 $106,898 $125,948
Total Sales $87,047 $202,343 $238,402
Direct Cost of Sales Year 1 Year 2 Year 3
Architects $8,212 $19,089 $22,491
Individuals $0 $10,690 $12,595
Subtotal Direct Cost of Sales $8,212 $29,779 $35,086

Green Power has identified several milestones as a way of setting achievable goals. Performance is likely to be improved through the quest of reaching the goals. This phenomenon is well documented and is used in large corporations such as GE’s Seven Sigma Program as well as many state’s benchmarked-based assessment testing systems. Green Power has identified the following milestones:

  • Business plan completion;
  • 10th customer;
  • Revenues exceeding $50,000;
  • Profitability.

Sbp, energy conservation business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2003 2/15/2003 $0 Dan & Sue Business planning
10th customer 1/1/2003 3/30/2003 $0 Sue Sales
Revenue exceeding $50,000 1/1/2003 8/30/2003 $0 Sue Sales
Profitability 1/1/2003 2/28/2004 $0 Dan Accounting
Totals $0

Web Plan Summary

The website will be used as a marketing tool. It will offer a description of the services offered as well as a listing of different clients served.

Website Marketing Strategy

The plan for marketing the site is fairly simple: submission to search engines such as Google and listing the website on all of the company’s correspondence and printed marketing/sales media.

Development Requirements

Green Power will utilize a local programmer to build the site.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The company will be lead by the husband and wife team of Dan and Sue Lang. Dan grew up in Oregon and attended the University of Oregon for his undergraduate education. Dan’s major was environmental studies and business. After graduation Dan worked for a year at an environmental testing company. Through general networking, Dan was introduced to one of the three principals of a company called The Seal Company. The business model for this company was to make assessments for private and public companies as to their environmental impact. His position with The Seal Company provided him with wonderful insight into the industry of environmental assessment and helped provide him with a foundation of knowledge regarding green energy, just one of the areas of assessment. After a year of this Dan enrolled into the University of Oregon’s Master’s Architect program, taking course work in environmental design. This degree would provide Dan with the skills to make a larger impact in his community.

Sue went to the University of Burlington for undergrad and then moved out to Oregon to attend Willamette University’s MBA program. After her degree Sue moved up to Portland and worked for the Bonneville Power Administration where she worked in their renewable resource division. Much of her projects were marketing based, trying to gain public acceptance of renewable energy sources.

Personnel Plan

For the first three months of business the organization will be quite lean, consisting of just Dan and Sue. Dan will be responsible for most of the business-related issues as well as doing research and helping out with the work projects. Sue’s responsibilities will be marketing and sales based. She will work hard on developing visibility for the company as well as working with prospective customers. Green Power has forecasted that on month four it will need administrative assistance. The duties will be answering the phone, some input accounting, and other clerical functions. Initially this person will be part time but will move to full time at the beginning of year two.

Personnel Plan
Year 1 Year 2 Year 3
Dan $24,000 $30,000 $36,000
Sue $24,000 $30,000 $36,000
Associate consultant $0 $15,000 $30,000
Administrative assistant $4,600 $18,000 $20,000
Total People 3 3 4
Total Payroll $52,600 $93,000 $122,000

Financial Plan investor-ready personnel plan .">

The following sections will outline the important Financial Assumptions.

Important Assumptions

The following table details important Financial Assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

Break-even Analysis

The Break-even Analysis is indicated below.

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Break-even Analysis
Monthly Revenue Break-even $7,333
Assumptions:
Average Percent Variable Cost 9%
Estimated Monthly Fixed Cost $6,641

Projected Profit and Loss

The following table and charts will indicate Projected Profit and Loss.

Sbp, energy conservation business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $87,047 $202,343 $238,402
Direct Cost of Sales $8,212 $29,779 $35,086
Other Costs of Sales $0 $0 $0
Total Cost of Sales $8,212 $29,779 $35,086
Gross Margin $78,835 $172,565 $203,317
Gross Margin % 90.57% 85.28% 85.28%
Expenses
Payroll $52,600 $93,000 $122,000
Sales and Marketing and Other Expenses $4,800 $4,800 $4,800
Depreciation $1,800 $1,800 $1,800
Rent $6,000 $6,000 $6,000
Utilities $2,400 $2,400 $2,400
Insurance $2,400 $2,400 $2,400
Payroll Taxes $7,890 $13,950 $18,300
Other $1,800 $1,800 $1,800
Total Operating Expenses $79,690 $126,150 $159,500
Profit Before Interest and Taxes ($855) $46,415 $43,817
EBITDA $945 $48,215 $45,617
Interest Expense $0 $0 $0
Taxes Incurred $0 $13,924 $13,145
Net Profit ($855) $32,490 $30,672
Net Profit/Sales -0.98% 16.06% 12.87%

Projected Cash Flow

Sbp, energy conservation business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $87,047 $202,343 $238,402
Subtotal Cash from Operations $87,047 $202,343 $238,402
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $87,047 $202,343 $238,402
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $52,600 $93,000 $122,000
Bill Payments $30,707 $71,679 $83,201
Subtotal Spent on Operations $83,307 $164,679 $205,201
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $83,307 $164,679 $205,201
Net Cash Flow $3,740 $37,664 $33,201
Cash Balance $27,590 $65,254 $98,456

Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $27,590 $65,254 $98,456
Other Current Assets $0 $0 $0
Total Current Assets $27,590 $65,254 $98,456
Long-term Assets
Long-term Assets $9,000 $9,000 $9,000
Accumulated Depreciation $1,800 $3,600 $5,400
Total Long-term Assets $7,200 $5,400 $3,600
Total Assets $34,790 $70,654 $102,056
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $2,795 $6,169 $6,898
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $2,795 $6,169 $6,898
Long-term Liabilities $0 $0 $0
Total Liabilities $2,795 $6,169 $6,898
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($7,150) ($8,005) $24,485
Earnings ($855) $32,490 $30,672
Total Capital $31,995 $64,485 $95,157
Total Liabilities and Capital $34,790 $70,654 $102,056
Net Worth $31,995 $64,485 $95,157

