WestRock’s First Virtual Power Purchase Agreement Project Reaches Commercialization

Rhea-AI Summary

WestRock (NYSE: WRK) has launched its first virtual power purchase agreement (VPPA) project, the Bernard Creek Solar, in partnership with ENGIE North America. Located in Wharton County, Texas, the 230 MW project aims to produce roughly 500,000 MWh annually. WestRock has contracted 207 MW from this project, contributing to its commitment to reduce greenhouse gas emissions by 27.5% by 2030. The project is expected to generate $45 million in revenue for the county and create over 250 jobs during construction. Additionally, WestRock's VPPA initiatives will add a total of 282 MW of renewable energy to the Texas grid.

Positive

• WestRock's Bernard Creek Solar project is expected to produce approximately 500,000 MWh annually.
• The project will generate over $45 million in revenue for Wharton County.
• More than 250 jobs will be created during the construction phase.
• WestRock's VPPA initiatives will add a total of 282 MW of renewable energy to the Texas energy grid.
• The project supports WestRock's goal to reduce greenhouse gas emissions by 27.5% by 2030.
• ENGIE North America has surpassed 1 GW of signed power purchase agreements in the U.S. for 2022-2023.

Negative

• None identified in the press release.

Financial Analyst

WestRock's involvement in the Bernard Creek solar project, underpinned by a virtual power purchase agreement (VPPA), signifies a strategic move towards sustainability. For investors, this project not only aligns with environmental goals but also offers economic potential. The 207 MW contracted capacity contributes substantially to the company's long-term energy cost management. Additionally, the creation of $45 million in county revenue and over 250 jobs during construction indicates tangible economic benefits, which can be positive for local community relations and company reputation. However, investors must note that the financial performance of VPPAs can be influenced by market prices of energy, which may fluctuate due to various factors, such as regulatory changes and energy demand-supply dynamics. It's essential to monitor how these projects impact WestRock's profit margins in upcoming financial reports.

Environmental Analyst

WestRock's commitment to reducing its greenhouse gas emissions by 27.5% by 2030 through projects like Bernard Creek Solar is a commendable step towards sustainability. The agreement with ENGIE to introduce 282 MW of renewable energy to the Texas grid is substantial, addressing both corporate responsibility and environmental regulations. This move enhances WestRock's image among environmentally conscious consumers and investors. Furthermore, the shift towards renewable energy sources might also offer long-term cost savings and stability against volatile fossil fuel prices. However, it's essential to evaluate the risks associated with transitioning to renewable energy, such as the initial investment costs and the reliability of solar power generation, which can be variable and dependent on weather conditions.

Market Research Analyst

The collaboration between WestRock, ENGIE and Schneider Electric underscores the increasing trend of corporations engaging in VPPAs to meet sustainability goals. For retail investors, it's important to recognize that this positions WestRock within the growing niche market of renewable energy. According to BloombergNEF, ENGIE's prominence in the PPA market indicates strong execution capability, which bodes well for the project's success. As renewable energy becomes a larger segment of the market, companies like WestRock, which actively participate in sustainable initiatives, might gain competitive advantages and improved market sentiments. Yet, investors should remain vigilant about potential regulatory changes and technological advancements that could affect the renewable energy landscape and consequently, WestRock's investment attractiveness.

• Texas-based solar project propels WestRock’s pursuit of its science-based targets to reduce greenhouse gas emissions
• Project demonstrates the company’s strategic approach to support clean, renewable energy and economic development

ATLANTA--(BUSINESS WIRE)-- WestRock (NYSE:WRK), a leading provider of sustainable fiber-based paper and packaging solutions, is making progress toward its science-based greenhouse gas targets by supporting the first of two Texas-based solar projects. WestRock set the stage by entering into virtual power purchase agreements (VPPAs) with ENGIE North America (ENGIE), a subsidiary of ENGIE S.A. and global leader in the net zero energy transition.

