Dropping Names — The Corporations Purchasing Renewable Power
Companies around the globe are buying more renewable power than ever — by statistically huge amounts. Wind and solar have become the big players, the VIPs of renewable energy, but geothermal and biomass fuels aren't slouching.
Today, we're going to look into who is buying what and how. We'll drop some big names and big numbers, so get excited! The world of energy is changing as we speak, and these are historic times.
Renewable Energy Deals: Big Buys Making News
New data from the research firm BloombergNEF says companies secured a record-breaking 23.7 gigawatts of renewables capacity in the past year regardless of the COVID-19 pandemic. Just imagine that 1 Gigawatt is equivalent to the following:
- 3.125 Million Photovoltaic (PV) Panels
- 412 Utility-Scale Wind Turbines
- 110 Million LEDs
- Roughly 1.3 Million Horses
- 2,000 Corvette Z06s
- 9,090 Nissan Leafs
23.7 gigawatts is a huge number, but also a big idea to wrap our minds around. How much energy is that? It's enough electricity to power your average American home for the next 2.4 million years at the standard 800 monthly watts we first-world-ers take for granted. It's also three million gigawatts more than corporations bought in 2019 and nearly twice the 13 million gigawatts secured in 2018.
Ownership of those 23.7 gigawatts spans across the globe. But organizations in the Americas hold the lion's share. And they're chomping at the bit to buy more. BloombergNEF's study suggests that most of the 2020 buys will lead to the rapid development of new renewables capacity.
- This possibly means a more robust, more reliable grid and storage capacity.
- We're talking about up-and-coming energy infrastructure and storage capacity that dwarfs our current abilities and would not have otherwise been built.
All good things take time. Also, we must remember BloombergNEF's analysis considers power purchase agreements. Onsite developments, which would boost the development tally to some extent, are excluded from the study. So are smaller private energy buys. I'm trying to give credit where it's due.
Meanwhile, we promised some name-dropping. Here you go.
Name Drop! Who's Buying Renewable Power?
Amazon was the most active company in the renewable energy game of 2020, with 35 deals totaling 5.1 gigawatts. Per Amazon's website, it's the world's largest corporate purchaser of green energy, working on a global scale, with wind and solar projects in Australia, France, Germany, Italy, South Africa, Sweden, and the UK.
- Communications giant Verizon and social media monster Facebook were also among the top five renewable power buyers.
- Semiconductor giant TSMC and big oil's Total are there, too.
Fast-forward to January 25, 2021, when a separate entity — REBA, the Renewable Energy Buyers Alliance — released a set of policy ideas they claim can "accelerate the transition to a zero-carbon power sector."
Who Is REBA?
Per the REBA website, it's an alliance of major clean energy buyers, energy providers, and service providers that team together to unlock the renewable energy marketplace for all nonresidential energy buyers. Their goal is a rapid transition to a cleaner/greener, prosperous, zero-carbon energy future.
Under the REBA umbrella yesterday, more than thirty other companies called for a bunch of steps to make renewable energy purchasing easier, such as:
- New transmission planning and federal incentives to fund that infrastructure
- Changes to wholesale power market designs that might better integrate clean power
- And federal funding to focus strictly on later-stage demonstration and early deployment of innovations in the private sector
Organizations involved in REBA that signed that statement include powerful entities like GM, Google, PepsiCo, McDonald's, and Microsoft. Plus Amazon and Facebook again!
Your next question is: "How does one get started buying renewable power?" The answer depends on the size of the buy. Let's start with a look at it from an individual consumer's perspective. Then we'll get into how the big dogs do it.
RECs: Renewable Energy from Seller to Buyer at the Individual Level
As an individual investor, you can buy Renewable Energy Certificates (RECs). In a nutshell, individuals or organizations can purchase megawatt-hours of cleanly created electricity. Once that energy is fed into the grid, the REC can be sold as an energy commodity. (For more details, read my overview on RECs here.)