Business Ratios

The following table contains typical Business Ratios of both Green Power as well as the industry as a whole.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 132.45% 17.82% 8.18%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 41.37%
Total Current Assets 79.30% 92.36% 96.47% 75.36%
Long-term Assets 20.70% 7.64% 3.53% 24.64%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.03% 8.73% 6.76% 31.49%
Long-term Liabilities 0.00% 0.00% 0.00% 16.85%
Total Liabilities 8.03% 8.73% 6.76% 48.34%
Net Worth 91.97% 91.27% 93.24% 51.66%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 90.57% 85.28% 85.28% 100.00%
Selling, General & Administrative Expenses 91.55% 69.23% 72.42% 82.59%
Advertising Expenses 0.00% 0.00% 0.00% 1.16%
Profit Before Interest and Taxes -0.98% 22.94% 18.38% 1.47%
Main Ratios
Current 9.87 10.58 14.27 1.93
Quick 9.87 10.58 14.27 1.50
Total Debt to Total Assets 8.03% 8.73% 6.76% 3.09%
Pre-tax Return on Net Worth -2.67% 71.98% 46.05% 59.56%
Pre-tax Return on Assets -2.46% 65.69% 42.93% 7.63%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -0.98% 16.06% 12.87% n.a
Return on Equity -2.67% 50.38% 32.23% n.a
Activity Ratios
Accounts Payable Turnover 11.99 12.17 12.17 n.a
Payment Days 27 22 28 n.a
Total Asset Turnover 2.50 2.86 2.34 n.a
Debt Ratios
Debt to Net Worth 0.09 0.10 0.07 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $24,795 $59,085 $91,557 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.40 0.35 0.43 n.a
Current Debt/Total Assets 8% 9% 7% n.a
Acid Test 9.87 10.58 14.27 n.a
Sales/Net Worth 2.72 3.14 2.51 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Architects 0% $2,500 $2,654 $2,747 $3,212 $3,455 $3,525 $3,656 $3,787 $3,987 $3,902 $3,878 $3,757
Individuals 0% $2,800 $2,972 $3,077 $3,597 $3,870 $3,948 $4,095 $4,241 $4,465 $4,370 $4,343 $4,208
Total Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Architects $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Individuals $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Dan 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Sue 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Associate consultant 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Administrative assistant 0% $0 $0 $0 $400 $400 $400 $500 $500 $600 $600 $600 $600
Total People 2 2 2 3 3 3 3 3 3 3 3 3
Total Payroll $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Direct Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $500 $531 $549 $642 $691 $705 $731 $757 $797 $780 $776 $751
Gross Margin $4,800 $5,096 $5,274 $6,167 $6,634 $6,768 $7,020 $7,271 $7,655 $7,492 $7,446 $7,213
Gross Margin % 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57% 90.57%
Expenses
Payroll $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
Sales and Marketing and Other Expenses $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Depreciation $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Payroll Taxes 15% $600 $600 $600 $660 $660 $660 $675 $675 $690 $690 $690 $690
Other $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Total Operating Expenses $6,200 $6,200 $6,200 $6,660 $6,660 $6,660 $6,775 $6,775 $6,890 $6,890 $6,890 $6,890
Profit Before Interest and Taxes ($1,400) ($1,104) ($926) ($493) ($26) $108 $245 $496 $765 $602 $556 $323
EBITDA ($1,250) ($954) ($776) ($343) $124 $258 $395 $646 $915 $752 $706 $473
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($1,400) ($1,104) ($926) ($493) ($26) $108 $245 $496 $765 $602 $556 $323
Net Profit/Sales -26.42% -19.63% -15.90% -7.24% -0.36% 1.45% 3.15% 6.18% 9.05% 7.28% 6.76% 4.06%
Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Subtotal Cash from Operations $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $5,300 $5,626 $5,824 $6,809 $7,325 $7,473 $7,751 $8,028 $8,452 $8,272 $8,221 $7,965
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $4,000 $4,000 $4,000 $4,400 $4,400 $4,400 $4,500 $4,500 $4,600 $4,600 $4,600 $4,600
Bill Payments $85 $2,551 $2,581 $2,604 $2,754 $2,801 $2,816 $2,857 $2,884 $2,937 $2,920 $2,915
Subtotal Spent on Operations $4,085 $6,551 $6,581 $7,005 $7,154 $7,201 $7,316 $7,357 $7,484 $7,537 $7,520 $7,515
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $4,085 $6,551 $6,581 $7,005 $7,154 $7,201 $7,316 $7,357 $7,484 $7,537 $7,520 $7,515
Net Cash Flow $1,215 ($925) ($758) ($195) $171 $272 $434 $671 $968 $735 $701 $450
Cash Balance $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $23,850 $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $23,850 $25,065 $24,140 $23,383 $23,188 $23,358 $23,630 $24,064 $24,735 $25,704 $26,439 $27,140 $27,590
Long-term Assets
Long-term Assets $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000
Accumulated Depreciation $0 $150 $300 $450 $600 $750 $900 $1,050 $1,200 $1,350 $1,500 $1,650 $1,800
Total Long-term Assets $9,000 $8,850 $8,700 $8,550 $8,400 $8,250 $8,100 $7,950 $7,800 $7,650 $7,500 $7,350 $7,200
Total Assets $32,850 $33,915 $32,840 $31,933 $31,588 $31,608 $31,730 $32,014 $32,535 $33,354 $33,939 $34,490 $34,790
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $2,465 $2,495 $2,513 $2,661 $2,708 $2,721 $2,761 $2,786 $2,839 $2,823 $2,818 $2,795
Paid-in Capital $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Retained Earnings ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150)
Earnings $0 ($1,400) ($2,504) ($3,430) ($3,923) ($3,949) ($3,841) ($3,597) ($3,101) ($2,336) ($1,734) ($1,178) ($855)
Total Capital $32,850 $31,450 $30,346 $29,420 $28,927 $28,901 $29,009 $29,253 $29,749 $30,514 $31,116 $31,672 $31,995
Total Liabilities and Capital $32,850 $33,915 $32,840 $31,933 $31,588 $31,608 $31,730 $32,014 $32,535 $33,354 $33,939 $34,490 $34,790
Net Worth $32,850 $31,450 $30,346 $29,420 $28,927 $28,901 $29,009 $29,253 $29,749 $30,514 $31,116 $31,672 $31,995

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business plan for renewable energy

Steps to Create Your Company’s Renewable Energy Strategy

business plan for renewable energy

August 1, 2018

Denielle Harrison

Former Manager, BSR

At the Global Climate Action Summit this fall, stakeholders from around the globe will meet in San Francisco to discuss how we can take climate ambition to the next level . Business can play a significant leadership role in accelerating the transition to a lower-carbon economy, and as we have seen through initiatives like the Renewable Energy Buyers Alliance (REBA) , renewable energy can be a key component of climate action efforts.

Corporate renewable energy procurement should be guided by a defined strategy based on available options, key priorities, and ambition. To create your strategy, you must identify your company’s motivations for procuring renewable energy, adopt supporting goals and commitments, and identify available internal human and financial resources to aid execution.

These are the steps we would suggest to help you get started.

1. Assess Your Options

The first step is to assess the landscape of renewable energy sourcing options available on the market to determine what is feasible. This will ultimately determine the renewable energy options available to you.  

Current and future policies will impact renewable energy costs, incentives, and availability. The Climate Policy Tracker can be a useful tool in assessing how regulations will impact your renewable energy choices in various jurisdictions.

