The adoption of renewable energy by corporations set another record last year, more than doubling 2017’s amount for renewable purchase agreements. According to Bloomberg New Energy Finance (BNEF), the capacity contracted globally by corporations in 2018 was 13.4 gigawatts. Power Purchase Agreements (PPAs) were contracted by 121 organizations across 21 countries with the United States leading the way with 8.5 gigawatts of renewable energy or 60% of the total contracted amount.
At this scale, corporations are now positioned “alongside utilities as the biggest buyers of clean energy globally.” Jonas Rooze, head of corporate sustainability for BNEF said, “Corporations have signed contracts to purchase over 32GW of clean power since 2008, an amount comparable to the generation capacity of the Netherlands, with 86% of this activity coming since 2015 and more than 40% in 2018 alone.”
This upward trend, which has been gaining momentum over the past decade, is good news for our planet, for our economy, and for the hundreds of thousands of people who work at these organizations. It is with certainty that we can now say corporations have solidly joined the ranks of cities as engines for sustainability.
A record number of corporations are going green in America and around the world.
The Rocky Mountain Institute reports that the installation of clean energy by corporations has doubled in the United States over the past three years. The number of new companies that began installing green energy systems to power their operations, such as solar and wind, for the first time also doubled during the same period.
These bold actions, when combined with other sustainability activities taken by cities across America, put our country at the forefront of new energy initiatives that are clean and affordable. For instance, in 2018 the city of Philadelphia signed a 70 MW solar agreement to provide over 20% percent of the electricity required by government buildings. An article by GreenBiz indicates that this deal “represents the largest solar installation in Pennsylvania — by sevenfold.”
“Can’t Wait for Public Policy”
The Rocky Mountain Institute article quotes Jules Kortenhorst, their CEO, as to what motivates companies to adopt green energy: “The record number of companies successfully pursuing renewable energy this year sends a clear signal that environmental sustainability is a serious priority for business leaders across the economy. These companies aren’t going to wait for public policy on climate issues to catch up—they are taking the initiative to accelerate toward a prosperous, low-carbon economy.” A revealing chart of corporate buyers of renewable capacity by the Rocky Mountain Institute can be accessed here.
While there are many reasons compelling corporations around the country and the world to adopt clean energy, three trends stand clear. First, the price advantage of renewables has made them more attractive, especially for organizations that make buying decisions based on operating costs. In a recent blog post, we referred to a Forbes article that analyzed how coal has lost its cost advantage over clean energy and noted that coal is widely seen as the last obstacle to widespread adoption of renewables, based purely on economics.
The second trend to emerge is the rise of smaller corporate clean energy buyers using Power Purchase Agreements or PPAs. As BNEF reports, last year “some 34 new companies signed their first clean energy PPAs, making up 31% of total activity in the U.S. These firms are aggregating their electricity demand to reap the economies of scale from larger solar and wind projects.” Kyle Harrison, a corporate sustainability analyst for BNEF and lead author of the report, explained the benefits of this aggregation scheme: “The aggregation model has heralded in a new generation of corporate clean energy buyers. These companies no longer need to tackle the complexities of clean energy procurement alone. They can share risks associated with credit and energy market volatility with their peers.”
Another trend that we see for corporate adoption of renewables is demographics. As millennials gain more influence in corporate decision-making, they demand that the companies they work for be environmentally responsible. Comprising almost one-fourth of the U.S. population, millennials, as consumers, are also demanding the same commitment to sustainability from the brands they buy and use.
Green is the New Corporate Standard
From energy and telecommunications to retail and social media, the adoption of clean energy cuts across myriad industries. GreenBiz provides an interesting chart of the top U.S. buyers of clean energy last year, noting that ExxonMobil now ranks among the top five buyers of renewables along with Facebook, AT&T, Walmart, and Microsoft. They write, “Facebook contracted for more capacity than any other organization last year, with deals totaling 1.85 gigawatts, while also breaking all buyer cumulative annual procurement records since deals have been tracked.”
Another new entrant into corporate renewable purchases is Cargill, which “disclosed its first power purchase agreement for 50 MW of capacity of wind power from a project under construction by Geronimo Energy in South Dakota.” Cargill’s purchase agreement is part of their commitment to reduce greenhouse gas emissions by 10% by 2025 from their 2017 levels.
Smarter Energy to Power Corporations
As more organizations seek to power their operations sustainably, a smart mix of renewables will be required. The variability in solar and wind, for instance, can be covered by other clean and affordable energy sources such as Hydrogen 2.0, either on-site or through their local utility―the latter using a similar model as the one that New Brunswick Power will be implementing with Joi Scientific (read the press release here). All in all, we seem to be set for a new record-breaking trajectory as more companies adopt renewable energy around the country, and the world, for the right economic and environmental reasons.
Remembering a Friend
Three years ago, Joi Scientific lost a friend and charismatic leader, and the world lost a force for good. John Sheptor, our Chief Operating Officer and a driving force behind our “Village Quality of Life” initiative, passed away on March 7, 2016. John’s deep sense of empathy and social responsibility is what made him such a powerful force at Joi Scientific and the reason we deeply miss him.
In the 1980s, John was instrumental in organizing the incredibly effective distribution network for AIDS drugs in Africa. His work helped to save millions of lives by expanding distribution of medicine in 30 developing countries while driving down per-patient annual costs. You can read more about John Sheptor here.
As the Hydrogen 2.0 ecosystem gains momentum, we’ll be sharing our views and insights on the new Hydrogen 2.0 Economy. We also update our blog every week with insightful and current knowledge in this growing energy field.