Apple is in the energy business

[Energy Guy]

#1787 |

In the first week of June, Apple filed for permission with federal regulators to sell electricity to both the electric grid and to other consumers. They are creating an entity called Apple Energy to manage energy purchases and sales. Apple has the admirable goal of producing 100% of its corporate energy requirements from solar, wind, hydro and thermal sources, i.e., renewable sources. And the company uses a lot of energy! They not only have numerous facilities around the world, but also many electricity-hungry data centers. Since their power production will be primarily from renewables like solar and wind, they will need to buy power at night, when the wind isn’t blowing, and when the sun isn’t shining. Hence, they need the ability to sell power into the grid when Mother Nature is cooperating, so filing with regulators for permission to do this makes good sense for Apple. In 2015, they say that 93 percent of their energy came from renewable sources and their goal is 100 percent. Go Tim Cook – you’re setting a great example!

[Energy Guy]

#1996

As follow-up to this post about Apple, federal energy regulators approved Apple’s application on 8/4/2016 to start selling electricity at wholesale market rates.

The cool part about this is that they can now play, or hedge, the markets. For example, if wholesale electricity prices are 14 cents per kilowatt-hour, and they can buy retail at 10 cents per kilowatt-hour, they can choose to sell at the higher price and buy at the lower retail price, and pocket the difference. And this pricing situation often happens, especially during heat spells, extreme cold snaps, or when a power plant unexpectedly goes offline. When there is a high demand for electricity and limited production, power providers are often willing to pay more than they sell for. Of course, they hope this only lasts for a short time!

Good for Apple! They are setting an example, using all renewable energy, that I’m sure will be followed by more large companies.

[Author]

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