After narrowing procurement options based on geography, your company must consider specific site constraints. Here are some questions to consider:

  • Is your real estate portfolio suitable for onsite renewable energy generation? Leased assets often pose a challenge for onsite generation, requiring companies to liaise with their landlords; however, renewable energy availability also poses a challenge. For example, a company that leases retail space in an urban locality with poor solar energy potential may not have the option of leveraging onsite renewable energy, despite a supportive landlord.
  • If your real estate portfolio is suitable for onsite generation, what is the energy capacity of potential projects/installations? Companies with owned or leased assets that support onsite renewable energy generation should consider the energy capacity of any potential projects/installations and use this to calibrate their local procurement implementation. Asset type and energy capacity should be significant considerations when negotiating contract terms with potential project developers.
  • What is your time horizon? Long-term contracts should not be considered for sites that are likely to be eliminated from the real estate portfolio before the termination of the power generation contract.

2. Create Your Strategy

Once you’ve determined what your renewable energy options are, the next step is to determine your ambition level and define your strategy for renewable energy. To ensure adoption and integration within your company, this should complement both your business and sustainability strategies. A company with existing energy intensity, greenhouse gas reduction, and business growth goals should design a renewable energy strategy that complements existing objectives and initiatives to facilitate execution. Available financial resources should factor prominently into this and will ultimately dictate the realistic level of ambition your company can set.

Your strategy should reflect your company’s motivation for renewable energy procurement. For example, a company seeking to grow the renewable energy market and illustrate private-sector demand for clean power may prioritize options like new onsite or regional solar installations and choose to only purchase renewable energy attributes (e.g. RECs) that are bundled with renewable power. One example of this is Intuit’s Purely Green Program , which the company launched in part to show market demand for wind energy in Texas for its business partners, employees, and customers. Adobe’s renewable energy strategy prioritizes onsite installations and PPAs, supported by energy efficiency and policy advocacy, to meet its 100 percent renewable energy goal. Anheuser-Busch InBev’s strategy aims to source roughly 75 percent of its electricity from direct PPAs and roughly 25 percent from onsite installations.

3. Identify Opportunities to Collaborate

While renewable energy procurement variables can be complex to navigate, you do not need to work in isolation. Collaborating with other companies can help you achieve your strategic renewable energy objectives and minimize the barriers to entry for procurement.

For example, you could consider partnering with a group of companies with regional operations who are willing to enter into a shared procurement contract. This approach, known as consortium aggregation, is both feasible for companies with energy demands that are typically individually too small for project developers and companies with significant energy demands that can appropriately distribute the project load. For example, AkzoNobel, DSM, Google, and Philips leveraged this approach in the Netherlands—each company assumed an equal stake in a wind PPA there. The shared contract can also be anchored by a company that assumes the majority share of the energy, leaving smaller companies to assume small shares of the overall project load.

Initiatives like the Future of Internet Power and REBA can also provide the resources and tools for companies to execute against their renewable energy strategies together. Contact us if you’re interested in learning more about how you can help increase your climate ambition with renewable energy in advance of the Global Climate Action Summit.

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals .

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business plan for renewable energy

How to Write Renewable Energy Business Plan? Guide & Template

Ivan Smith

In the quest for sustainable energy solutions, the renewable energy sector has emerged as a beacon of hope, offering both environmental benefits and economic opportunities. However, navigating this dynamic industry requires a well-crafted roadmap, and that’s where a renewable energy business plan comes into play. In this article, we delve into the intricacies of developing a comprehensive business plan tailored to the renewable energy sector.

What is a Renewable Energy Business Plan?

A renewable energy business plan outlines the strategic direction and operational framework for a venture focused on harnessing renewable energy sources such as solar, wind, hydro, biomass, and geothermal. It serves as a blueprint for entrepreneurs, investors, and stakeholders, elucidating the company’s mission, objectives, target market, competitive analysis, financial projections, and risk mitigation strategies.

Why do you need a business plan for a Renewable Energy?

Clarity of Vision: A business plan crystallizes your vision, delineating the steps needed to transform renewable energy aspirations into tangible outcomes. Attracting Investors: Investors seek assurance and clarity. A well-defined business plan enhances credibility and increases the likelihood of securing funding. Risk Mitigation: Anticipating challenges and devising contingency plans mitigates risks, fostering resilience in the face of uncertainties. Strategic Decision-Making: A structured plan serves as a compass, guiding strategic decisions and resource alocation, ensuring alignment with long-term objectives.

Source of Funding for Renewable Energy Business

Funding renewable energy ventures requires innovative approaches due to the capital-intensive nature of projects. Sources of funding include:

Venture Capital Venture capitalists seek high-growth opportunities in renewable energy startups, providing capital in exchange for equity. Government Grants Governments offer grants and subsidies to incentivize renewable energy adoption, fostering industry growth. Bank Loans Financial institutions provide loans tailored to renewable energy projects, often with favorable terms and conditions. Crowdfunding Crowdfunding platforms enable individuals to contribute funds to renewable energy initiatives, leveraging collective support.

How to Write a Renewable Energy Business Plan?

Executive Summary: Concisely outline the venture’s mission, products/services, target market, and financial projections. Market Analysis: Evaluate market dynamics, identify target demographics, and assess competitive landscape. Product/Service Offering: Detail the renewable energy solutions offered, highlighting unique selling propositions. Marketing and Sales Strategy: Define marketing channels, sales tactics, and customer acquisition strategies. Operational Plan: Describe operational processes, resource requirements, and logistical considerations. Financial Projections: Present revenue forecasts, expense budgets, cash flow projections, and return on investment analysis. Risk Management: Identify potential risks and outline mitigation strategies to safeguard business continuity.

Advantages of starting a Renewable Energy Business

Environmental Impact: Contributing to the transition to clean energy reduces carbon emissions and mitigates climate change. Economic Opportunities: Renewable energy ventures stimulate economic growth, creating jobs and fostering innovation. Energy Independence: Harnessing local renewable resources enhances energy security and reduces dependence on fossil fuels. Long-Term Viability: Renewable energy sources are abundant and inexhaustible, offering sustainable solutions for future generations.

In conclusion, a well-crafted renewable energy business plan is essential for navigating the complexities of the industry, attracting investors, and charting a course towards sustainable success. By meticulously outlining objectives, strategies, and financial projections, entrepreneurs can harness the power of renewable energy to drive positive change and prosperity.

Renewable Energy Business Plan FAQs

How can I start a renewable energy business?

Conduct market research, make a business plan, obtain financing and permits, buy equipment, hire staff, market to potential customers. Common models are solar/wind installing or power production.

Is renewable energy profitable?

Yes, renewable energy can be highly profitable due to government incentives, ongoing utility costs for customers, and increasing eco-conscious market demand. Profit margins can exceed 30%.

How can I make my own renewable energy?

Install solar panels, wind turbines, or other generation equipment on your property to directly harness renewable energy from the sun, wind, etc. Excess power may be sold back to the grid.

