A market brief released today by national business group Advanced Energy Economy finds that renewable energy demand among U.S. companies is significant and growing quickly. Another report published today by the Center for New Energy Economy at Colorado State University (CNEE) explores a pathway for state energy markets to meet this growing corporate demand for renewable energy procurement.
In 2016 Corporate Advanced Energy Commitments, AEE reports that 71 of the Fortune 100 companies have set renewable energy or sustainability targets, up from 60 just two years ago. Among the Fortune 500, commitments have held steady at 43 percent, or 215 firms. Of these companies, 22 have committed to powering all of their operations with renewable energy.
In another new report, Private Procurement, Public Benefit: Integrating Corporate Renewable Energy Purchases with Utility Resource Planning, CNEE explains that corporate renewable commitments present challenges but also several opportunities for states to capitalize on these commitments. To date, states have had mixed success at navigating the trade-offs, but by considering corporate renewable energy targets alongside the utility resource planning process, states can resolve the challenges and realize the benefits.
“Companies are committed to purchase renewable energy one way or another—it’s just a question of where and how, and that’s a race every state should want to win,” said Malcolm Woolf, senior vice president of policy and government affairs at AEE. “Clearly, this trend isn’t going away. States that make it easier for companies to purchase renewable energy will be rewarded with new economic development, tax revenues and jobs.”
The AEE brief notes that in many states, corporations encounter regulatory obstacles that make renewable energy procurement difficult or impossible. Some companies, such as Microsoft, Amazon, Apple, and Facebook, have been able to work out deals through their local utilities that enabled them to purchase new renewable energy to meet their electricity need, but these arrangements may not be available to companies that lack their resources and experience. At the same time, states differ in their willingness and ability to accommodate this corporate purchasing, potentially thwarting the desires of their biggest corporate citizens for renewable energy and discouraging such companies from siting operations in their state. The CNEE report points to ways states can gain from making these accommodations through their utility oversight process.
“Microsoft is making great progress towards our goal to use more clean energy each year, leading to our 100 percent goal,” said Rob Bernard, chief environmental strategist at Microsoft. The technology giant is ranked number 25 on the 2016 Fortune list. “We’ve found that partnering with utilities and governments in states like Virginia, Wyoming and elsewhere can bring new energy to the grid in a way that helps our business and the state. But there’s more work still to be done to accelerate the pace of this progress.”
“Salesforce has set a target to meet 100% of our energy needs through renewable energy, and we have made great progress, for example, with wind projects in West Virginia and Texas,” said Patrick Flynn, Director of Sustainability at Salesforce. “The more options available to us in a given state, the better and we’re always looking at new and innovative solutions.”
Across different sectors, companies also face quite different challenges. Walmart, as a retailer with stores in all 50 states, has to navigate 50 different state policy landscapes, some of which currently accommodate the company’s preferred renewable energy purchasing methods and others do not.
“Utilities have been working with their large corporate customers for years to ensure good outcomes under demand-side management programs, and there’s no reason this success can’t translate over to renewable procurement,” said Jeff Lyng, senior policy advisor at CNEE and lead author of the paper. “We see a promising opportunity for solutions that are not just mutually acceptable but mutually beneficial to utilities, customers, and developers, which is an exciting prospect.”
AEE’s market brief noted leading sectors for renewable energy and sustainability targets are hotels, restaurants, and leisure; chemical; apparel; food, beverage, and tobacco; industrials; transportation; and motor vehicles and parts. Sectors lagging behind are wholesalers; energy; and engineering and construction.
Data on renewable energy and sustainability targets set by Fortune 500 companies was collected from publically available corporate commitments. CNEE’s report is the final installment in a four-part paper series for Advanced Energy Economy Institute (AEE Institute), an educational affiliate of AEE.
Together, these two reports reflect the opportunity that corporate renewable energy commitments present to states. As more companies set increasingly ambitious targets, the directive has never been clearer for states to take action by reducing market barriers.
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