Facebook, Microsoft: We want more clean power!
There is no shortage of non-governmental organizations dedicated to the cause of increasing the use of renewable energy among businesses.
Four of the most notable ones — Business for Social Responsibility, Rocky Mountain Institute, World Resources Institute, and World Wildlife Fund — have collaborated informally for months. Now, they’re formalizing their cooperation through a “coalition” called the Renewable Energy Buyers Alliance, an organization that aims to inspire the addition of another 60 gigawatts of clean energy available to corporate buyers in the United States by 2025.
That’s double the amount of solar and wind power available on the grid at the end of 2014, said Letha Tawney, director of utility innovation at WRI, during a press briefing to announce the initiative.
Last year alone, corporate buyers orchestrated contracts for 3 gigawatts of renewable power but the level of sophistication — and scale — required to negotiate these arrangements is keeping a majority of companies from participating despite a growing hunger, she said. REBA aims to change that.
Aside from the NGOs, the alliance touches 60 "iconic" companies that are participating in one or more programs under the REBA umbrella, including Facebook and Microsoft. The participant plan to meet next week in Redmond, Washington, during a summit hosted at Microsoft’s corporate headquarters.
"We believe that together we can go farther, faster," Tawney said.
Officially speaking, no utilities have "joined" the coalition. But several are “beginning to take the opportunity seriously” and plan to join the summit next week. Three specifically mentioned by Tawney were Berkshire Hathaway Energy (which ranks as the No. 2 wind utility), Dominion Virginia, and Xcel Energy.
What influence does this group really have, especially considering that it has no separate staff or official funding?
Social media giant Facebook now makes availability of a renewable energy supply one key criteria of new data center siting decisions. That means states that can’t address this need could miss out on that economic opportunity.
"In some markets, particularly regulated markets in this country, it’s difficult to buy clean energy — in some cases more or less impossible," said Bill Weihl, Facebook's director of sustainability, during the briefing.
By working together with other companies and utilities to develop more standard procurement frameworks or to develop products that make sourcing solar or wind power simpler, REBA can accelerate acceptance, he said. “As more deals get done, we’ll develop more standard models. When people have seen them before, it makes it much easier to get them done.”
Facebook’s long-term goal is to source all of its power needs using renewable energy. As a short term “stretch goal,” Facebook hopes to ensure that 50 percent of its supply is generated through clean power sources by 2018, Weihl said. Facebook today has data centers in Iowa, North Carolina, Oregon and Texas. It leases space in Virginia.
“We’re interested in expanding the market everywhere, but particularly in states where we have a presence,” he said.
One example of a deal that could inform future models is Microsoft’s public-private partnership launched in March with the Commonwealth of Virginia and Dominion Virginia Power, which will add 20 megawatts of new solar electricity to the grid. The power will support Microsoft’s data center there.
“This is really what REBA is all about. It’s about bringing together a diverse set of stakeholders, which includes customers, utilities and renewable energy developers,” said Brian Janous, director of energy strategy for Microsoft, during the briefing. “We all know we have a long way to go.”
We’ll run up against the limits of what the transactions we can do if we rely on a single model like the PPA.
One area where you can expect particular focus: the development of procurement strategies that go beyond power purchase agreements, a deal structure frequently used by large corporate buyers today to purchase clean power directly from developers.
“While that’s a very efficient way to purchase renewable energy, if you’re a very large buyer and you can consume a lot of electricity at a single location, it’s actually quite challenging for smaller customers to replicate that model. It’s also why utilities are so critical to the conversation,” Janous said. “We’ll run up against the limits of what the transactions we can do if we rely on a single model like the PPA.”
To reiterate, there is no official staff behind this new alliance. REBA brings together a number of existing programs, including the Renewable Energy Buyers Principles (a corporate purchasing pledge spearheaded by WRI and WWF), the Business Renewables Center (RMI’s network for helping simplify transactions), and BSR’s Future of Internet Power initiative, which is specifically focused on clean power for data centers.
“REBA brings [our] informal collaboration together under an umbrella that is clear, more obvious, more coordinated,” Tawney said.