How do I start investing in renewable energy?

Research companies or funds focused on renewables development and go through a broker to buy stocks or other financial assets exposed to the industry.

Does Warren Buffett invest in renewable energy?

Yes, Warren Buffett’s Berkshire Hathaway has invested over $30 billion into wind and solar power companies and projects. This includes large stakes in leading renewables firms.

How do renewable energy projects make money?

By selling produced electricity to power companies and direct commercial customers at favorable fixed rates through power purchase agreements spanning 20+ years.

Ivan Smith

Written by Ivan Smith

Hello, I'm Ivan Smith, a graduate with a Bachelor of Business Administration in Marketing. Currently, I'm actively engaged in practicing business plan writing.

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business plan for renewable energy

Policy Notes: DOE Philippine Energy Plan 2023-2050

business plan for renewable energy

09 July 2024 – The Makati Business Club would like to share that the Department of Energy (DOE) released a revised and updated version of the Philippine Energy Plan (PEP). The current version now covers 2023 to 2050. According to the revised PEP, the Philippines is poised to achieve a renewable energy (RE) share of over 40% in the total energy mix by 2030 and to surpass 50% by 2040.

The DOE projects that renewable energy will contribute 41.45% to the energy mix by 2030 and 56.92% by 2040.

While the targets may seem ambitious, it is important to note the following:

  • DOE currently holds service contracts for RE projects totaling 93.7 GW. This reflects substantial interest from local and foreign private sectors in developing RE projects in the Philippines, primarily focusing on offshore wind and solar projects.
  • DOE has already granted the following service contracts:
  • 21 GW for solar projects (above target of 10 GW)
  • 12 GW for hydroelectric plants (above target of 5.2 GW)
  • 58 GW for offshore and onshore wind projects (above target of 11 GW)

If projects are executed in a timely manner, the projected capacities will significantly exceed the 35% RE target by 2030.

MBC advocates for secure, affordable, and renewable power in the Philippines. If you want to learn more about our power advocacy activities, have additional insights, or want to participate in future discussions on this or other subjects, please reach out to [email protected] and [email protected].

If you would like to access the full PEP, kindly access these links:

  • PEP 2023-2050 (Volume I)
  • PEP 2023-2050 (Volume II)
  • PEP 2023-2050 (Volume III)

MBC meets Mayor Ruffy Biazon, Muntinlupa signs onto MBC project

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New energy businesses: The independence versus integration dilemma

There is enormous value at stake in the energy transition as the world continues to move toward cleaner energy. Electrification and renewables, in particular, show accelerated growth, with electric power and hydrogen expected to represent 32 percent of the global energy mix by 2035 and 50 percent by 2050 (Exhibit 1). It’s hardly surprising that energy incumbents are entering this new energy space. The potential 2030 market opportunity in new energy businesses is estimated at $3 trillion, with top energy majors expected to make an average investment of $35 billion between 2022 and 2030. 1 McKinsey analysis.

About the authors

This article is a collaborative effort by Esmee Bergman , Ignacio Fantaguzzi, Christopher Handscomb , Jesper Ludolph , and Phil Quadri representing views from McKinsey’s Global Energy & Materials Practice.

As many energy majors embark on their own new energy business ventures, an important question on their minds is whether they can strike the right balance between dependence and independence, harnessing the advantages of being an incumbent while enabling the agility of a start-up.

With new energy businesses in their early days, there are no definitive answers to this question of independence or integration; different types of new businesses are seeing initial success with different operating models. However, there are key choices and considerations that can help incumbents avoid the most common pitfalls of business building. This article explores the different operating models chosen for new energy ventures by companies with an established incumbent business (for example, oil and gas and utilities).

Why the right choice matters

Leaders can underestimate the difficulty of starting a new venture within the boundaries of existing processes, systems, culture, and behaviors. New businesses often fail to scale. Only 16 percent of executives in Fortune 100 companies report that their corporate business builds have achieved blockbuster success after four years. 2 Matt Banholzer, Markus Berger-de León, Subu Narayanan, and Mark Patel, “ How industrial incumbents can create new businesses ,” McKinsey, November 13, 2019. The remainder were partially successful at best.

Disruption was once considered the domain of start-ups. Today, however, incumbents are actively using this strategy themselves to disrupt the industry. Incumbents are rightly asking how to strike the right balance between dependence and independence when it comes to their new energy business.

The pressure to make the right choice is enormous, given its impact on operational performance. Clear prioritization and end-to-end accountability for business units and teams, for example, can drive an uplift of more than 30 percent in operational performance. Ensuring purpose and the ability to operate autonomously to get things done can increase employee engagement by 30 percentage points. And creating teams of doers and removing red tape can turn plans into action five to ten times faster than if the incorrect operating model has been chosen. 3 Wouter Aghina, Christpher Handscomb, Olli Salo, and Shail Thaker, “ The impact of agility: How to shape your organization to compete ,” McKinsey, May 25, 2021.

Weighing the options

Corporate structures for new energy businesses range from full business separation to full integration within the core business, each with its own benefits and risks.

Full separation

Case study: eni creates an independent renewables business—plenitude.

In 2023, Eni, a leading energy company, decided to fully carve out their renewables business in order to diversify their portfolio and accelerate their growth. As part of this process, they combined their existing renewables generation business with their retail, energy management, finance, and environmental, social, and governance operations. 1 Eni retail and renewables capital markets day , Eni, November 22, 2021. In doing so, a financially self-sufficient company was created with an entirely independent operating model from the parent company, with some exceptions on risk management, compliance, and selected audit processes. The board of the new venture was made up of independent board members as well as several members selected from the parent company.

Creating the fully independent organization, Plenitude, allowed them to integrate the renewables value chain (from generation to consumers), better position this part of the business to attract “green” financing, and achieve a higher valuation for the combined entities.

In separation model, the new business can be set up as a separate entity (such as a subsidiary). As a subsidiary, the new business has its own legal and financial structure, leadership team, processes, and people model. In many cases, it is largely funded by the parent company but often attracts additional external funding and partners (see sidebar “Case study: Eni creates an independent renewables business—Plenitude for an example of this approach).

BP partnered up with a renewables venture

An example of a partnership approach is LightsourceBP. In 2017, BP initiated a collaboration with Lightsource Renewable Energy, investing $200 million for a 43 percent stake. 1 “The deal on the Lightsource deal,” bp, March 15, 2018. Two years later, this collaboration became LightsourceBP, a 50:50 joint venture. For BP, it offered a way to establish a start-up-minded renewables business with solar expertise. Conversely, Lightsource Renewable Energy gained credibility, capital, and process standardization through the BP association, leading to rapid growth in the pipeline from five markets and 1.5 gigawatts (GW) to 19 markets and 55 GW in the pipeline in just five years. 2 “Better together: Five years of Lightsource bp,” bp, December 14, 2022.