Bernard Creek Solar, LLC, the first of two solar projects that are part of the VPPAs between WestRock and ENGIE, is now live and operating in Wharton County southwest of Houston. Under the VPPA, WestRock contracted 207 MW from the project. The 230 MW Bernard Creek solar project is on track to produce approximately 500,000 MWh annually, generating over $45 million in revenue for the county and creating more than 250 jobs during construction.

The WestRock VPPA for the Bernard Creek project, combined with a similar project located in Bell County, will add a total of 282 megawatts (MW) of renewable energy to the Texas energy grid.

"We are pleased to play a role in the production of clean energy from large-scale solar projects and to join forces with ENGIE and Schneider Electric to reduce greenhouse gas emissions by adding more renewable energy to the grid,” said David B. Sewell, president and chief executive officer at WestRock.

Dave Carroll, chief renewables officer at ENGIE North America, remarked, "We are delighted that Bernard Creek Solar is supporting WestRock’s ambitions to meet its 2030 science-based targets. ENGIE’s projects are focused on meeting the specific needs of our clients as we work together to accelerate the energy transition in North America, and this agreement reflects that."

The VPPAs with WestRock have contributed to ENGIE surpassing more than 1 gigawatt (GW) of signed power purchase agreements (PPAs) in the U.S. for 2022-2023. According to BloombergNEF's latest Market Outlook report, ENGIE has been recognized as the top developer to sell corporate energy PPAs and has ranked in the top three since 2019, with a total corporate PPA portfolio in the USA of 7.3 GW.

This initiative is one example of the actions WestRock is taking to achieve a validated science-based target to reduce its greenhouse gas emissions 27.5% by 2030. Schneider Electric’s Sustainability Business provided advisory services and strategy management to WestRock for these pivotal VPPAs.

John Powers, vice president of Global Renewable Energy and Carbon Advisory at Schneider Electric, highlighted the positive impact of such initiatives, stating, "Through projects such as Bernard Creek Solar, innovative companies like ENGIE and WestRock are promoting clean energy to the grid, while contributing to local communities through economic development, new job opportunities, and a commitment to more sustainable solutions."

For more information about WestRock, visit www.westrock.com.

About WestRock

WestRock (NYSE: WRK) is a global leader in sustainable paper and packaging solutions, with more than 50,000 teammates in the Americas, Europe and Asia-Pacific. The company’s integrated packaging capabilities offer end-to-end solutions to help customers address their greatest challenges.

About ENGIE North America

Based in Houston, Texas, ENGIE North America Inc. is a regional hub of ENGIE (ENGI), a global leader in low-carbon energy and services. Together with 101,500 employees around the globe and ENGIE customers, partners and stakeholders, ENGIE is committed to accelerate the transition toward a carbon-neutral world, through reduced energy consumption and more environmentally friendly solutions.

About Schneider Electric

Schneider’s purpose is to empower all to make the most of our energy and resources, bridging progress and sustainability. Schneider drives digital transformation by integrating world-leading process and energy technologies, end-point to cloud connecting products, controls, software and services, across the entire lifecycle.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240604447350/en/

WestRock

Robby Johnson, Senior Manager, Corporate Communications

robby.b.johnson@westrock.com

Schneider Electric

Shannonlappin.davies@se.com

ENGIE North America

Michael Clingan, Press Relations

Michael.clingan@external.engie.com

Source: WestRock Company

FAQ

What is the goal of WestRock's Bernard Creek Solar project?

The goal is to produce approximately 500,000 MWh annually and support WestRock's science-based greenhouse gas reduction targets.

How much renewable energy will WestRock's VPPA initiatives add to the Texas grid?

WestRock's VPPA initiatives will add a total of 282 MW of renewable energy to the Texas grid.

How many jobs will the Bernard Creek Solar project create?

The Bernard Creek Solar project will create over 250 jobs during its construction phase.

What revenue is expected from the Bernard Creek Solar project?

The project is expected to generate over $45 million in revenue for Wharton County.

What are WestRock's greenhouse gas reduction targets?

WestRock aims to reduce its greenhouse gas emissions by 27.5% by 2030.