Digging in to Walmart’s Green Power Numbers

on June 06, 2014 at 12:00 PM

President Obama Speaks On Energy Efficiency At Mountain View Walmart

Walmart’s green platform – headlined by the “aspiration” to source 100 percent of its energy from renewables – got major play last month when President Obama used a solar-panel-festooned California store as a backdrop to promote his own efforts to boost clean power and energy efficiency.

But just ahead of the visit, former Labor secretary Robert Reich asked on his Facebook page, “What numbskull arranged this?” and wondered why the president would lend White House credibility to “one of the nation’s largest and worst employers.” Reich’s bewilderment included familiar liberal laments of “low wages, unreliable hours, few benefits, discrimination against women, and anti-union,” but went further – he said Walmart was a lousy renewable energy performer.

“Walmart may be one of the retail industry’s leaders in the use of renewable energy in its stores,” Reich wrote, “but its greenhouse emissions grew 2 percent last year to nearly half a million metric tons, and it lags badly behind other large companies on renewable power, with only 3 percent of electricity from these sources.”

But is Walmart, with its 240 U.S. solar installations as of the end of 2013, a number the company says it will double by 2020, really a renewable energy laggard?

The company claims, on its website, that “24.2% of our electricity needs globally are supplied by renewable sources” (a figure that got rounded up to “about 25 percent” by the New York Times the same morning Reich launched his attack, and then further enhanced by the Times when it noted that nationally, “only about 5 percent of power comes from renewable sources”).

Here’s the thing, though: neither Reich’s nor Walmart’s claims give a full picture of the company’s renewable energy efforts.

True, Walmart participates in the U.S. Environmental Protection Agency’s “Green Power Partnership,” and EPA puts Walmart’s “Green Power Percentage” at 3.3 percent. Other retailers fare a lot better – Kohl’s Department Stores, for instance, checks in at 104.6 percent. Walmart might be aspiring to get to 100 percent renewables by some unspecified date, but Kohl’s announced way back in January 2010 that it had hit that mark.

There’s a bit of a catch, however: Kohl’s has a whopping 156 solar power systems on its stores (of which there are more than 1,100 nationwide), but that accounts for just 2 percent of its green power. The chain climbs to 100 percent renewables and beyond through the purchase of renewable energy credits (RECs), which represent the environmental attributes of a megawatt-hour of renewable energy.

RECs certainly can provide a payoff to renewable energy producers, and but their ability to inspire additional renewable energy production has long been a matter of debate. Walmart says that with its “scale and buying power,” it can do better than buying RECs, spurring new projects by entering into long-term power-purchase agreements (PPAs) with developers. “When Walmart promises to buy the electricity, the project can be built with low-cost financing and deliver electricity at or below non-renewable power prices,” the company says in a paper that explains its approach.

Walmart isn’t alone in this approach; Google, too, eschews large-scale REC purchases, choosing instead to purchase power from suppliers “likely to take our commitment ‘to the bank’ and use it to build new renewable power facilities.”

So Reich’s “3 percent” figure, and his claim that Walmart “lags badly behind other large companies on renewable power,” isn’t wrong, but it doesn’t credit Walmart for a strategy that could arguably lead to more renewable energy development.

But what about Walmart’s 24.2 percent renewable electricity claim?

First, note that this is for its global operations, not just those in the United States. And with it, Walmart includes not only its onsite production and its green power purchases, but also adds in the renewable energy component of the utilities that supply its power.

This can give Walmart a big boost without even trying. Consider Brazil: Walmart has 556 “total retail units” there, and more than 70 percent of country’s grid electricity comes from hydropower. And in Canada, where there are 390 Walmart units, some 60 percent of the electricity comes from hydro.

In the United States, the Energy Information Administration says renewables supply 13 percent of electricity, giving Walmart a solid foundation toward its 24.2 percent claim, and in particular states it can do even better. In California, for example, the three utilities that supply most of the state’s electricity are (as required by law) around 20 percent renewables.

By Pete Danko