Currently, LightsourceBP is transitioning to closer integration within BP’s Gas and Low Carbon unit, aiming to share the capabilities, experience, and learnings from their other technologies (for example, onshore wind).

What can we learn from this? Opting for this level of independence for the new venture offers autonomy and decision making free from the processes in the parent company which are often designed for a different type of business. External talent can infuse an entrepreneurial mindset and drive rapid expansion. However, such independence potentially sacrifices benefits like access to the parent company’s customer base, stakeholder network, distribution channels, and assets. It also necessitates establishing its new processes, systems, and support functions.

An alternative approach is to form a partnership with an existing renewables venture. The incumbent often provides the brand, access to customers, capital, and seconds specific key capabilities into the venture while the renewables venture provides the lean governance, processes, and culture required to grow at pace (see sidebar “BP partnered up with a renewables venture” for the story of how BP formed a joint venture to accelerate their solar business).

Integration into the existing structure

Edp renewables goes through a journey with varying levels of integration over time.

EDP Renewables (EDPR), one of the largest renewables players in the world, has been through a journey in terms of its level of independence.

EDPR’s origin story is closely tied to EDP’s strategic decision to expand into the renewable energy sector. In 2006, EDP created a dedicated division focused on renewable energy, which laid the foundation for what would become EDPR. This division was tasked with developing, building, and operating renewable energy projects, with a particular emphasis on wind power.

Over the years, EDPR experienced significant growth and in 2008, EDPR completed its initial public offering (IPO), becoming a publicly traded company. 1 Alex Bugge, “EDP raises $2,4 bln in renewables unit IPO,” Reuters, June 2, 2008; “EDP Renováveis announces launch of its IPO at a price range of €7.40 to €8.90 per share,” EDP, May 15, 2008. This move allowed it to access additional capital for its renewable energy projects and signaled its commitment to further growth and expansion. Over time EDP and EDPR’s story has remained closely intertwined. This is a story about creating a renewables unit flexible enough to grow in an environment closer to a start-up than the conventional business with the ability to raise external capital needed to do so. EDP always retained more than 70 percent ownership of their EDPR listed subsidiary and they continue to be core to EDP with a shared CEO and CFO. 2 Capital markets day , EDP, 2023.

Many incumbents choose to set up a new energy business within their existing structure, with varying degrees of independence. The level of independence may vary over time, driven by the maturity of the business, the type of technology, and perceived synergies with the core business (see sidebar “EDP Renewables goes through a journey with varying levels of integration over time” to read the story of how EDP evolved the level of integration of their renewables business over time). This is a choice we also see in Equinor and others where the business is kept closer to the core when incubated and, over time, given more independence as it matures.

A more integrated new energy business, especially in the early phases, allows incumbents to provide their new ventures with advantages not available to an independent venture. These include customer access, brand recognition, negotiation leverage, stakeholder relations, existing base of suppliers, talent, intellectual property, distribution capabilities, as well as easier access to capital.

There is still a spectrum in terms of the level of integration across five relevant dimensions: steering model, who sets targets, capital allocation process, talent approach, and operational processes (Exhibit 2).

The first factor to consider is the steering model of the new business. In addition, incumbents need to decide what level of control the core business will have over the new energy business, and which part of the business sets the strategy and targets for the new venture. Capital allocation needs to be considered as does the talent approach. Where will the new energy venture source its talent and capabilities—from within the core business or from outside the core? And, lastly, what are the operational processes that the new venture will use, and specifically, which parts of the business are involved in project delivery?

Organizations make different choices on each of these five dimensions when setting up their new energy business. However, for capital allocation, we do see a trend that the large majority chooses to allocate an envelope to the new business with stage gates to release funding. For their talent approach, many of the oil and gas majors start out using a very integrated HR process but over time move to more independence for the new businesses.

Integrating a new business into the core traditional business of an incumbent does not come without risks. It is important to make sure entrenched ways of working, relatively cumbersome processes (compared to those of a start-up), cultural norms, and mindsets do not hamper the success of the new venture. Incumbents must be mindful of the risks and purposefully mitigate those.

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Based on our experience, eight imperatives are starting to emerge that leaders could consider when starting a new business that is integrated within the existing business:

  • Avoid short-term earnings pressure. Start-ups often prioritize market share and scale over short-term profits. If a parent company pressures its new businesses to meet return thresholds similar to the parent company’s, they are more likely to make decisions that limit long-term prospects.
  • Provide rapid access to capital. Access to capital is fundamental for scaling. The operating model could facilitate securing the necessary funding for projects, whether through internal resources, external investments, or partnerships. Financial flexibility is key to seizing growth opportunities when they arise.
  • Allow customization of core processes and project design. Streamlining operational processes is essential for cost-effectiveness and scalability in a low-margin industry (especially compared to major capital projects in oil and gas). Lean and efficient processes help manage project delivery, reduce overheads, and allocate resources effectively. In addition, designing projects with scalability in mind is essential. The new business could be set up to replicate successful project models in different markets, minimizing the need for reinventing the wheel.
  • Create shortcuts for decision-making processes and avoid red tape. A parent company’s bureaucracy can limit the ability to make quick decisions. The new business could be allowed to make swift decisions without being bogged down by bureaucratic processes. A streamlined decision-making framework accelerates the response to market opportunities and challenges.
  • Freedom in talent acquisition and retention. Attracting and retaining top talent is crucial. The setup could enable the new energy business to recruit skilled professionals who are passionate about the renewable energy sector. Offering competitive compensation, growth opportunities, and a compelling employee value proposition (EVP) is vital to building a talented workforce.
  • Allow for partnerships and ecosystem integration. Building strategic partnerships within the new energy ecosystem can accelerate growth. Collaborating with other industry players, research institutions, and start-ups can provide access to complementary capabilities, technologies, and markets.
  • Autonomy when setting up enabling services and platforms. Our research shows that successful business builders grant their new businesses considerable autonomy in core IT, marketing, data and analytics, and HR while making sure the new business stays aligned with the overall strategy of the company. 4 2021 Global report: The state of new-business building , McKinsey, December 6, 2021.
  • Entrepreneurial culture, aligned with the values of the parent company. Ensure that the new business’s culture, while different, aligns with the mission and values of the parent company. A cohesive cultural framework fosters collaboration, knowledge sharing, and a sense of purpose.

By carefully considering these critical factors, incumbents can position themselves for rapid growth and success in a competitive and evolving industry.

The first steps for incumbents

Choosing an operating model for a new energy business isn’t a matter of right or wrong—it’s about being clear on the choices and consequences. Striking the balance between dependence and independence to harness both the strengths of incumbency and the agility of start-ups is a complex challenge. The next steps for established energy majors involve carefully weighing the options, understanding the spectrum of integration, and mitigating potential risks.

