In this series of blog posts, we will help you navigate the ways through which your company can bring new renewable energy online. We will explore how you can use your unique positioning to support new projects. At the end of the series, you will have a good understanding of RECs, PPAs, virtual PPAs, on-site renewables… and which of these solutions is best suited to your company; very often, it lies somewhere between RECs and a PPA.
Companies, large and small, are making or strengthening their renewable energy commitments. Through the REBA, over 60 companies have committed to transition to one-hundred-percent renewable energy. These companies have collectively set a goal of purchasing 60 gigawatts of new renewable energy by 2025.
The 100% goal is also held by RE100; an ever-growing consortium (currently 131 members) that includes such companies as General Motors, Unilever and eBay. Further, according to the Department of Energy (DOE), 59 of the Fortune100 companies had committed to greenhouse gas (GHG) emission reductions, renewable energy, or both by 2012.
Further still, smaller companies are stepping up as well. Collectively, the EPA’s 1,700 Green Power Partners (as of January) purchase more than 45 billion kWh of renewable power annually. To understand the scale, that is enough energy to power more than four million homes for a year—according to EIA.gov. The partners and their commitments range from a small condominium association in Massachusetts to large companies like Philips Lighting, at 100% and 89% renewable energy respectively. It is undeniable that there is growing momentum towards renewable energy; it is also clear that this is a sustainability trend in which even smaller-sized companies want to play an active role.
In tandem with the growing demand for renewable energy, there has been robust growth in renewable energy generation-capacity. According to the DOE, renewable electricity accounted for 64% of new electricity capacity additions in 2015; with wind and solar comprising 56% and 40% of renewable energy additions. Nonetheless, renewable electricity accounted for only 16.7% of total installed capacity in the U.S. (globally, 29.5%).
Despite the commendable progress, more action is needed to drive new renewable energy projects. According to DOE estimates, less than one percent of the United States’ potential wind energy—at 80-meter hub heights—has been installed. Given the untapped potential, and the overwhelming benefits of renewable energy, companies are pushing for new renewable energy projects. The push is made more urgent by the fact that the power sector accounted for 35% of the country’s energy-related CO2 emissions in 2015.
A look at wind energy reveals health, environmental, water use, and economic benefits. Wind energy helps avoid sulfur dioxide emissions thus promoting air quality and the underlying health benefits. All the GHG emissions associated with the life cycle of a wind plant (20+ years) are balanced out within the first four months. Lastly, while the power sector is the largest withdrawer of fresh water in the country; wind uses the least water of all electricity generating technologies. In fact, wind plants reduced power-sector water consumption by 36.5 billion gallons of water in 2013. The reduced water consumption is important, especially in drier areas. During the 2011 drought, some Texas fossil power plants could not operate because of cooling water shortages; during the same drought, wind plants operated reliably. Renewables provide a resilient source of energy.
To fully realize the potential of renewable energy, companies need to more strongly incentivize its production. Some approaches, like PPAs, have been quite effective at driving new renewables energy capacity; others however, need to offer better incentives/higher-premiums in order to drive new projects—as is the case with RECS.
In our next post, we will delve into the different options—inside your company’s toolkit—for driving new renewable energy projects.