Cleantech
Major US Companies Band Together to Assert Market Demand for Renewables

Looking to increase availability of cost-competitive renewable energy to run their businesses, this week 12 leading US companies signed the Renewable Energy Buyers’ Principles, created by the World Wildlife Fund (WWF) and the World Resources Institute (WRI), to better communicate their purchasing needs and expectations to the marketplace.

The companies — Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter & Gamble, REI, Sprint and Walmart — are hoping the principles will open up new opportunities for collaboration with utilities and energy suppliers to increase their ability to buy renewable energy.

With a combined renewable energy target of 8.4 million megawatt hours (MWh) per year through 2020, the 12 participating companies are seeking a market shift to achieve their sustainable energy goals. Large-scale buyers often have to work around traditional utilities to purchase renewables at competitive prices at the scale they need, increasing complexity and transaction costs. WWF and WRI recognized the need for clearer guidelines and convened the companies to create the Buyers’ Principles.

“These companies are leading the market in creating demand for renewable energy. The Buyers’ Principles provide sound guidance to the market providers,” said Suzanne Apple, SVP of private sector engagement for WWF. “Some of America’s largest companies are embracing renewable energy, and their collective demand requires the market to keep pace.”

The Buyers’ Principles outline six criteria that would significantly help companies meet their ambitious purchasing goals:

1. Greater choice in procurement options
2. More access to cost competitive options
3. Longer- and variable-term contracts
4. Access to new projects that reduce emissions beyond business as usual
5. Streamlined third-party financing
6. Increased purchasing options with utilities

“Supplying renewable energy efficiently enables the scale of deployment necessary to achieve carbon neutral operations,” said Kevin Rabinovitch, global sustainability director for Mars Incorporated. “The Renewable Energy Buyers’ Principles are a powerful way to bring energy suppliers and consumers together, enabling us to work creatively to maximize the inherent benefits that come from clean energy generation with more predictable costs.”

The principles address several major obstacles large companies face in procuring and installing renewable energy. For example, large buyers find current renewable energy markets are complicated to navigate and don’t deliver the products corporate customers are looking for. The sheer volume of renewable energy needed to meet their goals demonstrates both a clear demand and a market opportunity for any provider who can deliver what they need.

“We know cost-competitive renewable energy exists but the problem is that it is way too difficult for most companies to buy,” said Amy Hargroves, director of corporate responsibility and sustainability for Sprint. “Very few companies have the knowledge and resources to purchase renewable energy given today’s very limited and complex options. Our hope is that by identifying the commonalities among large buyers, the principles will catalyze market changes that will help make renewables more affordable and accessible for all companies.”

“These Buyers’ Principles lay the groundwork for partnerships to help energy buyers like us go further faster,” said David Ozment, senior director of energy for Walmart, which already produces more energy through solar power than 38 states, and aims to be completely powered by renewables by the end of 2020. “We know our company’s goal to be supplied by 100 percent renewable energy is good for business and good for the environment. If we can buy renewable energy for less, we can operate for less — and we can pass on the savings and a cleaner energy future to our customers and their communities. We hope others across the energy ecosystem will join us in making these principles a reality.”

The Buyers’ Group is an informal consortium of companies interested in overcoming the obstacles to buying renewable energy and sharing best practices — not a power purchase group. The initial signatories are pioneers, but the group is expanding as more companies recognize the need for market change to seize the opportunities around renewable energy.

The principles evolved from a collaboration between WWF and the Rocky Mountain Institute (RMI) to identify barriers to corporate achievement of renewable energy targets. The groups convened a Corporate Renewable Energy Buyers’ Day in 2013 to prioritize possible solutions — resulting in RMI creating the Renewables Resource Center and WWF partnering with WRI to develop the new Buyers’ Principles.

See statements from more of the corporate signatories here.

Aside from Walmart, several of the signatories are well on their way to achieving aggressive goals around renewable energy:

• Intel topped the EPA’s Green Power list of partner organizations utilizing renewable energy; the company uses biogas, biomass, small-hydro, solar and wind to generate more than 3.1 billion kilowatt-hours (kWh) of clean energy each year.
• REI announced in April it is on track to renewably powering all of its stores and distribution through a combination of renewable energy projects and certified renewable energy certificates.
• And in November, GM announced a partnership with Detroit Renewable Energy that is turning solid municipal waste from the city of Detroit into process steam that will heat and cool portions of GM’s Detroit-Hamtramck assembly plant. When the project is operational, it will supply 58 percent of the plant’s energy needs.