The Coronavirus
pandemic has provided
companies an opportunity to pause and reflect, and to better understand what’s
important to stakeholders. In acknowledging the need to put people first, many
companies have promised to help build a better future as the world recovers.
Tackling climate change is a central tenet of many post-COVID corporate
strategies. More than 1,500
companies
have now set targets to reach net-zero greenhouse gas emissions — that’s triple
the number that had done so by the end of 2019.
To get there, businesses will need to embrace renewable
energy.
The good news is that, as the latest Global Renewables
Outlook
suggests, renewable energy can fuel a more “equitable and resilient world.”
Renewable energy makes good business sense
Carbon dioxide emissions related to energy generation have continued to rise by
1 percent a
year
since 2010. The pandemic might have suppressed emissions in 2020, but a rebound
may only restore the long-term trend. A transition to more renewable energy —
coupled with greater electrification and better energy efficiency — will help
drive sustainable development, boost well-being and create tens of millions of
new jobs: 42
million
of them by 2050, in fact, according to IRENA.
The transition is already well underway. Thanks to lower interest rates, and
declining costs of technologies such as solar photovoltaics and offshore wind,
renewable energy is booming. Today, 42 percent of Germany’s electricity
demand is being met by wind and solar
alone, for
example.
A recent collaboration between Shell Energy North America (US),
L.P.;
its wholly-owned subsidiary and retail electric provider, MP2 Energy,
LLC; and Wells
Fargo
provides a good example of how the corporate world has responded to the evolving
market — and how using renewable energy just makes good business sense.
Delivering community benefits
Under an innovative
arrangement,
Wells Fargo made a long-term commitment to purchase approximately 150,000
megawatt hours annually of renewable energy from Shell Energy and MP2 Energy for
1,200 Wells Fargo properties.
Through its purchase, Wells Fargo supported Shell Energy’s transactions with
solar facilities in Virginia and California. Those transactions enabled
the construction and operation of four new solar facilities that provide
renewable energy to the
CAISO and
PJM grids. Shell Energy is purchasing the renewable
energy certificates (RECs) generated by the facilities, and Wells Fargo receives
substitute national Green-e®-certified RECs from other facilities.
While 150,000 MWhs only represents 8 percent of its global electricity needs,
the Shell transaction is an important one for Wells Fargo in meeting its
renewable energy goals.
“We want to support the development of net-new renewable energy assets in a way
that also delivers community benefits — like job creation, tax revenue, lower
carbon emissions and grid resiliency. And we want to do it in locations where we
have a business presence,” says Mary Wenzel, Executive Vice President, Head
of Sustainability and Corporate Responsibility at Wells Fargo & Company.
The use of renewables is not new to the bank: It has been meeting 100 percent of
its annual global electricity needs with renewable energy since 2017, largely
through the purchase of RECs.
Going further
Now, Wells Fargo is keen to go further by transitioning to a higher mix of
long-term renewable energy contracts and significantly increasing deployment of
on-site generation. This will support the development of net-new sources of
renewable energy by the end of 2020.
It is already making progress. Last year, Wells Fargo agreed to buy the
equivalent of 100 percent of its power needs at 400 of its locations in
Texas from a new solar plant in Texas. It also entered into a unique
subscription agreement with the Salt River Project Agricultural Improvement
and Power District to receive around 6 MW of a new 100-MW solar project in
Arizona.
“We’re currently curating a network of location-based transactions
and increasing deployment of on-site generation where we can. So, there will be
more to come,” Wenzel adds.
Of course, as a lender, Wells Fargo also has a key role to play in supporting
the growth in renewable energy. Since 2006, it has become one of the most
prominent investors in the renewable energy space, providing more than $8
billion in tax equity financing, supporting more than 400 projects. By the close
of 2019, its tax equity investments represented more than 10 percent of all
solar and wind generation capacity in the US.
New consumer demands
As for Shell Energy, one of North America’s largest wholesale electricity
providers, the collaboration with Wells Fargo is yet another example of how
traditional energy businesses continue to diversify.
“More and more companies are interested in developing unique sustainable
solutions,” says Troy Doughman, Vice President of Sustainability Solutions
at Shell Energy North America. “With more than 1/3 of our managed power
portfolio coming from renewable sources, we’re proud of our ability to be able
to provide creative solutions to meet our customers’ needs.”
When you think about companies that need to implement renewable energy
solutions, financial institutions such as Wells Fargo might not immediately
spring to mind. But the very transactional nature of the finance sector demands
significant energy consumption.
“Wells Fargo and Shell Energy working together,” Doughman says, “reinforces the
proposition that our approach and services benefit highly transactional
companies — and their sustainability goals.”
Finding new ways of working
Innovation in renewable energy is gathering pace. Despite the economic
disruption caused by the pandemic, governments and businesses continue to back
new technologies — as Fatih Birol, Executive Director of the International
Energy Agency, has pointed
out.
But the world’s decarbonisation agenda is less about technology and more about
partnership, collaboration and cooperation. The agreement between Shell Energy
and Wells Fargo is testament to a desire for new ways of working to meet shared
objectives, and we will need many more such collaborations if the renewable
energy revolution is to truly deliver in building the resilient and sustainable
world we need.
The companies in which Royal Dutch Shell plc directly and indirectly owns
investments are separate entities. In this article, the expression “Shell” is
sometimes used for convenience where references are made to those entities
individually or collectively. Likewise, the words “we”, “us” and “our” are also
used to refer to Shell companies in general or those who work for them. These
expressions are also used where no useful purpose is served by identifying
specific companies.
Shell Energy: Delivering Renewable Solutions
As the importance of the energy transition becomes more pronounced,
corporations are taking significant steps to transform their business and
adopt renewable energy to reduce their carbon footprint. Embracing a
net-zero strategy cannot be done alone though and requires a collaborative
effort between corporations and energy providers. Shell Energy has a variety
of solutions to help all types of businesses, from small to large, across
all industries meet this rising expectation, as well as takes a highly
collaborative approach to ensure businesses have both the knowledge and
solutions readily available to meet their sustainability goals.
END-TO-END SOLUTIONS AT A GLANCE
Solutions Guide for Enterprises
TALK TO AN EXPERT
Contact Shell Energy
Get the latest insights, trends, and innovations to help position yourself at the forefront of sustainable business leadership—delivered straight to your inbox.
Content creator extraordinaire.
Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.
Published Oct 21, 2020 8am EDT / 5am PDT / 1pm BST / 2pm CEST