US blue-chip companies are setting increasingly ambitious clean energy targets for the next decade, a report has shown.
The Corporate Eco Forum and World Wildlife Fund last month published the report, called ‘Corporate Renewable Energy Procurement: A Snapshot of Key Trends’ to analyse the attitudes of major US firms to buying power from clean sources. This is based on a three-month survey of 37 blue-chip companies with combined sales of $1trn.
The results are broadly positive for those working in wind.
The report’s key findings confirm that there is an increasing commitment of US firms to invest in renewables – and they are growing in confidence when it comes to buying electricity directly from wind farms. This is also a trend that is affecting our fifth-annual Top 100 Power People report, which is out tomorrow.
The 37 companies surveyed said they planned to achieve their renewable energy targets using more wind energy that solar.
Wind energy purchased through power purchase agreements, virtual PPAs and on-site projects is the favoured channel by which the surveyed firms seek to satisfy their renewable energy needs.
Wind accounted for more than one-third of total renewable energy procurement this year across all examined sectors, and it was considered the preferred renewable power source for 54% of the companies participating in the survey. This is because wind energy delivers the shortest payback period: investments in wind can take less than six years to be recovered.
We have seen this interest recently as Amazon set out plans in September to open a 253MW wind farm in Texas next year, its biggest renewable power project to date. It followed this last week by announcing plans for a 189MW wind farm in Ohio.
And the falling costs of wind power will only help to make the financial argument stronger, both inside and outside the US. This isn’t just about the environment. It’s about good business sense.
Companies were also most likely to procure wind power directly, through PPAs and by investing in on-site projects, which represented nearly two-thirds of renewable energy purchases.
But the report is not wholly positive. It also analyses the corporate interest in the Clean Power Plan, which is set to commit US states to emissions reductions targets from 2020. Eighty-two percent of the companies surveyed said they would like to encourage states to design programmes that can meet the needs of corporate energy buyers while also complying with the CPP.
However, 79% said they wanted more information on whether to support the CPP, which shows that there is a knowledge gap existing around the plan and how it will impact on their renewables strategies. Such lack of insight about the CPP is understandable at this point as the plan is still stuck in the US court system.
Overall, though, the survey presents an encouraging picture of the US renewable energy environment, despite the limitations of the data: 37 companies surveyed is a small sample and, as the companies surveyed are Corporate Eco Forum members and Renewable Energy Buyers’ Principles signatories, they are more likely to be sourcing renewable energy than other companies.
But the survey suggests that interest in renewable energy from the US private sector will only keep growing. Continued cost-cutting in wind and the extension of the expiry date for the federal renewable electricity production tax credit will definitely be significant if the US pushes hard to meet the targets set in the Paris Agreement.
That latter agreement came into effect on Friday and US firms, or at least some of them, seem to be ready to make all the effort needed to combat climate change.
And the other big unknown is the US presidential election. The result of this would not be enough to de-rail the wind sector on its own, but the future for renewables will look very different under President Clinton or President Trump. If the US ends up with an anti-renewables president then we will need corporates including Amazon to play an even bigger role in leading on green issues.
On that matter, at least, the wait is nearly over.
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