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Companies Commit to Renewable Energy Goals

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Corporate entities account for around two-thirds of the world’s final energy consumption and will continue to account for more than half by 2050, as estimated by the International Renewable Energy Agencyʼs REmade Index under the Clean Energy Ministerial’s Corporate Sourcing of Renewables campaign. As companiesʼ demand for clean energy increases, they have the potential to play an important role in driving investment towards renewable energy goals.
Renewable electricity supply also offers a hedge against the risk of long-term fuel cost inflation. In addition to the benefit of costs below the average grid tariff price, business consumers can also sell the renewable electricity they produce at preferential tariffs, where available.

Corporations set renewable energy goals

Since the mid-2000s, more and more companies in a variety of industries across different sectors have committed to ambitious renewable energy targets and have begun to source renewables to run their operations. By early 2018, more than 130 leading global corporations with operations across 122 countries had joined the RE100 initiative, a network of corporations committed to using 100% clean energy.
Initially, many companies considered the adoption of renewable energy solutions to be mainly an act of corporate social responsibility. Meeting internal environmental and social objectives such as greenhouse gas emission reduction targets, and addressing the growing demand for corporate sustainability from investors and consumers, continue to be key drivers for corporate sourcing.
In recent years, however, significant reductions in renewable energy costs, as well as maturing market and policy environments, have made renewables cost-competitive and attractive sources of energy in their own right. For corporations, the economic benefits of sourcing renewables may also include long-term price stability, security of supply, reduction of energy-related expenses and the possibility of new business opportunities.

Clean energy in India

Clean energy is increasingly making business sense for companies in India. Electricity prices in India are growing steadily, due to a combination of different factors including fuel shortages, infrastructure issues and uneven pricing and regulation from state to state. By contrast, clean energy consumed from own installations or procured via power purchase agreements (PPAs) from a third party generator is already cost competitive compared with electricity tariffs in several states.
For governments, some of the drivers to encourage and facilitate corporate sourcing of renewable energy include compliance
with national and international climate targets, job creation and economic growth through new investment, as well as other
socio-economic benefits.
For most corporations, electricity generation and/or complex power sourcing options are not part of their core business.
Signing a long-term PPA or investing directly in a renewable energy system requires expertise that many companies do not have. In response to rising corporate interest in renewable energy sourcing, several initiatives have been established to recognise and further support the development and pursuit of ambitious renewable energy goals through various sourcing options.
The RE100 campaign, under The Climate Group and CDP, gathers some of the world’s most influential businesses that
are committed to sourcing 100% renewable electricity. Through events and webinars, the initiative seeks to support members in reaching their targets and going beyond them by also engaging their supply chains.
Another successful initiative is the Renewable Energy Buyers Alliance, which brings together buyers, suppliers and policy
makers to identify and remove barriers related to purchasing renewable energy. First established in the United States by
Business for Social Responsibility, the Rocky Mountain Institute, the World Resources Institute and the World Wildlife Fund, the network is now active in Australia, China, India, Mexico and Vietnam.
A similar network, the RE-Source Platform, focuses on the European renewable energy market (at both the EU and national levels) and was launched in 2017 by SolarPower Europe, WindEurope, RE100 and the World Business Council for Sustainable Development.
The potential for corporate sourcing of clean energy in Europe is significant and largely untapped. This is the first multi-stakeholder platform in Europe bringing together the interests of both buyers and sellers, to unlock the potential of new business models, accelerate meeting of clean, affordable renewable energy goals and help combat climate change.