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New study examines organizational 100-percent renewable goals and has surprising results

Cover of report: Moving organizational energy use toward 100 percent renewables — aspiration or destination? Credit: Deloitte.

Last month, Deloitte surveyed 308 executives across multiple industries in the private and public sectors to understand these organizations’ paths in the transition to renewable energy, their goals and procurement strategies and the challenges they face and today they have released the results of that research in a new study called Moving organizational energy use toward 100 percent renewables — aspiration or destination?

Evaluating the current trajectory to 100% renewables

Driven by economic incentives and mounting external pressures for organizations to decarbonize their energy supply, the renewable energy transition has taken root and appears poised to accelerate in the U.S. However, according to survey respondents, better access to renewables as well as policy initiatives and technological advances, would still be needed to help many organizations reach their renewable energy goals, said Deloitte in a press release.

While targets varied significantly by amount and year, 45% percent of respondents cited commitments to increase renewable energy sources by a target year and nearly 25% cited having goals to produce, or generate, specific percentages or amounts of renewable energy. Only 2% of respondents said they were specifically targeting 100% renewables.

Nonetheless, renewables will still likely be vital in helping the more than half (53.5%) of respondents with goals to reduce their organization’s carbon footprint and cut overall greenhouse emissions. In fact, of those respondents who did not report specific goals for procurement, nearly 60% noted increasing their renewable energy use as key to achieving these objectives.

Cost cutting and the environment are top drivers for action

Amongst the top drivers of respondents’ interest in renewable energy, “cost cutting” was cited as number one at 36.4%, followed by the desire to reduce environmental impact and carbon footprint with 35.4%. An emerging driver of increasing importance is evolving stakeholder and investor expectations (13.6%), which is pushing many organizations to develop new environmental, social and governance strategies (ESG), including sourcing more renewables to help decarbonize their energy supply.

“While it is encouraging to see the progress being made by organizations across industry groups, where we are today is only the tip of the iceberg to achieving 100% renewable energy,” said Marlene Motyka, U.S. and global renewable energy leader and principal, Deloitte Transactions and Business Analytics LLP.

“There is a long way to go for those looking to utilize these resources to lower the carbon footprint of their operations. For many, 100% renewables will remain an aspiration unless more wind and solar energy is available and key policy initiatives and technological advances are realized,” she added

Healthcare is surprising leader

Overall, respondents from the consumer products and services, manufacturing, and health care/medical industry groups had the highest concentrations of renewable goals targeted for the period 2020–25, while technology and telecommunications industry respondents’ goals extend through 2045, but are concentrated before 2030.

The health care/medical industry was highest in terms of goals to source a specific percentage of their electricity from renewables, at nearly 61%. And 87% of respondents reported plans to electrify space and/or water heating.

According to the survey, the technology and telecommunications industry group was found to be among the most active and advanced industry sectors in renewable procurement. About 71% of respondents from this group said their renewable electricity purchases were through active sourcing, including onsite renewable resources, increasingly with battery storage. Also, 82% reported plans to electrify space and/or water heating.

RECs, PPAs, even Corporate Community Solar

Over the last decade, the most common strategy to reduce carbon footprints has been to purchase and sell unbundled renewable energy credits (RECs). Today, several options exist, making renewable procurement easier, including utility green tariffs, for organizations in regulated states, and more direct instruments such as power purchase agreements (PPAs), in unregulated states, as well as renewable energy project ownership. Fifty-seven percent of survey respondents reported ownership of renewables and 80% chose PPAs (physical and virtual) as their key procurement strategies. 

And while community solar was originally designed for residential customers, projects are now opening to corporate customers. Only about 11% of respondents chose this as a procurement option, but the potential is high. As states continue to develop policies, this tactic will likely continue to grow.

Policy, technology and accessibility key factors to easing the transition

While electric utilities can play a direct role in enabling organizations to transition to 100% renewables, factors in the broader ecosystem would also have to evolve to accelerate the transition. Primarily, a coordinated national U.S. energy policy putting a price on carbon would be one of the strongest enablers for the 100% renewable movement, according to the study.

From a technology perspective, long-duration battery storage was one of the technologies cited in the study as having the greatest impact in helping accelerate the 100% renewable transition — stabilizing the intermittency of renewables to act more like baseload power sources such as natural gas.

Additional factors cited by respondents that could facilitate their renewable transition journeys include greater availability or access to renewable resources (33.4%), finance and funding (31.2%) and simpler market structures to ease procurement (25.6%).

You can download a PDF of the study here.