The electric vehicle company has a unique selection process that goes beyond cost and capacity for new energy projects.
October 12, 2023
Rivian, the Californian electric truck and SUV manufacturer, just signed its largest contract yet to buy renewable energy as a means of working toward its net-zero emissions commitment.
The 100-megawatt deal, disclosed in July after months of evaluations, is notable not just for its size but also for its location in rural Kentucky atop the former site of one of the largest coal mines in Appalachia. It's a massive infrastructure project with an estimated price tag of $1 billion, although Rivian’s exact financial commitment is undisclosed. The company’s motivation to support renewable energy in the state is easier to see: Earlier this year, Rivian said it planned to build a remanufacturing site in Bullitt County, potentially creating 218 jobs.
Rivian will be the largest corporate customer for the first phase of the new solar project, scheduled to be switched on in 2027. That tranche will have a capacity of 210 megawatts, but the Starfire Renewable Energy Center will eventually add 810 megawatts of electricity to the local grid. That’s enough to power 170,000 households annually, and it would be the largest renewable project to date for Kentucky. The farm will require a 20-mile-long transmission line that connects to the regional electrical grid.
The power purchase agreement was motivated by Rivian’s goal of operating with net-zero carbon emissions by 2040. The EV company is investing in both solar and wind projects to reach that target. It also wants to add low-carbon electricity to local grids that are currently still dominated by fossil-fuel sources.
Rivian isn’t just concerned with its own operations; its executives want to ensure EV owners have access to renewable power that can be used to charge Rivian’s cars and trucks as they travel. To that end, Rivian previously signed contracts with a solar plant in Tennessee and a wind farm in Illinois. This latest project should be able to power up to 450 million miles of "renewable driving" annually, Rivian said.
"It’s critical that we work to transition the grid and the system as a whole, so that customers that are charging from the grid are able to use clean energy," said Andrew Peterman, director of renewable energy at Rivian.
Look beyond megawatts to evaluate deals
Rivian’s energy buyers have a unique approach for project selection that requires them to actively consider criteria that go beyond a power plant’s generating capacity.
The company developed this approach in collaboration with The Nature Conservancy. It published a detailed discussion of the principles in a case study about its procurement process so other companies can borrow them.
These are the main considerations:
- Climate: The key metric Rivian uses is a power plant’s "emissionality," a reference to the reduction in carbon achieved by any new project. Building in places with a lower penetration of renewables can increase the impact of a project, Peterman said. Emissionality "is not a binary concept; rather, it can vary depending on the specific circumstances of a project and the nature of the support provided," the company said in its case study. "For example, increasing the capacity or efficiency of an existing project may be a more cost-effective path to reduce emissions than supporting the development of a new project."
- Conservation: Rivian encourages energy buyers to consider whether an installation will negatively drive habitat conversion. In Virginia, for example, solar farms have been the biggest cause of deforestation since 2016. Better instead to seek landfills, industrial brownfields or mines such as the Starfire site, Peterman said. "Leaving this ground at rest is critical as we introduce ground cover," added Ron Kiecana, chief development officer of renewable power producer BrightNight, referring to the restoration plan for Starfire. "This will be a very green improvement over the current rocky landscape." BrightNight will construct the Starfire facility.
- Community: Energy buyers at Rivian also look at job creation, economic opportunities, public health and the "energy justice" benefits of new projects. In its case study, Rivian suggests formalizing long-term obligations to local residents through contracts such as Co