U.S. companies are dominating corporate procurement of clean energy this year even as global demand rises, and the record pace accelerated with two new and very different types of American firms announcing renewable power purchase agreements (PPA) totaling 160 MW this week.
Jelly maker J.M. Smucker Co. signed a long-term PPA with Lincoln Clean Energy for 60 MW of wind power from the 230-MW Plum Creek project in Wayne County, Nebraska. The Plum Creek PPA will help Ohio-based Smucker gain half of its electricity use from clean energy by 2020.
“In 2017, electricity accounted for more than half our greenhouse gas emissions,” Julia Sabin, vice president of government relations and corporate sustainability for the J.M. Smucker Co., said in a statement. “This agreement will not only reduce our carbon footprint but will also allow us to make a lasting contribution to our nation’s renewable energy capacity.”
Health care giant Novartis, meanwhile, announced its own virtual PPA with Invenergy for 100 MW generated from the latter’s Santa Rita East wind farm near San Angelo, Texas. The power is expected to enter the ERCOT system by next year and offset Novartis’ carbon footprint by more than 220,000 metric tons of greenhouse gas emissions per year, according to the release.
“At Novartis, we take our responsibility toward environmental sustainability seriously and it is important for our organization to meet our sustainability goals,” Karen Coyne, Global Head of Environment at Novartis, said in her company’s announcement. “This agreement is in line with our sustainability strategy and is expected to help us reduce our carbon footprint, constrain costs and increase adoption of renewable energy.”
J.M. Smucker and Novartis are only two in a quickening array of U.S. companies taking clean energy matters into their own hands this year. A new report by Bloomberg New Energy Finance (NEF) noted American firms have accounted for 4.2 GW, or 60 percent, of global corporate clean energy procurements so far in 2018, already setting a record over 2017’s previous benchmark pace.
Overall, the Bloomberg NEF 2H Corporate Energy Market Outlook reported that corporations globally have acquired 7.2 GW of clean energy thus far this year, more than 20 percent higher than the 5.4 GW totaled in 2017. Facebook has been the largest corporate buyer of clean energy with more than 1.1 GW signed up, while AT&T is second with 820 MW, according to Bloomberg NEF.
Current U.S. political leadership nationally may be balking at the rush to renewables and seeking protection for baseload generation sources such as coal and nuclear, yet the biggest of U.S. companies are out in front advocating for grid resiliency to nurture long-distance clean energy projects.
In May, five Fortune 100 companies wrote a letter to the U.S. Federal Energy Regulatory Commission asking FERC to intensify its focus on improving the nation’s electric transmission system to benefit long-distance renewable energy projects.
The companies included Cargill, General Mills, Nestle, P&G and Unilever. They are among more than half of Fortune 100 firms-including Apple and others-which have set targets for getting half or up to all of their energy needs from renewable sources over the next few decades.
“In the U.S. and around the world, corporate commitments to procure renewable energy are a growing trend, driven mainly by recent sharp declines in cost, and by the price certainty that long-term renewable energy power purchase agreements offer,” the corporate letter to FERC reads. “U.S. corporations have purchased over 10 GW of renewable energy from offsite projects to date and have set a goal to purchase an additional 50 GW by 2025.”
Another report noted a disconnect between where the renewable energy production and load centers are located. The Wind Energy Foundation’s Corporate Demand and Transmission report earlier this year pointed out that 15 states situated between the Mississippi River and the Rocky Mountains hold nearly 90 percent of U.S. wind potential and 56 percent of solar, but only 30 percent of sales demand. The remainder of that demand lives closer to the east and west coasts. Transmission is needed to connect the two.
While that debate pulsates in the U.S., European corporate demand for clean energy is hardly slacking, either. Bloomberg NEF’s report indicated that companies in Europe have purchased 1.6 GW of clean energy in 2018, another record with five months still remaining in the year.
Aluminium makers Norsk Hydro and Alcoa Corp. have made up 75 percent of those procurements with deals signed in Norway and Sweden. The companies are motivated by the fixed, long-term price aspects of the clean energy PPAs rather than sustainability initiatives, according to the Bloomberg report.
The growth of wind, solar and other renewable options is taking an increasing role in the upcoming POWER-GEN International Conference set December 4-6 in Orlando. Click here for more information about the conference tracks and other details about POWER-GEN.