Five predictions for corporate renewable energy portfolios – Smart Energy

renewable energy wind turbines at sunset
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Rob Collier, vice-president of developer relations at renewables’ marketplace LevelTen Energy, outlines key trends to watch. If you want to predict where the renewable energy industry is headed, you simply have to look toward the world’s largest technology companies.

Tech titans like Amazon, Apple, Facebook, Google and Microsoft have always been at the forefront of renewable energy procurement, and recently mid-sized companies like Salesforce have also pushed the industry forward. As the world’s largest purchasers of electricity, they’ve wielded their immense buying power to transform the industry.

This article was originally published in Smart Energy International Issue 1-2021.
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They set the bar when it comes to corporate sustainability goals, and every year they move that bar higher. As we head into 2021, these are the new goalposts that we predict corporate renewable energy buyers will be striving toward as a result of the tech titan’s leadership.

#1 Social justice will be a key consideration

This year corporate buyers want to evaluate social justice criteria when selecting a renewable energy project for a power purchase agreement. These buyers not only want to know how the project will positively impact the community – such as reducing pollution, generating tax revenue, and creating jobs: they also want to know how the developer of the project treats its employees, including diversity and fair pay. They also want to ensure that the developer creates supply chain accountability, and adheres to responsible business practices.

Microsoft has established an innovative model that I anticipate others will follow. In July, Microsoft committed to develop a portfolio of 500MW of solar energy projects in under-resourced communities in the US, working with local leaders and prioritising minority and women-owned businesses.

The company will also aim to procure in “communities that are economically underresourced, disproportionately impacted by pollution and/or lack access to the benefits of the clean energy transition.” Another leader in this space is Salesforce, which recently published its ‘More than a Megawatt’ paper, which provides a starting framework and expert third-party guidance on how to maximise the positive impacts of renewable energy purchases and minimise the negative impacts.

#2 More companies will aim to be 100% renewable… all the time

Companies can claim they are ‘100% renewable’ by purchasing enough clean energy to cover the amount of energy they use on an annual basis – not an hourly basis. In other words, ‘100% renewable’ means that in many hours of the day, companies are consuming more than the renewable energy they’re buying. So, even though these companies may have achieved a ‘100% renewable’ goal, fossil fuels are required to support their energy demand. Every technology company contributes to this.

Google wants to eliminate the need for fossil fuels altogether by matching the time of renewable energy generation to the time the energy is consumed. To get there, the company has developed a new technology that shifts the electricity demands of its largest data centres to match clean energy supply. The company is also looking for ways to improve its renewable energy procurement through PPAs.

#3 More companies will commit to reduce

Scope 3 emissions through supply chain programmes. Scope 3 emissions are those caused by the production and use of a company’s products, and are often the largest source of emissions for a company. For example, Scope 3 emissions from manufacturing make up about 75% of Apple’s overall carbon footprint. Unlike Scope 1 and 2 emissions, which a corporation can reduce through energy efficiency measures and renewable energy procurement, Scope 3 emissions are out of the company’s direct control, so they are the most difficult to reduce. That’s not stopping them from trying.
Apple, for example, has a goal to transition the electricity used across its entire manufacturing supply chain to 100% renewable sources by 2030.

Image: Pixabay

Through Apple’s Supplier Clean Energy Program, 71 manufacturing partners in 17 countries have committed to 100% renewable energy for Apple production. As a result of the program, in August, Taiwan Semiconductor Manufacturing Company, an Apple supplier, signed the largest corporate PPA to-date, a 20-year contract for the entire output of a 920MW offshore wind farm owned by Ørsted in Taiwan. Amazon, Facebook, Google and Microsoft have also committed to reducing emissions in their supply chain, and given the size of their supply chains, this is going to have massive repercussions around the world.

Their suppliers in Europe and Asia are turning to renewable energy procurement for the fi first time, transforming global energy markets. According to BloombergNEF, the first half of 2020 saw significantly higher volumes of procurement in Europe, Australia and Taiwan than last year.
One way corporations can assist their suppliers in purchasing clean energy is through buyer aggregation; the corporation can team up with multiple suppliers to purchase the entire output of a project.

Image: Pixabay

#4 Storage will be added to PPA portfolios

In 2021, corporations won’t just be signing PPAs with wind and solar projects, they’ll also be doing deals with utility-scale storage projects. LevelTen has helped clients enter into storage agreements this year, and together with our partners, we expect more to come in 2021. Storage projects have the unique ability to charge when electricity prices are low and sell when electricity prices are high, enabling off-takers to capture the difference and balance wholesale market exposure in their renewable energy portfolio. Although Facebook hasn’t publicly announced any storage contracts, it is investing in the technology. Facebook and Carnegie Mellon University recently announced that they are trying to use artificial intelligence to find new “electrocatalysts” that can help to store electricity generated by renewable energy sources.

In addition to the technical challenges of storing energy, grid infrastructure and utilities will need to adapt to the new capabilities. But with the right policies and regulatory frameworks in place, the energy storage industry is expected to boom, and corporations will help fuel that growth.

#5 The need for speed will drive innovation

Many of the tech companies’ most ambitious sustainability targets are set for 2030. While a decade may feel like a long time, it can take years to develop, finance and build a new renewable energy project. At the same time, these companies have to keep up with a constantly-growing demand for energy. It’s not enough to cover their current energy usage, they also need to be prepared to cover what they’ll be using years from now. Corporations are up against the clock, and can’t sign deals fast enough.

The current PPA process is too manual and time-consuming to meet their needs. We predict that new solutions will arise, either from the tech titans themselves or from other market participants, to facilitate faster renewable energy transactions.

This article was originally published in issue 1 2021 of The Guide, an online publication which provides a gateway to the extensive on demand content produced by Enlit Europe.

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