BNEF and RE100- Corporate procurement clean energy

Both the solar industry and the energy industry are booming. For the 5th year in a row, growth can be seen within corporate clean energy procurement. In this article, among other things, we will take a closer look at the outlook for corporate clean energy procurement set forth by Kyle Harrison, head of sustainability research at BloombergNEF (BNEF). We also want to take a detailed look at the impact of the RE100 (non-profit global association of renewable energy companies) in terms of growth. Be excited to see what the future will bring us in this area.  

An optimistic outlook from BNEF raises questions  

The chart below shows very clearly that growth increased very rapidly from 2019:   

ine, 08/07/2021, https://www.pv-magazine.com/magazine-archive/bnefs-bullish-outlook-for-corporate-clean-energy-procurement/   

From this graph, we can clearly see that there was a rapid increase from Q3 in 2019 until today. We are now in the record year of 2021, and according to Kyle Harrison, contractors have announced a value of 8.3 GW of clean energy power purchase agreements (PPAs) for the existing year. At a similar time last year, that figure was 5.2 GW.  

However, such growth also brings out different skeptics. The following questions often arise here from a corporate perspective:  

  • Is the corporate clean energy procurement market sustainable over time?  
  • What happens as utilities continue to decarbonize and the grid gets cleaner?  
  • Can risk-averse buyers rely on the current PPA model?  
  • Should companies place their sustainability chips elsewhere in the event of further weather disasters, such as the recent freeze-out in Texas?  

According to Harrion, these concerns are very outdated. Companies today typically approach decarbonization holistically, using it as a proactive growth strategy that can benefit different stakeholders. This inflection point, which includes net zero and 24/7 zero CO2 goals, has breathed new life into corporate clean energy purchasing and made BNEF optimistic about future activities.   

Net zero goals stimulate clean energy demand   

“Net zero” refers to the pursuit of various reduction measures of man-made greenhouse gases until they are eventually completely removed from the atmosphere. Companies are increasingly committing to these goals, increasing the need for clean energy. If companies registered in this area were to achieve the set between targets and final goals, this would result in annual emissions reductions of 8.3 billion metric tons of carbon dioxide equivalents by 2050. This is equivalent to 20% of global emissions.   

Clean energy as a guiding principle for many companies  

According to Harrison, many companies have set themselves the goal of using clean energy to produce products with unique selling points. This includes CO2-neutral vehicles, for example. Oil companies are also investing in this form of energy these days to reduce the emissions generated by the use of their products. An example of this is the petroleum and natural gas company “Shell”, which has bought up electricity retailers, EV charging companies and virtual power plant providers in order to independently switch from an oil company to an electricity company. These agreements will prove essential in the future as they work toward net-zero emissions by 2050.  

CO2-free energy goals call for hourly generation checks

A handful of companies took internally set sustainability strategies to the next level by setting “24/7 CO2-free” goals, according to Harrison. Instead of looking at generation from their clean energy purchases at the end of the year and offsetting it against annual electricity consumption, companies like Google and Iron Mountain are now aiming to do this hourly. To make this a reality, various technologies must be combined to ensure more consistent generation profiles. These technologies include solar, wind, geothermal, hydro, nuclear and batteries, among others, to net-zero renewable generation and electricity consumption hourly. In addition, this goal usually results in a company having to purchase more clean energy than is actually needed. However, this contract can allow a business to be “100% renewable” at the end of the year, but only during certain times of the day. Combining this solar project with wind or batteries provides more consistent clean energy generation throughout the day. For this reason, Harrison says a 24/7 strategy should in many ways be considered the next logical step after moving to 100% renewable energy. 

RE100 – merger of companies drives growth  

RE100, an initiative of influential companies around the world committed to increasing demand for and supply of 100% renewable electricity, is also contributing to the steady growth for renewable energy purchasing. This initiative is led by the Climate Group and the Carbon Disclosure Project (CDP). It consists of a total of 316 companies from more than 175 markets. Among others, the world-renowned Chinese PV manufacturer Longi Solar has made this commitment. From an interview between PV Magazine and Mariana Daykova, Senior Manager for Renewable Energy at CDP, we can take some interesting aspects regarding this merger. We would like to break these down for you in more detail here.   

The original idea of the RE100 was once to bring together all companies interested in this topic in order to set new impulses for the renewable power consumption. The original thought here was on the energy industry market, which should be advanced. However, the number of members has unexpectedly grown to the current year 2021. Participants now come from the European region as well as from North America and the Asia-Pacific region. Daykova announced that the total value of renewable electricity consumed by this group of members exceeds 280 terawatt hours annually.   

According to the CDP, most of the companies claim that such a merger is intended to strengthen their customer relationships as well as to expand the area of risk management from a brand perspective.  

Barriers, which can often occur in individual countries, making the use of renewable energy more difficult, are also included in future plans within the merger.   

A very important detail, which Daykova mentions in the interview, is that a cooperation between the governments and the companies has a particularly high priority in order to be able to bring about a rapid energy turnaround. If such cooperation takes place, obstacles can be removed more quickly. Cooperation between investors from the power supply sector and companies is also essential. The stronger the cooperation between companies, politicians and energy suppliers, the better the supply side will be put in the picture and the faster the energy transition can be achieved.  

Conclusion  

As we found out in this article, nowadays more and more companies are addressing the issues of renewable energy, clean energy and sustainability. It is remarkable how fast the curve of companies that have set various goals in these areas or even joined an initiative is rapidly increasing. It can be assumed that more and more companies will join different alliances in the future or will first set permanent goals on their own in order to be able to act sustainably. Due to climate change and the high and increasing importance of sustainability in our society, even companies that do not currently address these issues will be forced to move in this direction in the long term. 

References 

Kyle Harrison ? PV-Magazin; BNEF?s bullish outlook for corporate clean energy procurement; 08.07.2021; https://www.pv-magazine.com/magazine-archive/bnefs-bullish-outlook-for-corporate-clean-energy-procurement/ 

Mariana Daykova und Becky Beetz ? PV-Magazin; RE100 and the corporate renewable electricity boom; 08.07.2021; https://www.pv-magazine.com/magazine-archive/re100-and-the-corporate-renewable-electricity-boom/ 

PV Magazin ? 07/2021; A solar lifeline ? How PV is providing a spark of hope in Gaza?s dark hour; S. 75 ? 79; Juli 2021; https://1uef331wxsmx3pof343ifwms-wpengine.netdna-ssl.com/wp-content/uploads/sites/5/woocommerce_uploads/2021/06/pv-magazine_Global_2021-07_44towariwoa6-xlozwq.pdf 

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