100% renewable energy: Corporations are making a huge investment in renewables
The Rocky Mountain Institute’s Business Renewables Center recently reported US corporate renewable energy procurement achieved a new record in 2018, with 3.57 gigawatts of announced clean energy projects so far this year. The previous record was 3.12 GW set in 2015. Kevin Haley, a program manager at the Business Renewables Center, answered some questions for CleanTechnica.
Corporate renewable energy procurements reached a new record in 2018. What is driving them?
The number one driver of these procurement deals we see are companies working to meet their sustainability goals. Companies are recognizing the importance of sustainability to their long-term business success. There are numerous benefits, including the protection of environmental assets important to their business, improved employee retention and company pride, and financial opportunities to hedge electricity spend using low-cost wind and solar power.
2018 has been a record year. Do you expect procurement to continue growing in the next three years?
In a word, yes. There are 140 companies who have committed to go 100% renewable under the RE100 pledge, and only about 70 companies who have done large-scale, offsite renewable energy transactions to date. That suggested there will plenty more deals to be done as companies work to meet their 2020 goals or milestones.
Is the increase in procurements spurring more renewable energy development?
Absolutely – most companies seek to build new renewable projects to meet their goals, as opposed to purchasing renewable energy certificates (RECs) or buying from existing projects. In 2017, for example, corporate renewables deals accounted for approximately 20% of new renewable energy build in the U.S.
What do you envision over the next 5-10 years for corporate procurements?
Aside from growth, we anticipate a broadening of the market as different kinds of companies are able to buy renewables. We’re especially excited for smaller businesses to get in on this market, potentially through aggregating their demand to collectively buy large projects. We also are seeing a diversification of sectors entering the market for renewables – this isn’t just a market for big tech companies; it’s also meeting the needs of manufacturing, retail and financial service companies.
What are some of the top corporate players in the procurements?
In terms of who has procured the most renewable energy, the top 10 companies buying in the U.S. are: Google, Facebook, Amazon, Apple, AT&T, Microsoft, Walmart, T-Mobile, General Motors, and IKEA. But there are many others who are leading by example as well – Fifth Third Bank went 100% renewable with a single 80 MW purchase that they’ve widely publicized as part of their company values. Intuit, the maker of TurboTax, is running an innovative program that offers clean energy to customers in Texas. And Akamai, a smaller technology company, is highly active in the corporate clean energy community, providing education and sharing experiences with their peers.
Are they all doing it for legitimate reasons, or is there any greenwashing involved?
These companies are largely working to legitimately meet their public sustainability commitments. Given that the contracts being signed are generally long-term and for newly constructed projects, it’s pretty difficult to engage in greenwashing though the purchase of large-scale, off-site renewables. And our Business Renewables Center program is designed to build up true understanding of renewables space, aimed at long-term market growth and transactions that truly benefit the corporate customer.
What is the breakdown in terms of solar vs. wind procurement?
See below, in terms of megawatts of announced capacity.
Is energy storage being included in some of procurement mixes?
Energy storage is very early stage for most corporate power purchase agreements (PPAs). Some more advanced buyers like Microsoft are certainly experimenting with the right application of storage in their procurement mix, however, and the market is excited about the prospects for storage going forward—especially as costs come down.
Are EV charging stations included in any of the procurements, or are they considered to be completely separate?
We aren’t aware of any bundled procurement contracts that include EV charging stations, but certainly some companies are looking at EVs and electrified transportation as part of their broader sustainability planning.
Are the procurements distributed evenly around the country or are they mostly in certain states like California?
Texas is a clear leader but deals are being done around the country and some companies want to co-locate their projects with their physical footprints.
Are there financial incentives like tax breaks for corporations that procure renewable energy?
There are no special incentives for corporates at this point, beyond what already exists for renewables more generally.
Are the procurements long-term, short-term or both?
Primarily long-term; generally at least 10 years and often 20 or more.
(Originally appeared at our sister-site, Cleantechnica. Image: Block Island Wind energy Farm via Deepwater Wind. Graphics: Rocky Mountain Institute.)