Corporate sourcing of renewable energy booms worldwide
Businesses in 75 countries worldwide directly sourced 465 TWh of renewable electricity last year – nearly the same amount as the overall energy demand for France – according to the new Corporate Sourcing of Renewables: Market and Industry Trends report from the International Renewable Energy Agency (IRENA).
As the cost of renewables continues to fall, corporate demand for renewables will further increase in the future, the report suggests, as companies seek to reduce electricity bills, hedge against future price spikes and address sustainability concerns.
The report, presented at the Clean Energy Ministerial in Copenhagen, is the first global assessment of trends and policies in the corporate sourcing of renewables. It sets out the case that renewable energy sourcing by private sector companies, made possible with the right policy framework, can be a key factor as the world strives towards a sustainable energy transformation in line with the objectives of the Paris Agreement.
The 2,400 large companies analysed in the study are ‘voluntarily and actively procuring or investing’ in self-generation of renewable electricity for their operations. Of them, more than 200 source at least half of their power from renewables, with electricity self-generation named as the most common sourcing model, followed by unbundled energy attribute certificates and power purchase agreements (PPAs).
‘Corporations are responsible for around two-thirds of the world’s total final electricity demand, making them central to, and key actors in, the energy transformation,’ said IRENA’s Director General, Adnan Amin.
‘As governments all over the world recognise this vast potential, the development of policies that foster and encourage corporate sourcing in the electricity sector and beyond will inject additional needed investment into the renewables sector,’ he added.
The report also finds that the majority of renewable electricity was consumed in the materials sector, while the highest shares of renewable consumption were found in the financial (24%) and information technology (12%) sectors. The bulk of corporate sourcing was accounted for by countries in Europe and North America.
Of the companies analysed in the report, only 17% have established a renewable electricity target, with three-quarters of those targets expected to expire before 2020. This presents a significant opportunity for companies to develop new medium-to-long-term renewable energy strategies and targets that factor in improvements in renewable energy technology and cost declines, the report days.
In related news, some of the world’s biggest companies and corporate energy buyers have joined forces with a European clean energy platform to unlock ‘huge untapped’ renewable energy sourcing opportunities in Europe.
Companies including Google, Microsoft, IKEA Group, BT, Danone and Facebook have become members of the Re-Source Group Platform; an alliance which aims to raise awareness and accelerate renewable investments between clean energy buyers and suppliers, and corporate renewable PPAs.
Last year, Re-Source signed more than 1 GW of PPA deals in Europe, which the Platform’s representatives say has provided major corporate buyers with ‘reliable and competitively-priced power’.