For renewable energy access to expand in international markets, the focus must be on buyers
Editor’s note: This essay was contributed by one of the NGOs that make up the Renewable Energy Buyers Alliance (REBA), a consortium dedicated to growing large buyer demand for renewable power and helping utilities and others meet it. You can find the other articles here. REBA’s next annual summit will be Oct. 14-16 in Oakland, California ahead of VERGE 18.
Companies are the world’s largest energy users. With that comes enormous opportunity — in addition to responsibility.
Energy for electricity production and industrial uses is the cause of nearly half of the world’s global greenhouse gas emissions. And well over two-thirds of that delivered electricity is for commercial and industrial users. This means shifting the behavior of companies is fundamental to the clean energy transition and to reducing emissions on the scale needed to fight global climate change.
Companies recognize the economic opportunity to invest in clean energy, but barriers to entering the marketplace, particularly for small and medium-size enterprise firms that lack in-house capacity to execute deals, are extensive. What’s needed is a central forum for companies to join together to project their collective demand, instead of seeking solutions in a fragmented, uncoordinated way.
The Renewable Energy Buyers Alliance (REBA) does just this: it brings together more than 270 companies, including 180 corporate and non-residential energy buyers, to demonstrate an unprecedented and rapidly growing corporate appetite for renewable energy (RE).
2018 already boasts the largest amount of corporate energy procurement on record, topping the previous high of 2015 by 14 percent, and we’re only a little more than halfway through the year. In August, the number of publicly announced gigawatts (GW) contracted in the United States reached 3.57 GW in 2018, and there are still nearly five months to go and several deals still in the pipeline.
As more companies begin to join the corporate clean energy movement, and as international markets begin to mature, there’s an opportunity to use this model of collective action to speed the energy transition in emerging markets across the globe.
REBA, and the experiences of the NGOs that drive the alliance, gives the world roadmap for success and key lessons to learn from:
- Corporate energy buyers must be at the heart of the discussion. For demand to drive market growth, buyers themselves more effectively can articulate their RE needs while also identifying specific challenges, defining the solutions and working with suppliers, market intermediaries and the NGO community to implement strategies. Raising the buyers’ voice as a collective is additionally important because policymakers listen when a cohort of companies speak.
- There needs to be a strong center of gravity for corporations to gather around. Bringing the various initiatives, tools, resources and NGO-led activities together onto a coordinated open platform has made support much more accessible and buyers more effective. It also has increased the invaluable opportunities for peer-to-peer learning among buyers and other market participants. The development of an increasingly strong and coherent platform also has resulted in the increasingly strong and consolidated voice of buyers.
- Strong local ownership and a localized theory of change are paramount. A truly transformational effort will require strong and leading participation from local actors. All markets are different — each has its own rules, norms and ways of doing business. With that in mind, we need to develop a unique approach that works for each market. This relates to both the specific resources, tools and other support that will help companies more effectively access RE, as well as a plan to leverage the collective voice of corporate energy users towards energy transition in each particular country.
- There must be an international network that links efforts in each domestic market. A strong international network will allow companies easy access to knowledge, tools and support activities by connecting them directly to local platforms in markets where they have energy demand or supply chain operations. It also will serve the important role of providing an international hub for coordination and collaboration among NGOs, international organizations and business associations as they scale their efforts to support corporate procurement.
When corporate energy buyers come together they develop one voice, and when that voice is lifted up through a coherent process and platform, they become a strong driver of change. This is already a proven model for success in the United States. If that framework is adapted to fit more international markets, we will see renewable energy procurement increase globally, putting the world on a trajectory to deliver on the goals of the historic Paris Agreement.