Until recently it was only possible for corporations to produce renewable electricity through complex options like investment in on-site generation and Power Purchasing Agreements (PPA). With ECOHZ GO2 a much-easier-to-implement solution is available. With the announcement on the 29th of April, H&M was the first company to publicly announce that they embrace ECOHZ GO2 as part of their sustainability strategy.
So how does ECOHZ GO2 work?
First of all; ECOHZ GO2 is a renewable power product that proves renewable electricity consumption documented by Guarantees of Origin (GO). In addition GO2 combines the GO with a financing element. Specifically, our customers pay a premium on the GO price, which is applied to complete the financing of a new power project. Meaning that through buying GO2 our customers directly cause a new power plant to be built.
ECOHZ has launched a foundation which role is to manage the money raised through GO2. The ECOHZ Renewable Energy Foundation lends these funds to projects selected with our customers. The foundation will ensure total transparency and irrefutable verification through its partnership with PwC.
Let’s look at a specific example:
Power project “K2”, a small hydro power plant in Norway, has all the necessary permits, but the project owner has not succeeded to complete the financing, he lacks ca 8% of the total budget. A GO2 customer has selected K2 as the project they want their money to finance.
The Foundation lends the capital to the K2; following this top-financing loan, the bank approves the project. In doing so, the GO2 funds are leveraged with the bank loan and the project equity.
In the following six months, the project team will go into the detailed planning and engineering phase followed by 18 months construction period. According to the plan, the hydro power plant will supply power to the grid in Q1 2017. When K2 starts feeding electricity into the grid, Statnett, the Norwegian system operator, will issue GO from K2’s production, which the ECOHZ GO2 buyer has a right to purchase.
Over its projected 40 years life time K2 will produce more MWh than our customer consumed under the GO2 contract. In other words, through the simple and accessible mechanism the GO2 customer assures that for every MWh consumed at least a MWh of new power production is being created. Our customer becomes Energy Positive.
Upon completion, the K2 plant will gradually repay the top-financing loan to the ECOHZ Renewable Energy Foundation. The Foundation will relend the capital repaid from the K2 power plant to a new power plant project. Thus, the Foundation will accelerate the construction of renewable energy capacity in Europe through a multiplier effect on the lending base created by ECOHZ GO2.
So what is so unique about ECOHZ GO², this new and innovative solution for financing and developing new, renewable energy?
ECOHZ GO2 intersects the accessible “entry level” Guarantees of Origin (GO) documenting the origin of the power, and the highly complex and long-term commitments involved with Power Purchasing Agreements (PPA) or Direct Investment (DI).
With ECOHZ GO², ECOHZ provides a low risk solution available to corporations at low cost. A contract for ECOHZ GO² can be as short as one year and still assure that a new power plant will be built. It is an accessible solution, a compelling result oriented story without the inherent risks associated with the long-term commitment alternatives.
In short, ECOHZ GO²:
- Documents emissions reduction
- Contributes to developing new, renewable energy
- Shows thought leadership through improved environmental performance of your company
- Customizes a flexible renewable energy solution to suit your company’s needs.
If you find this compelling or have any questions related to GO2 or Energy Positive, drop me a note at firstname.lastname@example.org