Companies are at the leading edge of wind globally, not least in the US. Starbucks recently sent a joint letter with 18 other US companies to Congress to request an extension of the Production Tax Credit which has helped grow installed capacity.
Ben & Jerry’s, Clif Bar, Johnson & Johnson, Levi Strauss & Co, The North Face, Sprint, Starbucks, Symantec, Timberland and Yahoo! are just a selection of household corporate names that understand the value of a sustainable wind industry to the consumer and the bottom line.
“For consumers of wind electricity, the economic benefits of the PTC are tremendous. The PTC has enabled the industry to slash wind energy costs – 90% since 1980 – a big reason why companies like ours are buying increasing amounts of renewable energy,” the companies wrote in the letter.
“Extending the PTC lowers prices for all consumers, keeps America competitive in a global marketplace and creates homegrown American jobs.”
Starbucks is one of the 120 US companies that participated in this year’s Corporate Renewable Energy Index (CREX) for Vestas Wind Systems compiled by Bloomberg New Energy Finance.
CREX shows that Starbucks last year procured 47% of its energy use from clean sources, the equivalent of 421,535 MWh of its total demand of 900,124 MWh, an upward trend that is going to continue as part of its business strategy.
Ben Packard, vice president of global responsibility at Starbucks, said: “We’re proud to be one of the nation’s largest purchasers of American wind energy. We’re committed to renewable energy. Our goal is to make renewables account for 100 percent of our energy portfolio in the next two years.”
US companies participating in CREX have increased renewable energy as a percentage of total electricity consumption from 8% in 2009 to 10% in 2011.
Government-mandated renewable energy purchases are usually well tracked for compliance. But this year’s CREX turns a welcome lens of transparency on to corporate demand for voluntary clean power procurement.
“Much of the demand for renewable technologies has been driven by specific energy policies,” wrote Morten Albæk, global senior vice president at Vestas and Michael Liebreich, chief executive officer of Bloomberg New Energy Finance.
“But there is also a growing awareness of the benefits of generating and using clean energy over and above the incentives provided by government, especially among corporate energy users.”
Results from the 300 companies in this year’s CREX show that 30% use less than 5% renewables. But 35 companies said they sourced all their electricity from renewable sources, largely by purchasing Renewable Energy Certificates (RECs) to cover their power usage.
REC purchases accounted for 43% of the renewable energy procured by US technology companies, followed by nearly 14% through green pricing programs and 12% through on-site or direct equity investment.
Direct Investment Leaps
More than 12% of the renewable energy used by US technology companies came from direct investment in 2011.
In 2011, Google invested more than $915 million in renewable energy. This included investments in projects capable of producing 1.8 GW of electricity to power 350,000 homes.
Rick Needham, director of energy & sustainability at Google, said: “(Renewable energy is) a way of helping us to diversify our cash, put it into businesses that can earn good returns and that aren’t correlated to other investments.”
Consumer-facing companies tend to place a premium on a strong positive marketing message on energy usage. Twenty-one corporations in the US, including Kohl’s, Whole Foods Market, Adobe Systems, and Green Mountain Coffee Roasters, powered their businesses 100% with renewable electricity.
Kimberly-Clark topped the table of green power procurement with 5.3 TWh purchased from a total of 22.3TWh.
Suhas Apte, vice president of global sustainability at Kimberly-Clark, said: “Purchasing RECs for our Dallas headquarters demonstrates another step in our commitment to avoiding greenhouse gas emissions, supporting renewable energy technologies, and contributing to a clean energy future.”
Technology Leads Renewable Energy Adoption
According to the 2012 Global Consumer Wind Study, renewable energy accounted for 24% of the total electricity consumption by US corporations in the technology sector – well above the 5% average for US corporations as a whole.
The technology sector led on green power procurement: Intel Corporation (2.5TWh), Kohl’s (1.4TWh), Microsoft Corporation (1.1TWh), IBM (518,000MWh), Hewlett Packard (442,000MWh), Cisco (358,000MWh), Citigroup (234,080MWh), BNY Mellon (227,347MWh) and Google (103,403MWh).
Twenty percent of US technology companies noted sustainability targets and reducing carbon footprints as the key reasons for their investments. Increasing employee motivation and retention (16%) and influence from customers (8%) were also mentioned.
Intel, the US-based semiconductor chip manufacturer, has been the largest voluntary purchaser of green power in America, according to the Environmental Protection Agency.
Intel increased its renewable electricity usage by 75% in 2011, from 1.43TWh to more than 2.5TWh, representing approximately 85% of the company’s US energy consumption, the report found.
Paul Otellini, Intel President and CEO, said: “We have a long history of commitment to the environment and energy efficiency is an important consideration in everything we do, from building transistors to designing microprocessors and running our factories. Our renewable purchase is just one part of a multi-faceted approach to protect the environment, and one that we hope spurs additional development and demand for renewable energy.”
Around 41% of US corporations plan to maintain their current rate of renewable energy procurement, while 56% of corporations plan to increase these investments in the future.
Regulatory Reservations
But the vast majority of the six focus countries – Germany, the UK, Brazil, India, Australia and the US – said that regulatory support had a moderate or significant impact on procurement decisions.
According to the report: “In all [six focus] countries there are companies calling for an expansion in regulatory support for renewable energy. Clearly governments and policy makers play a significant role in enabling renewable energy to grow by setting up the conditions in the market.”
Forty-one percent of US corporations responding to the CREX report said decisions to investment in renewable energy are driven by chief executives and board directors.
For them, regulatory uncertainty for renewables will be front of mind, particularly in the wind sector from which most of the RECs derive and trade for as little as $1 on the voluntary market.
Procurement of green power is a relatively efficient means of hedging against future volatility in electricity prices while fulfilling companies’ green promises to consumers through the purchase of RECs.
But if the wind industry crashes next year with the expiration of the PTC from an estimated 12 GW this year, to 2 GW next year, so too will the supply of RECs, potentially making it more expensive to meet consumer expectations for Starbucks and other companies with green aspirations.
This piece appears on Breaking Energy as part of the Energy Transparency series in partnership with Vestas.