To navigate this transformative journey successfully, leaders can consider various factors, including how much the new venture would benefit from customer access, brand recognition, negotiation leverage, stakeholder relations, existing base of suppliers, talent, intellectual property, distribution capabilities, as well as easier access to capital. They can also ask whether any of these benefits can be provided while balancing the need to create a lean, fast-growing organization with a different metabolic rate than the traditional business.

Once the corporate structure and level of independence versus integration have been chosen and the business has started, the next questions arise. How do you accelerate growth and scaling in terms of project pipeline, required workforce, and capability building?

In terms of growing rapidly, new businesses can look at acquisitions as one potential avenue for accelerating growth. An acquisition not only provides access to physical assets and partnerships, it also offers access to a new talent pool when executed well. For example, new businesses were 25 percent more likely to significantly exceed expectations when they made two acquisitions early in the scaling process compared to businesses that made no acquisitions or that made three or more. 5 2021 Global report: The state of new-business building , McKinsey, December 6, 2021. The new venture may need an “acquisition playbook” to ensure successful integration and retention of talent and constant screening of acquisition targets.

For talent strategy, the new business could focus on improving its EVP scores to attract and retain talent. Leaders could consider their EVP right from the start by designing an action plan that gives them a talent advantage.

On the leadership front, leaders need to operate with substantially greater speed and entrepreneurialism when entering the new energy sector. They may need to develop innovative ways of collaborating, both within their organizations and in the emerging energy ecosystems. A major challenge is attracting and retaining talent in an environment where traditional energy companies are under intense negative public pressure. These leadership challenges will be more keenly felt in the more integrated operating model, where leaders have to be the bridge between the old and new worlds.

New energy businesses have the potential to thrive, and many incumbents are eager to enter this high-growth space. The operating model that energy players choose can directly impact the success of their new business, and incumbents need to decide what strategy would best suit their business needs. This decision is only the beginning, but it can pave the way for future success.

Esmee Bergman is an associate partner in McKinsey’s Oslo office; Ignacio Fantaguzzi is a partner in the Houston office; Christopher Handscomb is a partner in the London office, where Phil Quadri is an associate partner; and Jesper Ludolph is a partner in the Bengaluru office.

The authors wish to thank Andre Anacleto, Oriane Chamoun, Sherlyn Chen, Tom Coxon, Lena Lindvall, Hege Nordahl, Des Paschou, and Christian Repole for their contributions to this article.

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business plan for renewable energy

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Monday, July 15, 2024

It will take an industrial revolution to meet renewable targets and create jobs

Lindiwe Johnson is project manager of employment strategy and economic diversification at the Presidential Climate Commission.

Lindiwe Johnson is project manager of employment strategy and economic diversification at the Presidential Climate Commission.

Published Jul 10, 2024

By Lindiwe Johnson

Earlier this year, the Department Mineral Resources and Energy (DMRE) now Energy and Electricity, released the South African Renewable Energy Master Plan (Sarem) as a government-led initiative and a strategic framework for the industrial development and integration of renewable energy sources into the country’s energy-mix.

Even though the new department in the 7th administration is yet to publicly sign it off, as far as the social partners are concerned the master plan is moot, and its implementation needs to be ramped up.

The foundation of Sarem rests on four core pillars: enhancing local capacities, fostering inclusive development, advancing industrial growth, and stimulating market demand. While progress has been made in certain areas feasibility varies, some objectives appear attainable given existing groundwork, while others face significant barriers hindering their realisation.

The objectives of the master plan primarily hinges on industrial development of the sectors and developing the necessary skills as well as the necessary expertise to support industry growth on the back of ensuring the creation and maintenance of quality jobs.

Sarem is aimed at promoting economic growth through the expansion of renewable energy and battery storage initiatives while advancing a fair and equitable transition to sustainable energy sources.

The plan is crucial for the country’s shift to renewable energy with the ultimate goal of achieving a low-carbon climate resilient economy. However, it’s facing delays and challenges, especially in local manufacturing and seizing new opportunities like the Renewable Energy Independent Power Producer Procurement Programme.

An opportunity to reignite manufacturing

The Presidential Climate Commission (PCC) concurs that the rapid roll out of renewable energy (wind and solar) and battery storage, with the accompanying balance of plant programme provides significant opportunities for localisation anchored in an industrial strategy that advocates thorough-going industrial transformation in the long term.

Recognising the pivotal role of green industrialisation in sustainable development and the needs to support various initiatives towards our energy-mix targets, the PCC has initiated a work programme to support Sarem and is aimed at identifying and leveraging green industrial opportunities outlined in Sarem and other nascent sectors.

The programme facilitates collaboration and fosters partnerships among key stakeholders from the government, business and developmental finance institutions to drive industrialisation in the renewable-energy sector to unlock barriers and opportunities in localising renewable-energy component manufacturing.

This is critical for the desired leap to a renewable energy future, aligned with Sarem goals and a just transition framework.

Sarem correctly identifies opportunities where local content can be developed over time such as towers, rotors and nacelles for wind turbines, and module assembly, mounts, trackers, cables and inverters for solar PV.

Manufacturing of equipment for the transmission sector could have greater emphasis, for instance Sarem could consider the manufacturing of inverters, transformers and transmission pylons and cables and other transmission components.

But for this master plan to be just, it needs to place greater emphasis and ultimately act on local, community and worker ownership models, and spell out incentives to enable socially-owned renewable projects and companies to go to scale. Integrating local communities into the supply chain will broaden economic participation and strengthen support for Sarem.

The right skills for a decarbonised energy-mix

This catalytic work programme seeks to initiate a skills matching process to ensure a capable workforce is equipped to capitalise on these opportunities, delving into bridging the skills gap and the occupations required for the renewable-energy sector, and aligning workforce capabilities with industry needs to capitalise on green business opportunities.

Scaling up the renewable and battery storage sector requires a new generation of technical and managerial skills specific to the rapidly evolving technologies. This is a central component of the just transition to grow decent work and livelihoods in new energy sectors – reskilling and upskilling of existing workers is crucial to realising the “just” element of the transition.

The focus on skills development needs for renewable energy still need to clearly articulate the required workforce to enable a competitive localised industry for renewable energy across manufacturing, installation and maintenance to enable planning and delivery reskilling, skilling and education programmes in vulnerable regions.

However, these measures are not sufficient on their own. In the absence of additional measures, South Africa will not achieve the deep and sustained industrialisation, localisation and competitive technology objectives that the global shift to renewable energy enables.

As the 7th administration hits the ground running it is necessary to secure early wins in South Africa’s renewable-energy industrialisation ambitions through Sarem opportunities.

BUSINESS REPORT

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Ramokgopa commits to aggressive pursuit of renewable energy

Electricity and energy minister says there will be ‘an exponential share of renewables in the energy mix’.

business plan for renewable energy

The newly reconfigured ministry of electricity and energy will aggressively pursue procurement of renewable energy as part of SA’s energy mix to  arrest rolling power cuts and improve electricity distribution and generation performance. 

