More major companies expect 100% renewable energy options, and some are pushing for broader changes in power markets
By Joe Smyth | email@example.com | @joesmyth
At the Global Climate Action Summit last week, twenty-one major technology companies announced the Step Up Declaration, which aims to boost the impact of corporate sustainability efforts by leveraging the companies’ various avenues of influence. The declaration notes:
We look beyond our four walls to activate supply chains, influence political and regulatory mechanisms, push each other as peers, partners and competitors and enable and inspire our customers.
The companies supporting the Step Up Declaration play a growing role in the economy, and claim to represent over $750 billion in combined market capitalization: Akamai Technologies, Arm, Autodesk, Bloomberg, BT, Cisco Systems, Ericsson, HP, Hewlett Packard Enterprise, Lyft, Nokia, Salesforce, Supermicro, Symantec, Tech Mahindra, Uber, Vigilent, VMware, WeWork, Workday, and Zoox.
The largest technology companies have also made clear their preferences for renewable energy, and those are now the largest companies in the world:
The five largest publicly-traded companies in the world — Apple, Amazon, Google’s Alphabet, Microsoft and Facebook — all have corporate commitments to use 100 percent renewable energy and at least three of them have already hit those ambitious targets.
The technology sector remains the largest purchaser of renewable energy, but major companies in other sectors have also made 100% renewable energy commitments, including Coca-Cola, Nike, Anheuser-Busch, General Motors, and Walmart - a total of 144 companies so far. And the impacts of those corporate renewable energy commitments are growing quickly, according to a Bloomberg New Energy Finance report last month, which found that “corporations have already purchased 7.2GW of clean energy globally in 2018 through July, shattering the previous record of 5.4GW for the whole of 2017.”
The Bloomberg New Energy Finance report also analyzes what those corporate renewable energy commitments will mean over the next the decade - a lot more wind and solar projects, and an “increasing impact on power market design around the world.”
Bloomberg NEF forecasts that the current 140 signatories of the RE100 (a pledge to offset 100% of electricity demand with renewables) will need to purchase an additional 197TWh of clean energy in 2030 to reach their targets. Were this shortfall to be met with long-term contracts for new solar and wind projects, it would lead to an additional 100GW of build – for context, this is slightly larger than California’s entire electricity grid today.
Meanwhile, the number of companies signed up to the RE100 continues to grow. As more multi-nationals establish renewables targets, we expect corporations to have an increasing impact on power market design around the world, opening up new avenues for companies to purchase clean energy.
Indeed, those August 2018 estimates are likely already an underestimate, as more major companies such as Sony and Lyft announced 100% renewable energy commitments in the lead up to the climate summit.
Companies like Salesforce seek cleaner grids for their data centers and offices
The ways in which corporate renewable energy commitments end up impacting power markets will depend in part on how electric utilities respond to these demands from their major customers. To get a sense of the options, let’s look at how one major company explains how it seeks to meet its renewable energy commitment.
Salesforce, the customer relationship management company based in San Francisco, helped launch the Step Up Declaration and also announced new commitments at the climate summit that expand on its commitment to power its operations with 100% renewable energy by 2022. Like other companies with operations around the United States and globally, Salesforce pursues a variety of strategies to meet its renewable energy commitments. As the company explains in a document outlining its clean energy strategy, Salesforce pursues a variety of approaches that depend on the options available in the regions in which its offices and data centers are located, including power purchase agreements, virtual power purchase agreements, purchasing carbon credits, and renewable energy tariffs.
For example, Salesforce sources 100% renewable energy through the San Francisco Public Utility Commission's CleanPowerSF program for its global headquarters at the Salesforce Tower in downtown San Francisco. But many utilities don’t offer renewable energy purchasing programs, as Salesforce notes in its clean energy strategy document:
Utilities and retail electricity providers are well positioned to offer renewable energy solutions to companies looking to speed the transition to clean energy. Unfortunately, few of these renewable energy tariffs exist today. With new options coming online every year, Salesforce is actively engaging with utilities and retail electricity partners to identify available renewable energy solutions.
So for its facilities in regions where utilities don’t offer renewable energy tariff programs, Salesforce pursues other options such as virtual power purchase agreements. Last month the company announced an 80 megawatt virtual power purchase agreement from a wind farm in Illinois, adding to similar deals that the company has made in West Virginia and Texas.
Those virtual power purchase agreements for new renewable energy projects aim to offset the emissions from electricity used by Salesforce facilities. So the amount that Salesforce needs to offset depends on how polluting the electricity is that power its facilities - if Salesforce leases a data center in a region powered mostly by coal, it will need to pay for more new renewable energy than if it leases a data center in a region that uses cleaner electricity. That’s one of the reasons why, as its clean energy strategy document explains, “Salesforce works to locate offices and data centers on cleaner grids, with strong government policies to further reduce greenhouse gas emissions.”
As more major companies seek cleaner power for their operations, utilities will need to provide more renewable energy options or risk losing out on major new customers.
Bloomberg New Energy Finance: Corporations Already Purchased Record Clean Energy Volumes in 2018, and It’s Not an Anomaly
Deloitte Insights: Solar and wind move from mainstream to preferred
Step Up Declaration
Salesforce Clean Energy Strategy
Companies 100% renewable energy goals are getting results in Colorado
Next PUC Commissioner John Gavan "consensus choice" of Governors Hickenlooper and Polis
Tri-State policy change discourages battery projects in rural Colorado and New Mexico
Colorado Public Utilities Commission orders Tri-State to "satisfy or answer" exit charge complaint from Delta Montrose Electric
United Power seeks solutions to "increasingly outmoded G&T business models"
Clean Energy Means Business Summit highlights renewable energy opportunities and challenges in rural Colorado
Governor-elect Jared Polis says moving Colorado toward more renewable energy will be a top priority
Electric cooperative officials discuss cheap renewable energy and an “eroding monopoly”
Delta Montrose Electric members vote for new financing options, supporting a potential buyout of Tri-State contract
Poudre Valley Electric requests Tri-State policy changes and fuel mix study
Holy Cross Energy plans to shift away from coal, aiming for 70% renewable energy
What do corporate renewable energy commitments mean for electric utilities?
Colorado Energy Plan approval will mean new renewable energy investments in rural Colorado
Report: Tri-State could save $600 million by shifting from coal to renewable energy
Delta Montrose Electric seeks new financing options to end contract with Tri-State
Wind energy jobs in rural Colorado attract bipartisan support
Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue
Poudre Valley Electric and Xcel Energy Colorado President win national awards from Smart Electric Power Alliance
Latest coal plant subsidy proposal could hit electricity bills in the West
Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks
Senator Heinrich highlights “frustrations in New Mexico” with Tri-State’s limits on local solar
Moody’s report shows Tri-State’s coal plants are more expensive than new renewable energy
Tri-State’s limits on local energy development are a growing problem for co-op members
Governor Hickenlooper discusses Tri-State at the Climate Leadership Conference
Bids for Xcel’s Colorado Energy Plan include a proposal for the world’s largest battery
New wind and solar power in Colorado is now cheaper than existing coal plants
Companies' 100% renewable energy goals are getting results in Colorado
What does cheap solar mean for electric cooperatives?
Colorado towns and cities are helping push utilities to embrace renewable energy
How are electric cooperatives navigating the transition from coal to cheap clean energy?
Blocked from building more solar projects, United Power shifts to community batteries
Economic reality sets in for Tri-State efforts to expand the Holcomb coal plant
Solar projects in the works in Grand and Jackson counties
Mountain Parks Electric grapples with solar