by Rona Fried
We’ve written about the increasing amounts of renewable energy big corporations are using, but they would use much more if utilities made it easier for them to buy.
A dozen companies signed the Renewable Energy Buyers’ Principles, which ask utilities to do just that: Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart.
With a combined renewable energy target of 8.6 million megawatt-hours a year through 2020 (which would power nearly 800,000 homes a year), the companies are ready to make significant purchases.
"Some of America’s largest companies are embracing renewable energy, and their collective demand requires the market to keep pace," says Suzanne Apple, senior vice president for private sector engagement for World Wildlife Fund (WWF), which convened the group of companies with the World Resources Institute (WRI).
Currently, each company has to negotiate separately with utilities, to get the quantity of renewable energy they need at competitive prices. They have to deal with complicated contracts, complex negotiations and transaction costs.
Because of this companies often either build their own projects, sign long term contracts with developers – as Microsoft recently did – or buy the energy through a solar leasing arrangement. It would be much simpler if they could get the energy directly from their local utility. And clearly, utilities are missing out on what could be a strong, growing revenue stream.
Microsoft bought the entire output of a wind farm going up in Illinois:
Indeed, it’s a reciprocal relationship. MidAmerican Energy decided to add over 1 gigawatt of wind in Iowa, attracting Facebook and Google to build data centers there, which will consume over half of that.
Because of Google, Duke Energy is developing a program where large customers can buy renewable energy from local projects, a model Google wants to also see elsewhere.
"In every other aspect of their business, companies are used to a competitive market for the commodities they buy," says Marty Spitzer, Director US Climate and Renewable Energy Policy for WWF.
"We know cost-competitive renewable energy exists but the problem is that it is way too difficult for most companies to buy," says Amy Hargroves, Director of Corporate Responsibility & Sustainability for Sprint. "Very few companies have the knowledge and resources to purchase renewable energy given today’s very limited and complex options. Our hope is that by identifying the commonalities among large buyers, the principles will catalyze market changes that will help make renewables more affordable and accessible for all companies."
Here’s what they want:
- Greater choice in procurement options
- More access to cost competitive options
- Longer- and variable-term contracts
- Access to new projects that reduce emissions beyond business as usual
- Streamlined third-party financing that includes standardized contracts and processes
The principles evolved from a collaboration between WWF and Rocky Mountain Institute to identify barriers to corporate achievement of renewable energy targets. They held a Corporate Renewable Energy Buyers Day in 2013 to prioritize potential solutions – resulting in Rocky Mountain Institute’s Renewables Resource Center and a partnership between WWF and WRI to develop Buyers’ Principles.
Here are the Buyers Principles: