Deloitte: A Simple Guide to Renewable Energy Procurement

As organisations increase efforts to cut emissions, renewable energy procurement takes centre stage as more than a sustainability checkbox.

Deloitte positions this not only as an operational decision but as one with long-term strategic value.

A well-planned renewables strategy, closely linked to operational demands and emissions targets, builds competitive advantage and strengthens stakeholder confidence.

Procurement teams facing mounting sustainability targets now find themselves navigating a fast-evolving energy landscape.

With the global drive towards decarbonisation gaining speed, the importance of securing renewable energy supplies has never been greater.

Deloitte lays out five insights to help firms understand this landscape and five actions they can take to secure long-term value from their energy procurement strategies.

What to Know About Renewable Energy Procurement

Deloitte begins with five core insights to guide procurement leaders.

The first is that decarbonisation pressures are increasing demand for low-carbon solutions across sectors. By the end of 2021, global procurement through power purchase agreements (PPAs) reached 109 gigawatts (GW), a measure of the growing appetite for clean energy among organisations seeking to hit emissions goals.

Second, the emergence of new funding and incentive mechanisms is helping to support the renewable transition. In the US, legislation such as the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) offers incentives and financial backing for clean electricity production and upgrades to grid infrastructure. These measures support both producers and buyers of renewable power by encouraging investment and reducing the overall cost of transition.

The third insight identifies Virtual Power Purchase Agreements (VPPAs) as a leading procurement model. VPPAs allow buyers to enter flexible, long-term contracts for renewable electricity, without needing to make direct capital investments. In the US, VPPAs made up 12 GW of the total 17 GW in PPA transactions during 2021. Because they are not tied to local regulatory frameworks, VPPAs provide a versatile route to sourcing renewables, helping buyers to meet sustainability targets efficiently.

The fourth point stresses the importance of understanding the specific risks and benefits linked to each procurement pathway. Organisations need a clear vision of their energy goals before deciding how best to meet them. Without this clarity, procurement strategies risk falling short of delivering either value or emissions reductions.

Lastly, Deloitte underscores the influence of tax and accounting frameworks in the procurement process. These considerations affect how value is realised and how renewable procurement strategies are structured for success.

Actions Procurement Leaders Can Take Now

To turn these insights into action, Deloitte recommends five steps for businesses.

The first is to develop or reassess their renewable energy strategy. This involves taking stock of existing actions toward climate targets and reviewing ESG reporting processes. Ensuring emissions reduction efforts are measurable and visible is key.

Second, procurement teams should identify all incentives available for climate-related projects. Staying informed about relevant legislation allows organisations to take full advantage of available support. Appointing an internal representative or consulting a subject-matter expert helps ensure tax credits and funding opportunities are not missed.

Third, evaluating both current and future electricity needs is essential. This means taking into account market trends, operational demands and the costs associated with each procurement option. A detailed assessment of these factors allows organisations to make informed, realistic decisions.

The fourth step is to define top organisational priorities. Once these are clear, they should be compared to available procurement models. Key aspects such as life cycle costs, pricing fluctuations and contract terms should be mapped against internal needs to find the most suitable fit.

Finally, Deloitte advises organisations to consult tax and accounting experts when finalising procurement strategies. These experts can highlight potential risks and support the design of procurement plans that balance cost, compliance and sustainability outcomes.

Aligning Strategy With Value and Compliance

With energy procurement playing an increasingly strategic role, procurement leaders are no longer focused solely on cost or supply. They must weigh tax implications, policy shifts, corporate goals and public accountability. VPPAs, incentive schemes and policy changes shape a complex field where expert guidance is essential.

Deloitte’s five steps provide a route for procurement teams to build a structured, value-focused approach. This means not just selecting a green energy source, but integrating procurement into a broader emissions and sustainability framework.

As Deloitte states: "Before an organisation can decide which procurement pathways are best for them, they should have a clear and comprehensive vision of their renewable energy goals."

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