Constellation and Southwire, a manufacturer of wire and cable, tools, components and assembled solutions, have entered into a long-term REC purchase agreement through which Southwire will match approximately 33% of its annual electricity use with RECs sourced from the Rayos del Sol solar project in Cameron County, Texas. Each REC represents the environmental attributes associated with one MWh of solar energy generated by the Rayos del Sol project and delivered onto the electricity grid.
As a result of Southwire’s long-term commitment, Constellation has entered into a separate agreement with co-owners of Rayos del Sol, 174 Power Global and TotalEnergies, to support a 72-MW expansion of the project. In 2020 Constellation signed a 108-MW agreement to supply three commercial customers via Rayos del Sol. Commercial operation for the expansion is expected by April 2022.
This commitment contributes to Southwire’s aggressive carbon zero goal to eliminate or offset all its scope 1 and 2 GHG emissions by 2025. Carbon dioxide emissions associated with Southwire’s energy use are expected to be reduced by more than 80,000 metric tons each year, the equivalent of removing more than 17,000 passenger vehicles from the road in one year, according to U.S. Environmental Protection Agency estimates.
“In July 2020, we announced our goal to eliminate or offset all greenhouse gas emissions from our operations, and since then, we’ve started to install visible signs of this commitment, including electric vehicle charging stations and solar panels at some of our facilities,” said Burt Fealing, EVP and general counsel, Southwire. “We are pleased to collaborate with Constellation — in addition to customers, suppliers and academic institutions — to further drive sustainability across our footprint and support the transition to a low-carbon economy. Although we can achieve a lot on our own, by working with others, we can make a broader, more sustainable impact.”
“This innovative product structure will enable Southwire to receive renewable energy certificates (RECs) created by Rayos del Sol at a known contract price without facing the hourly settlement price associated with virtual power purchase agreements,” said Mark Huston, president of Constellation’s National Retail Business. “We commend Southwire on its aggressive climate change goals and are proud to offer a clean energy solution to help them deliver on their genuine commitment to sustainability.”
Southwire will use an innovative renewable purchasing structure that builds off of another Constellation offering, Constellation Offsite Renewables (CORe) retail power product. Constellation’s CORe product enables the development of, and increases businesses’ access to, new-build renewable energy projects by removing the significant hurdles associated with traditional offsite PPAs. The structure employed for Southwire has similar benefits, but is not tied to a Constellation retail power agreement. This allows Southwire to efficiently address the needs of its decentralized locations, many of which are in fully regulated retail energy markets. Constellation’s approximately nine-year agreement with Southwire begins in April 2022.
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