Global firms are progressively addressing sustainability issues due to customer and social demand. Purchasing renewable energy is critical for business climate leaders' emissions reduction strategies.
FREMONT, CA: Climate change is the defining issue of the present generation. According to the IPCC, human-caused emissions have warmed the earth by around 1.1C during the nineteenth century. The consequences are still being felt today, from floods to wildfires. However, the future may be much worse. Not just national governments must take action. Global firms, too, are recognizing their duty. It is becoming increasingly evident that sustainability is good business—and the only way to conduct business in the future. To many businesses, one of the most critical immediate actions toward lowering greenhouse gas emissions is to reduce emissions from electricity use through renewable energy sources such as solar and wind.
Purchases of renewable energy have risen considerably in recent years. In the United States, approximately 100 corporate renewable energy sourcing agreements totaling more than 10 GW of capacity were signed in 2020, up from just 1.5 GW in 2015. Some key trends are defining the path of the renewable energy purchasing market as it matures.
Added value: This means that corporate buyers encourage the development of new renewable energy plants. A corporation can contribute to developing a planned wind farm (but not yet budgeted). By agreeing to a CPPA that guarantees a revenue stream, the corporate buyer provides the developer with sufficient certainty to build the wind farm. Another requirement for identifying a project as supplementary is not subsidized. As civic society pressures corporations to increase their green ambitions, the trend toward purchasing renewable energy from alternative sources is certain to continue.
Constant supply: Over 50 corporations have already achieved 100 percent renewable energy source, and hundreds more have committed to doing so. However, as ambitions grow, some now attempt to match the volume of electricity demand in real-time with an equivalent volume of renewable energy supply (i.e., within the same hour or less). In reality, this entails annually balancing a company's energy use with renewable energy generation.
Baseload renewable energy (e.g., sustainable biomass or geothermal) or storage is necessary to make this practicable over an extended time horizon. However, it should be emphasized that 24/7 is a guiding star today. Even the most modern businesses today do not anticipate matching 100 percent of their energy consumption hourly. Rather than that, they are searching for ways to raise the share of matched green energy and eventually reach 100 percent renewable energy 24 hours a day.
