US Corporate Renewable Energy Procurement Hits Record Levels

Corporate renewable energy procurement is currently on track to exceed 5 gigawatts (GW) in 2018, according to figures announced recently by the Renewable Energy Buyers Alliance, which is so far tracking a new record of at least 4.96 GW worth of new capacity already acquired this year.

So far this year (as of October 19) there have been 59 deals signed by US corporates for a total of 4.96 GW — already a new record over the previous high of 3.22 GW set in 2015, and representing the most first-time buyers in a single year.

The largest corporate-backed projects announced and signed this year include the 315 megawatt (MW) Power Purchase Agreement (PPA) signed between Microsoft and sPower in March for electricity from the 500 MW Pleinmont I and II solar farms in Virginia; and the dual announcement made by AT&T in February for 300 MW of wind energy from a project in Texas and 220 MW for wind energy from a project in Oklahoma. (It’s worth noting that AT&T followed that up in June with a separate 300 MW PPA to secure electricity from two Texas wind farms.)

These are the latest figures from the Renewable Energy Buyers Alliance (REBA) — an initiative led by the Rocky Mountain Institute, World Wildlife Fund (WWF), the World Resources Institute, and Business for Social Responsibility.

“For 2018 specifically, there are two key driving factors behind the growth in corporate renewable energy procurement,” said Kevin Haley, a Program Manager at the Business Renewables Center, who spoke to me via email. “First, companies continue to see renewable energy as good for business and are doubling down on renewable energy and carbon emissions commitments. As companies have announced these public commitments over the past few years, the energy and sustainability teams inside the companies have been working to meet those goals which are now resulting in new renewable energy deals.

“Second, the process for procuring renewables has become better understood. While just 4 companies had completed deals prior to 2013, now more than 75 companies have completed deals and shared best practices on how to streamline and accelerate their procurement efforts.”

Importantly, REBA’s numbers show that corporate renewable energy procurement is beginning to become more mainstream, and is spreading through even more sectors. In 2014 it could charitably be said that three sectors were interested in renewable energy procurement — IT, consumer discretionary, and consumer staples — for a total of 32 MW over 5 deals. In 2015 this expanded to seven sectors, but IT accounted for 52.6% of the 3.22 GW over 32 deals.

In 2018, however, IT’s share of procurement is down to only 29% while the other six sectors — consumer staples, consumer discretionary, financials, healthcare, industrials, materials, and telecommunications — have begun accounting for increasingly larger shares.

Importantly, the antipathy towards renewable energy stemming from the United States’ President and his Administration has so far had relatively little impact on the decisions of corporations. “Corporate renewable energy procurement has largely been a voluntary exercise, driven by customer expectations, sustainability commitments and market economics,” explained Haley. “We haven’t seen a significant impact from federal energy policy to date, but any policies working against renewable energy access are very much in conflict with prevailing corporate strategy on energy procurement in the US. It’s safe to say that businesses will want to be buying more renewables in the future, not less.”

The geographical location of corporate renewable energy procurement is expanding as well, growing from only 9 states in 2013 to a total of 26 states so far this year.

“Regional diversification is generally very important to corporate renewable energy procurement for a variety of reasons,” Kevin Haley added. “Often, companies are interested in co-locating their renewable energy projects with their physical operations. This way they can better offset their carbon emissions, potentially hedge against rising costs for their existing energy usage, and demonstrate impact to their local communities. Project economics can also be sensitive to various regions or locations – for example, wind power can be very affordable in Texas, hence why many companies have chosen to build projects there.”