These two groups especially prize RECs:
- Government contractors and sub-contractors who need to prove they're focusing on green energy in their production efforts to win contracts
- Other power generators who must obey state mandates to work towards or fund renewable power
Not every state is a compliance state, which means you might buy RECs from a generator in Iowa and sell them to a power company in, for instance, California.
Think of RECs (or SRECs, for solar power) as a tracking mechanism for green energy as it flows into the grid. Electricity generated from one source is indistinguishable from energy produced by another source. Therefore, some form of tracking is required. Imagine it like dumping a glass of water into a swimming pool and then removing a glass of water from that pool. While you don't have the same water in the glass, you still have a full glass.
Electricity works the same way when we pump it into the grid, only we measure it by kilowatt-hours. (Don't try to dump your electricity into your pool. It won't work out.)
RECs for Individuals and Residential Power Customers
Jokes aside, this accounting for — and returning of — clean energy into the grid is essential, even in relatively puny amounts.
According to the US Environmental Protection Agency (EPA), power generation remains the country's largest industrial air pollution source. It's also a significant contributor to greenhouse gas emissions, even despite advances in pollution controls in recent years.
Batteries exist for homeowners who wish to store their electricity, but they're costly and have a finite shelf-life. Clean energy becomes a challenge to keep. That's why many homeowners choose to send it into the grid.
So, renewable-generated power is fed back into the power grid. The provider of that renewable electricity — even a homeowner with rooftop solar panels — can join a program with their electric company to receive RECs as proof of their contribution. Residential homeowners can sell energy certificates in standard practice. But they are often sold back to the power company or used as a credit on their power bill.
But what if you're thinking bigger? What if your organization has placed a high value on "going green" in 2021, and you have to invest significant funds to reduce your company's carbon footprint?
On a much bigger scale than your household rooftop, the bulk of renewable power pumping into the grid is created at solar plants and wind farms.
Clean Energy for Organizations
If your corporation wants to rub elbows with the likes of Bezos and Zuck, your company can join REBA.
Alternatively, you can join forces with some other companies and make a joint buy. Cox Enterprises, Bloomberg, Gap Inc., Salesforce, and Workday did this back in 2019. First, these five players negotiated individual power purchase agreements. Then, they compiled their interests to act as anchor buyer of a large renewable energy project. The (then) novel deal was facilitated with LevelTen Energy, a young tech startup from Seattle.
Of course, you could also reach out to the big players in renewable energy directly (though we'd advise you to involve a third party, and we'll get to that in a minute.)
Name Drop! The Big Players in Renewables
According to this article at energyacuity.com, the top ten renewable energy generators in the US are:
- Siemens AG
- Next Era Energy
- Berkshire Hathaway Energy
- Avangrid Renewables
- EDF Energy
- And SEAS-NVE
Reaching out with an intent to buy renewable energy certificates is admirable, and you'll likely go through the same negotiations as any other major commodity buy. HOWEVER, energy needs to be identified and certified before you pull the trigger.
Certification Concerns for Corporations Purchasing Renewable Power
As it stands today, early in 2021 and at the beginning of a new administration, the voluntary clean energy market is shaped by supply and demand with very little regulatory oversight. That may change soon! Still, ensuring that green power purchasers at the corporate level receive precisely what they pay for, and ensuring that energy cannot be double-claimed by more than one buyer, could become a challenge.
- The EPA says a best practice is for clean energy purchasers is to involve a third party to verify and certify the investment.
- Third-party certification programs set minimum quality standards and can provide credibility and confirmation of the product's environmental value.
With proper paperwork in hand, corporations can state confidently that the power they're purchasing met the environmental and consumer protection standards adopted by the third-party certifier.
If your company is placing a high value on a corporate culture that encourages environmentally-friendly behavior, this third party is especially important. Ultimately, the time to get involved with renewable power — and the time to have a conversation about it — is RIGHT NOW. There will be no better day for it. It's time to take that plunge. RECs are about to become a new kind of currency.