This comes after the decision by President Cyril Ramaphosa to reconfigure the mineral resources & energy department that was established under minister Gwede Mantashe. Ramaphosa last week reappointed Mantashe as the minister of mineral resources & petroleum but merged the energy part of his brief with Kgosientsho Ramokgopa’s electricity responsibility, separating the department from the presidency.

The reconfiguration also involved the dissolution of the public enterprises department responsible for overseeing Eskom. Oversight of the state-owned power utility now lies with Ramokgopa, who says that with his expanded responsibilities this will see the department being “ultra-aggressive on the renewables side”. 

This differs from the posture of his predecessor, Mantashe, who was regarded by energy market watchers as a fossil fuel dinosaur, often putting him in the crosshairs of lobby groups fighting climate change.

“I am going to be ultra-aggressive on the renewable energy side. I think we have taken a bit longer than what is necessary so we will be ultra-aggressive,” Ramokgopa said during a press conference on Monday.

“I am a firm believer that it’s an [energy] mix that matters. You are going to see an exponential share of renewables in the energy mix and we need to signal to the market our intention to go that route and it must materialise.” 

“I will sit with everyone ... the commercial banks project sponsors, Eskom ... we are going to be leaders on this continent in relation to renewables.” 

Ramokgopa’s expanded powers include implementing the draft Integrated Resources Plan (IRP) 2023, which will be used by the government and Eskom to make decisions about the procurement of new generation capacity and other energy planning matters.

The IRP 2023 has been widely criticised for being flawed, lacking ambition (especially for cutting back on renewable energy procurement) and threatening to trap SA in many more years of load-shedding while procuring too much new capacity from expensive sources of energy such as nuclear and gas.

The final draft of the plan is expected to be released later in 2024 after the March deadline for public comments. 

Eskom breached the 100-day mark with no load-shedding on Friday, making a significant improvement in generation capacity for the power utility. However, Ramokgopa said the country was dealing with a new crisis where municipalities were forced to implement load reduction due to underinvestment in electricity infrastructure by municipalities.

“But we have seen that there is little to no investment that has been made in replenishing maintenance, the upkeep and protection and modernisation of this infrastructure. As a result of that, municipalities are under severe strain and they initiate what they call load reduction. So that has nothing to do with the performance of Eskom. It has everything to do with downstream action on the part of municipalities. That’s the crisis that is confronting us,” said Ramokgopa.

Meanwhile, in his weekly newsletter, Ramaphosa complimented Eskom for successfully securing electricity for 100 consecutive days .

“Thanks to the diligent implementation by Eskom of its generation operational recovery plan as well as a stepped-up maintenance schedule, there has been a marked improvement in the performance of the power stations that produce the bulk of SA’s electricity,” said Ramaphosa.

“The improvement in the reliability of power supply has been a relief for households, who have been able to go about their daily lives without the inconvenience of load-shedding.” 

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Separation of energy and minerals portfolios welcomed

Stuart theobald: electricity crisis is over; a radical new world beckons, business upbeat as sa's improved energy generation shows 'good sign', enhances confidence.

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Analysis: A strong start, but Starmer government's clean-energy plan faces stiff headwinds

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Prime Minister Sir Keir Starmer chairs the first meeting of his cabinet in 10 Downing Street

  • Chancellor Reeves lifts onshore wind ban and signals overhaul of planning policy
  • Chris Stark heads up new Mission Control centre to clear the way for renewables projects
  • But experts say high energy prices hindering drive to decarbonise sectors like steel
  • Important to plug green skills shortage so communities can benefit from new jobs

Wind turbines are seen behind Hunterston B Nuclear Power Station in West Kilbride, Scotland

Angeli Mehta writes the Policy Watch column for Ethical Corporation, Thomson Reuters' sustainable business magazine. She is a science writer with a particular interest in the environment and sustainability. Previously, she produced programmes for BBC Current Affairs and has a research PHD. @AngeliMehta

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China's northern region on high alert for heavy rainfall, xinhua reports.

Chinese authorities have placed the country's northern region on high alert for heavy rains and are preparing full emergency measures to mitigate any impact, state news agency Xinhua reported on Monday.

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2024 CPSS Conference / Banquet

This year's banquet will be held on Monday, September 30, 2024 , at McCrory Gardens in Brookings.

Register Now

  • 5:30 p.m. - Social
  • 6 p.m. - Banquet
  • 6:45 p.m. - Presentation of the CPSS Scholarship - Presentation of Wayne E. Knabach Excellence in Power Award
  • 7 p.m.- Keynote Presentation

Excellence in Power Awardee

Robert H. Schulte Principal, Schulte Associates LLC Managing Member, Power from the Prairie LLC

Robert H. Schulte

Bob Schulte has more than 40 years in the utility business, serving as an officer in both public and investor-owned utilities. He holds a B.S. in electrical engineering from SDSU, and an M.S. in electrical engineering from the University of Missouri-Columbia. During 16 years at Northern States Power (NSP), among other things he was lead planning engineer for planning and permitting for the 800 MW Sherburne County 3 power plant now in operation near Becker, Minnesota. He led the original development of the first nine major customer energy efficiency and interruptible load programs in the Upper Midwest, later versions of which are still in operation today. He led installation of the fourth-240 MVA, 115/13.8kV transformer under the Nicollet Mall serving downtown Minneapolis. He led regulatory cost recovery for decommissioning the Pathfinder nuclear power plant in Sioux Falls. As VP of rates and corporate strategy, he was responsible for development of the first Integrated Resource Plan (IRP) filing in Minnesota including, for the first time in company history, direct customer input. He led NSP senior officer decisions to install the first 10 Megawatts of large-scale wind facilities in the Upper Midwest, where thousands of MW are in operation today.

During the past 28 years in private practice at Schulte Associates LLC , an executive management consulting firm in Raleigh, North Carolina, he has served energy industry clients in resource planning, project development, organizational development and interim CEO/COO services. He used to plan and permit coal and nuclear plants. Now, he plans renewables, transmission and storage to replace them. He is the author of numerous industry articles on energy storage and interregional transmission. As managing member of Power from the Prairie (PftP) LLC, he is leading efforts to develop the 4,000 MW PftP interregional HVDC transmission line from Wyoming to Iowa. Many of the Participants in the recently completed Stage 1 PftP Concept Development Study (CDS) are CPSS members. Study report.

Bob lives in Raleigh. He recently served on the SDSU Foundation Council of Trustees. His daughter, Nikki Brower, is lead designer for the Brookings Register newspaper. His daughter, Melissa Schulte, is an advertising strategist for the Henkin/Schultz ad firm in Sioux Falls. The Schulte Family is SDSU Family of the Year for 2023, featuring 14 Jackrabbit grads since his father, H.J. Schulte, was all-conference for the Jacks in basketball 90 years ago before serving as head of the T&D Department for Northwestern Public Service in Huron for 20 years.

CPSS Scholarship Awardee

Shelby Mueller

Shelby, originally from Watertown, Minnesota, is the daughter of Noah and Nicole Mueller. During her time at SDSU, Shelby has attained a GPA of 3.3. She has been involved in improving freshmen classes as both a teaching assistant for their introductory to electrical engineering lab and a tutor for Circuits I. Shelby also has been involved with the IEEE student branch, as the secretary. She has interned for Burns and McDonnell for the past two years and will be returning as a full-time engineer in training in their substation department.

Keynote Presentation

  • Dr. Tmothy Hansen
  • Dr. Junjian Qi

Power System Modeling, Control, and Resilience with Power Electronics Interfaced Renewable Generation

Dr. Timothy Hansen

Timothy M. Hansen (IEEE Senior Member 2020) received the B.S. degree in computer engineering with high honors from the Milwaukee School of Engineering, Milwaukee, WI, USA, in 2011, and the Ph.D. degree in electrical engineering from Colorado State University, Fort Collins, CO, USA, in 2015. He is currently an Associate Professor with the Electrical Engineering and Computer Science Department, South Dakota State University, Brookings, SD, USA. His research interests are in the application of optimization, high-performance/edge computing, and electricity markets to the areas of sustainable power and energy systems, low-inertia power systems, smart cities, and cyber-physical-social systems.

The SDSU Microgrid Laboratory and Power and Energy program have undergone transformational changes in the last few years. Current PowerJacks’ faculty will first describe the state of the undergraduate and graduate program focused on electric power systems at SDSU, including a description of the new capabilities of the research and teaching capabilities of the laboratory.

Prof. Tim Hansen will then discuss recent advancements in dynamic modeling of power systems with a large penetration of power electronic converter (PEC) interfaced energy sources. Data-driven methods will be shown for model extraction of commercial-off-the-shelf smart inverters implementing the IEEE 1547-2019 standard using Microgrid Laboratory equipment. The data-driven models can be used to study and mitigate voltage and frequency stability issues caused by the integration of PEC-based resources in the electric power grid.

Finally, the newest PowerJacks’ faculty, Prof. Junjian Qi, will end the keynote presentation with an overview of his research background in the area of power system resilience and control: cascading failure analysis and mitigation based on real utility outage data, application-level cyber-physical system security, and advanced inverter and microgrid control for integration of power electronics interfaced renewable generation.

Dr. Junjian Qi

Dr. Junjian Qi (IEEE Senior Member 2017) received his Ph.D. degree in Electrical Engineering from Tsinghua University, Beijing, China in 2013. He was a Research Associate with University of Tennessee, Knoxville in 2013-2015, a Postdoctoral Appointee with Argonne National Laboratory in 2015-2017, an Assistant Professor with University of Central Florida in 2017-2020, and an Assistant Professor with Stevens Institute of Technology in 2020-2023. He is currently the Hohbach Endowed Assistant Professor with the Department of Electrical Engineering and Computer Science at South Dakota State University. His research interests include cascading blackouts, microgrid control, cyber-physical system security, and synchrophasors. Dr. Qi was the recipient of the NSF CAREER award in 2020. He also received the IEEE PES Technical Committee Working Group Recognition Award for Outstanding Technical Report, the 2021 Best Paper Award from IEEE Transactions on Power Systems, and Best Paper Awards from IEEE PES General Meeting and IEEE PES ISGT Asia.

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    09 July 2024 - The Makati Business Club would like to share that the Department of Energy (DOE) released a revised and updated version of the Philippine Energy Plan (PEP).The current version now covers 2023 to 2050. According to the revised PEP, the Philippines is poised to achieve a renewable energy (RE) share of over 40% in the total energy mix by 2030 and to surpass 50% by 2040.

  16. Operating models for new energy companies

    2. The first factor to consider is the steering model of the new business. In addition, incumbents need to decide what level of control the core business will have over the new energy business, and which part of the business sets the strategy and targets for the new venture. Capital allocation needs to be considered as does the talent approach.

  17. PLN's New 2021

    Source: PLN's RUPTL 2021-2030. The intention of this planned growth is to achieve: 1. a mixed energy target for renewable energy of 23% by 2025 (which, in fact, is the same target as the 2019 - 2028 RUPTL) 2. Indonesia's goal of reducing greenhouse gas emissions by 29% by 2030 3. net zero emission by 2060 PLN uses two scenarios in the new RUPTL ...

  18. How We're Moving to Net-Zero by 2050

    April 19, 2021. Energy.gov. How We're Moving to Net-Zero by 2050. There's no greater challenge facing our nation and our planet than the climate crisis—and the writing on the wall is that in order to avoid its worst effects, we need to do everything we can to achieve President Biden's goal of net-zero carbon emissions by 2050.

  19. PDF James Madison University: Business Plan and Wind ...

    3. Business Plan 3.1 Business Overview 3.1.1 The Company and the Concept: For decades, homeowners have not been able to gain access to renewable energy because of high up-front costs, extremely long payback periods, and most renewable applications are only viable through the utilization of grants and tax incentives.

  20. It will take an industrial revolution to meet renewable targets and

    The foundation of the SA Renewable Energy Master Plan (Sarem) rests on four core pillars: enhancing local capacities, fostering inclusive development, advancing industrial growth, and stimulating ...

  21. Ramokgopa commits to aggressive pursuit of renewable energy

    The newly reconfigured ministry of electricity and energy will aggressively pursue procurement of renewable energy as part of ... plan is expected to be released later in 2024 after the March ...

  22. Analysis: A strong start, but Starmer government's clean-energy plan

    Energy costs are a factor in the £1 million a day losses Tata says it's racking up. British Steel, owned by Chinese Group Yingye, is also moving to electric arc furnaces, which will be running ...

  23. Hydrogen highways: Government gears up for nationwide fuel network plan

    A crucial aspect of the plan is determining the appropriate storage pressure for hydrogen, ranging from 350 to 700 bar. High-pressure storage is essential for maximizing efficiency and safety, but ...

  24. 2024 CPSS Conference / Banquet

    This year's banquet will be held on Monday, September 30, 2024, at McCrory Gardens in Brookings.Register NowProgram5:30 p.m. - Social6 p.m. - Banquet6:45 p.m. - Presentation of the CPSS Scholarship - Presentation of Wayne E. Knabach Excellence in Power Award7 p.m.- Keynote PresentationExcellence in Power AwardeeRobert H. SchultePrincipal, Schulte Associates LLCManaging Member, Power from the ...

  25. UK's Reeves to Unveil Labour's Growth Plan in First Speech

    Rachel Reeves will lay out the new Labour government's plans to spur private investment in her first major speech as Chancellor of the Exchequer on Monday, as the party tries to ride the ...