LevelTen Energy Signs Deal With Starbucks And Raises $20.5 Million

By Amit Chowdhry ● June 8, 2019
  • Seattle-based LevelTen Energy announced it closed a three-project renewable energy portfolio purchased by Starbucks
  • LevelTen Energy also raised $20.5 million in Series B led by Prelude Ventures

Seattle-based LevelTen Energy recently announced a couple of major milestones. The company announced it signed a deal with Starbucks and it raised $20.5 million in Series B funding. LevelTen is a renewable energy procurement platform company that is able to reduce the cost, complexity, and risk of renewable energy power purchase agreements through analytics and process best practices.

Starbucks Deal

LevelTen Energy closed a three-project renewable energy portfolio purchased by Starbucks — which comprises of wind and solar farms in North Carolina, Oklahoma, and Texas. And these projects are from the developers ALLETE Clean Energy, Apex Clean Energy, BayWa r.e., and Cypress Creek Renewables.

Starbucks was able to utilize LevelTen’s two-sided market aggregates for PPA buyers and sellers, enabling parties to connect and transact in an efficient manner.

This portfolio is custom-built for Starbucks using LevelTen Energy’s technology-enabled procurement platform, aggregating three strategically located power purchase agreements (PPAs), each with nearly identical terms from three distinct developers. This portfolio transaction involving a corporate buyer simultaneously procuring a fraction of the power generated by multiple new projects is considered unprecedented.

The PPA portfolio is going to provide clean power to the electricity grids that serve over 3,000 U.S. Starbucks stores and communities by 2021 once all three projects are online. This project also pushes Starbucks’ goal of driving innovation in the energy sector.

“The Starbucks portfolio PPA demonstrates the promise of new renewable energy purchasing models,” said LevelTen Energy founder and CEO Bryce Smith in a statement. “Starbucks is setting an important precedent in the corporate energy procurement space by demonstrating how a single off-taker can safely and easily procure shares of renewable energy from a variety new wind and solar projects. This approach enables many more corporate and institutional buyers to support, in a fiscally responsible way, the massive buildout of new clean energy projects across the globe.”

The portfolio incorporates 146 total MW from three new renewable energy projects including 50 MW of wind power from an ALLETE Clean Energy project in the SPP market (acquired from Apex Clean Energy), 50 MW of solar power from a Cypress Creek Renewables project in the ERCOT market, and 46 MW of solar power from a BayWa r.e. project in the PJM market.

“As we continue to strive towards building and operating the world’s largest green retail business, we know we need to find innovative business models to achieve our renewable energy goals,” added Starbucks energy manager Patrick Leonard. “Not only does this portfolio model allow us to support new solar and wind farms that will deliver the clean energy equivalent to the electricity powering over 3,000 stores, it also opens the door for many new buyers to cost-effectively source smaller amounts of renewable energy.”

The Starbucks portfolio was set up with LevelTen Energy’s Dynamic Matching Engine, which is software that analyzes massive data sets on clean energy projects under development. And this technology along with the expertise of LevelTen’s team identifies optimal available project combinations for individual corporate buyers. Then companies can executive PPA contracts individually and independently of other corporate buyers. Or they can partner with other buyers.

“The wind power developed by Apex represents the largest wind PPA transacted to-date by Starbucks, delivering over 180,000 megawatt-hours, annually,” noted Apex Clean Energy chief commercial officer Steve Vavrik. “We are proud to partner with Starbucks and LevelTen Energy at Diamond Spring Wind, one of several Apex projects this year that will help corporations meet their future clean energy goals. The Old Settler Wind project in Texas, owned by Apex and Northleaf Capital Partners, will also provide over 1.5 million RECs to help Starbucks reach its RE 100 goal until commercial operations at Diamond Spring begin in 2021.”

Along with having attractive and market-leading characteristics like economic competitiveness and low development risk, the three projects were carefully selected to optimize performance of the whole portfolio. The collaboration between the developers and LevelTen through data sharing is going to enable Starbucks to monitor its renewable energy generation, track portfolio performance, and streamline contract management.

“Starbucks is rethinking the future of retail with their new, innovative ‘Greener Stores’ framework and BayWa r.e. is delighted to support this effort with our partners at LevelTen,” BayWa r.e. Solar Projects LLC CEO Jam Attari commented. “By contracting a significant portion of the energy from our Fern Solar project, Starbucks will make progress in their commitments while also allowing buyers with different energy needs to access cost-competitive energy. This project continues BayWa r.e.’s significant contributions to economic and local community growth in the region.”

$20.5 Million In Series B

LevelTen Energy also recently announced it raised $20.5 million in Series B funding led by Prelude Ventures. Constellation Technology Ventures, (venture investing arm of Exelon Corporation), Equinor Energy Ventures, Total Ventures and existing investors Avista Development, Element 8 Fund, Founders’ Co-op, Techstars Ventures, and Wireframe Ventures also participated. Including this round of funding, LevelTen has raised a total of $27.3 million. In conjunction with the funding round, Prelude managing director Tim Woodward is joining the board.

Founded in 2016, LevelTen Energy participated in the Techstars startup accelerator. Last year, LevelTen Energy launched the LevelTen Marketplace for providing rich data and deep analytics on nearly every utility-scale clean energy project under development in North America. And later in 2018, LevelTen unveiled the LevelTen’s RFP Automation Tool and Dynamic Matching Engine.

So far, LevelTen procured over $1 billion of renewable energy through the LevelTen Energy platform. And LevelTen also facilitated groundbreaking procurement deals with Bloomberg, Cox Enterprises, Gap Inc., Salesforce, and Workday.

With this round of funding, LevelTen Energy is going to expand its suite of products and services in North America and Europe thus further reducing the barriers that impede widespread renewable energy procurement. Plus the company will also open its platform to new types of channel partners and service providers, making the whole procurement process faster and easier for energy buyer participants. To support the expansion, LevelTen is going to grow its team in North America and Europe.

“LevelTen gained market traction and product validation in 2018 and we are very excited to increase our ownership stake by leading the Series B financing,” Woodward pointed out. “We think this will become an essential tool for corporate and industrial procurement of renewable energy and that is a market that is growing rapidly. The engagement in this round of several global energy partners should only further establish the LevelTen platform.”