RMI enlists eBay, GM, HP to help double corporate renewables by 2025
Two-thirds of the Fortune 100 want to buy electricity generated by off-site renewable energy sources this year — or at least that’s what they’re saying publicly.
The problem: the procurement process is complicated, and only a half-dozen big businesses actually have signed purchase orders, including Google, IKEA, Mars, Microsoft and Walmart.
Yes, these companies and others have gotten creative about on-site renewables investments, but that’s a subject for another day. To truly make an impact, they need access to far more renewable energy generating sources.
Against that reality, Rocky Mountain Institute (RMI) hopes to add far more names to that list with this week’s launch of a new Business Renewables Center (BRC), which aims to make the procurement process more straightforward.
Aside from RMI, the new center will be supported by three other organizations involved in the broader Corporate Renewables Partnership that began brewing about two years ago: World Wildlife Fund, World Resources Institute and BSR.
The collective goal by 2025: add 60 gigawatts of wind and solar capacity to the amount purchased by businesses. That’s roughly double today’s total. To get there will take about 600 corporate power purchase agreements (PPAs), covering 100 megawatts.
“Corporations can be a powerful lever for expanding renewable energy in the United States and beyond,” said RMI Managing Director Herve Touati, explaining the motivation behind the center's creation. “They can lock in long-term affordable prices for clean energy that supports the bottom line, reduce their carbon footprint and fulfill their corporate sustainability commitments.”
With its mission to help companies collaborate toward better renewable procurement pratices, BRC is a logical extension of the groundwork laid in July by WWF and WRI with their publication of the Renewable Energy Buyers' Principles.
That document, originally signed by 12 companies including three of the BRC founders (Bloomberg, GM and HP), was meant to inspire deeper dialogs between corporate buyers and renewable energy suppliers. As of October, 19 global brands had signed the principles. Together, they represent a combined demand of 10 million megawatt-hours of electricity annually, or roughly enough to power 1 million homes.
Breaking down clean energy barriers
A report published in mid-January by the International Renewable Energy Agency (IRENA) suggests that biomass, hydropower, geothermal and onshore wind resources are cost-competitive with electricity generated by coal, oil and natural gas. What’s more, solar photovoltaic costs continue to fall quickly — more than 50 percent over the past four years.
In aggregate, BRC's founding members are using about 2.7 terawatt-hours (TWh) of clean energy, according to RMI esimates. But they consume far more electricity every year: about 24 TWh.
What’s holding businesses back from procuring more are two primary obstacles that RMI wants to address with the new center:
- Scarce information about the benefits of clean energy
- Complex transaction processes that lie outside the comfort zone of traditional corporate procurement teams
“The root cause of the problem is that corporate buyers are, for the most part, ‘occasional buyers,’ while sellers are project developers accustomed to dealing with experienced utility buyers, for which electricity is the core business,” noted RMI in a brochure for the center (PDF). “In this case, the transactional needs of buyers and sellers are fundamentally different. It is why we observe a market failure.”
BRC’s plan is to influence the creation of a more standardized approach. Its more than two dozen founding members include not only would-be corporate buyers, but also project developers and financing companies.
“Instead of having hundreds of corporations reinvent the wheel, each member can get immediate access to the cumulative knowledge and wisdom of the industry,” said Rob Threlkel, manager of renewable energy for General Motors, in a statement.
Here’s the complete list of founders:
Corporate — Becton, Dickson and Co., Bloomberg, eBay, GM, Hewlett-Packard, Kaiser Permanente, Nestle Waters North America, Owens Corning, Salesforce.com, Sprint and VF Corp.
Project Developers — Apex Clean Energy, E.ON-Climate and Renewables North America, FirstSolar, Invenergy, NextEra Energy Resources, NRG Energy OneEnergy Renewables, OwnEnergy and SunEdison.
Financing — Altenex, Climate Friendly, Customer First Renewables, Origin Climate, Renewable Choice Energy, Renewable Power Direct, and Wilson Sonsini Goodrich & Rosati.
Among the first deliverables will be an interactive guide to best practices for procurement and the creation of a task force dedicated to brainstorming potential state-level policies that could accelerate renewables adoption, according to the center's brochure.
The organization will be “incubated” for two years by RMI. Ultimately, it will be spun off as an independent operation. Member companies pay a "nominal" annual fee for access to the guide and to participate in taskforces and bi-annual meetings.
Learn more about renewable energy buying options for businesses at GreenBiz Forum 15.