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Big Companies, Big Renewable Investments

The world’s largest enterprises are realizing the benefits of renewable energy, motivating many top-tier companies to set up voluntary corporate renewable energy programs that scale up their use of on-site solar and wind power systems. Many factors have influenced Fortune 500 companies and other leading enterprises to adopt these targets, including an attractive economic return on investment, the worsening effects of climate change, and a deep concern from their customer base about environmental sustainability. Corporations are fighting to bring about public policy that facilitates renewable energy installations on commercial buildings. Twenty-four companies from the Fortune 100 and Global Fortune 100 have set specific targets for percentage of renewable energy generated, capacity (MW) or level of investment in renewable energy for their own operations.

According to the Ceres Power Forward Report, Wal-Mart is prioritizing long-term PPAs above other financing models as a way of procuring long-term, low-cost renewable energy. The company has set a long-term goal to have its operations fueled 100 percent by renewable energy (no date set). Wal-Mart has more than 180 renewable energy projects in operation or under development, providing more than 1.1 billion kWh of renewable electricity annually. Wal-Mart is currently the largest, on-site, green power generator in the United States, and has more installed solar capacity than any other company in the U.S.

Another front-runner in the corporate shift toward renewable energy is Warren Buffett’s utility company MidAmerican Energy Holdings, co-owned by his conglomerate Berkshire Hathaway. This past December, the enterprise ordered 1,050 megawatts of Siemens AG (SIE) wind turbines at a cost of approximately $1 billion, which was the biggest land-based wind turbine purchase the world has ever seen. The turbines will be installed in Iowa, a state where wind power is already the cheapest source of electricity. All 448 turbines are planned to be generating power by the end of 2015, and will generate enough electricity to power about 320,000 households. In addition to that, Buffet’s conglomerate has purchased the 550-MW Topaz Solar Farm in San Luis Obispo County, California, the 290-MW Agua Caliente project in Yuma County, Arizona, and the 579-MW Antelope Valley Solar Project in Los Angeles, California.

In recent years Whole Foods Market has announced several aggressive targets for energy use reduction and on-site generation, alongside their existing policy of offsetting their energy use with Renewable Energy Credits (RECs). In particular, Whole Foods Market in Gowanus, Brooklyn has earned a reputation as a “store of the future,” implementing countless energy efficiency and sustainability initiatives on-site. This store alone contains more examples of renewable energy and efficiency than some companies have throughout their entire operations.  Solar and wind energy work together to completely power two electric vehicle charging stations and 19 LED off-grid streetlights. A 324-kilowatt (kW) solar array covers much of the parking lot and offsets nearly 30 percent of the 56,000-square-foot building’s electricity use.  Additionally, a 157-kW combined heat and power system will provide heating and chilled water throughout the year and during grid failures.  The supermarket produces enough renewable energy to stay open during grid disruption, making it a shelter where people can charge their phones and gain access to electricity during utility power failure. The market will soon receive the highest level of green building accreditation, LEED Platinum, sealing its reputation as one of the most sustainable supermarkets in the world.

Hilton Worldwide has also taken on a green corporate image since installing six UGE vertical-axis wind turbines on its hotel in Fort Lauderdale, Florida, offsetting its carbon consumption by 70,000 lbs a year. The wind system produces ten percent of the hotel’s electricity, powering 372 guestrooms and public areas. The return on the $500,000 investment will take less than ten years, and after that the electricity is free.

Commercial facilities on small island nations are also increasingly installing renewable energy systems. Due to the high cost of importing fossil fuels, the electricity price per kWh is astronomical.  Small businesses and large enterprises are installing renewable energy systems to lower energy costs. Government support, such as net metering and feed-in tariffs, are making renewable energy cost-effective, allowing consumers who generate their own electricity to feed excess power back to the grid. In some cases where the grid is less reliable, renewable energy and microgrids are also being used for commercial facilities. Not only have small island enterprises recognized the financial benefits to renewable energy, but they are also aware of their vulnerability to climate change. The United Nations’ Environment Programme reported that rising sea levels will affect small island states as much as four times higher than the rest of the world. Thus, these island states are taking the necessary action to decrease their carbon-footprints.

Johnson & Johnson launched a CO2 project capital relief fund to help allocate its capital toward renewable energy investments and to drive implementation of energy efficiency and renewable energy projects at their sites around the world. It launched a $40 million annual capital relief fund to support renewable energy projects globally, and have set a target to be powered by at least 50 MW of renewable energy by 2015. Given the important role of government in developing renewable energy policies, J&J was an active member of the United States Climate Action Partnership, an alliance of major businesses and leading environmental organizations in support of legislation requiring significant reductions of GHG emissions.

Many companies with corporate renewable energy commitments, including Hewlett-Packard, Johnson & Johnson and Sprint, are engaged in policy advocacy, both directly with legislators and in support of key policies such as the Production Tax Credit (PTC) for wind. Others are seeking to change the rules so they can sign Power Purchase Agreements (PPA) and choose where and how they source their energy. As large electricity consumers with political clout, corporate purchasers of renewables are, in many cases, redefining the politics of renewable energy.

Companies with targets tend to invest more in renewable energy, creating innovative ways of meeting their goals along the way. In addition, they also tend to invest in longer-term projects and procurement methods like PPAs and on-site generation, using their sway to effect change in the political arena of renewable energy. In these ways, large enterprises are spearheading the shift from fossil-fuel, utility-scale energy production toward on-site, renewable energy generation, making this transition more affordable for everyone.

Ryan Gilchrist leads UGE’s Enterprise Division, delivering clean energy solutions for commercial clients. He can be reached at ryan.gilchrist@urbangreenenergy.com.

Lead image: Big goals via Shutterstock.

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