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Clean Energy Deal Tracker

Q2 2020: Verizon plays catch-up, GM + utilities = BFFs, Amazon goes big on solar

Almost 2.5 gigawatts of new procurement contracts were inked in the quarter, featuring a mix of the usual suspects and new players.

Q2 2020 Clean Energy Leaderboard

Corporate renewable procurements in the second quarter of 2020 were — surprisingly normal. 

With coronavirus turning everything upside down over the past five months, I was confident that corporate renewable procurements would slow. Instead, we saw a respectable quarter with almost 2.5 gigawatts (GW) of new procurement contracts inked, featuring a mix of the usual suspects (Amazon, General Motors) and new players (Verizon, Boston Scientific). 

While it’s possible renewable projects are coming online slower than planned (companies are less likely to publicize project delays), COVID-19 has not yet squelched corporate appetites for clean energy. Of course, we may still see slowing in the months and years to come if the economic fallout leads to a crunch on financing, as many deals inked this quarter were likely in the works before the COVID crisis. 

Verizon plays catch-up with telecom peers

Verizon announced its first clean energy procurement deal in April — 384 megawatts (MW) of combined capacity from a wind project in Illinois and a solar project in Texas.

It’s a respectable amount of capacity and the third-largest deal of the quarter. It’s also overdue, as Verizon has lagged behind its telecommunication peers (AT&T, Sprint and T-Mobile) in embracing clean energy. 

Sprint and T-Mobile both have 100 percent renewable energy goals, and AT&T has procured more than 1.5 GW of clean energy, mainly from wind energy.

In comparison, Verizon currently has only a 50 percent clean energy goal by 2025. As a result, Green America’s recently updated Clean Energy Is Calling report ranks Verizon behind its three telecom peers in clean energy progress, a ranking that takes into account the four companies’ clean energy commitments, clean energy deployments and carbon neutrality targets.

The competition among the telecom giants to transition to clean energy is a testament to the power of peer pressure between industry peers, and the reputational importance of climate action to business-to-consumer corporations. 

Evident of the reputational opportunities in clean energy for telecom companies, T-Mobile made a big to-do about a wind farm becoming fully operational on Earth Day, one of five projects the company announced in Q3 2019 that brought the company to 95 percent renewable energy. 

Also in Q3 2019, AT&T announced a giant, 940 MW solar and wind deal to coincide with Climate Week. Further, AT&T also has emerged as a leader in wind procurements, a resource in which the sector has established itself as a driving force. The telecommunication sector is the third-largest procurer of wind energy, following only tech and retail. 

Financial institutions deepen commitment to renewables 

Wells Fargo and Bank of America announced renewable procurement deals in Q2 that were quite similar to each other.

Neither deal is huge — Wells Fargo is procuring 150 gigawatt-hours annually; Bank of America is procuring 106 GWh annually — and both use renewable energy credits (RECs), meaning the financial institution will purchase the environmental credits for the generation of the renewables. 

This is the second such deal for Wells Fargo. Last year, the bank inked a solar contract with NRG Energy to cover all electricity needs for its Texas location.

The Q2 procurements are expected to cover 1,200 Wells Fargo properties in California and Virginia and 345 Bank of America facilities in Texas. The deal shows that these financial institutions, known for backing fossil fuel projects, are betting on and prioritizing renewable energy for internal operations. 

While larger financial institutions are ramping up renewable procurements, the curve already has been set by Fifth Third Bank. Fifth Third, which operates in 10 states in the midwest and south, committed to 100 percent renewables in 2018 and reached its goal last year

General Motors zooms towards clean energy goals

General Motors has a reputation for playing nice with utilities. In the second quarter of 2020, GM continued its leadership by inking two new utility partnerships. The car company will purchase 100 MW of solar through Tennessee Valley Authority to power GM’s Spring Hill’s manufacturing facility, and 330 MW of solar through the utility DTE in Michigan, GM’s home state. 

In February, the company accelerated its renewable energy goal by a decade, moving its 100 percent renewable target from 2050 to 2040. Rob Threlkeld, global manager of sustainable energy, supply and reliability, shared in a conversation in March that the company is still on track to meet that goal, despite the pandemic "speed bump."

"The economics are driving it, there will continue to be that transition," Threlkeld said. "It may slow some contracts down that we’re working on because we just don’t have all the necessary resources fully available to us at this time, but it’s not going to delay things significantly."

In the company’s annual sustainability report released last week, GM confirmed it continues to be on track for its renewable goals.

International PPA are (still) going gangbusters — and maturing

U.S.-based companies continue to look abroad to procure renewables to support international operations, a trend I first wrote about in Q4 2020.

Amazon earned the crown of largest procurement deal of the quarter, 615 MW of solar, entering a five-project agreement spread across three countries: Australia; China; and the United States. The multi-project, multi-country model is reminiscent of the largest procurement deal to date, Google’s 1.6-GW package of 18 projects announced in September.

Ball Corporation, which entered renewable procurements in a big way when it met 100 percent of its energy needs for North American operations with a single deal in Q2 2019, inked its second major procurement deal in Europe; a virtual power purchase agreement (VPPA) in Spain that is expected to reduce packaging company’s Scope 2 emissions in Europe by almost a fourth.

In Q2 2020, a surge of European companies, large and small, got in on the renewable energy action. 

A quick count of the corporate agreements outside of the states from Renewable Now’s bimonthly PPA roundup shows that the number of international deals is about equal to the number U.S.-based deals. Many of these deals are in western Europe, with Spain emerging as a favorite location for new assets. 

The chart below shows the company and location of international deals (not included in our deal tracker of U.S. companies or projects). 

International Corporate Procurements in Q2 2020

With the European Union’s targets for net-zero emissions by 2050 and its "green" recovery package to jump start the COVID-ravaged economy, I’m keeping my eye on European procurements to see what new models and deals it creates. 

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