A rapidly growing group of ambitious multinational businesses are actively reshaping the energy market through their global investment decisions and accelerating a zero emissions economy, a new report released on Tuesday, January 23 2018, shows.
“Approaching the tipping point: how corporate users are redefining global electricity markets”, a new report from RE100 – a global corporate leadership initiative led by The Climate Group in partnership with CDP – tracks progress made in 2016-17 by companies committed to 100% renewable power.
The report also provides insight into emerging trends in corporate sourcing of renewables around the world, with 122 RE100 members operating in 122 countries averaging 1.3 times more renewables in their electricity mix than the global rate of renewable electricity use.
Thanks to falling costs of renewable energy technology, there is a notable shift away from renewable energy attribute certificates towards direct contracts with suppliers, as well as onsite generation and offsite grid-connected generators (power purchase agreements, or PPAs) – meaning that increasingly, members are directly growing renewable energy capacity.
Specific findings in the report include:
- 25 members had reached 100% renewable electricity by the end of 2016, with Autodesk, Elopak, Interface, Marks and Spencer and Sky reaching this goal during 2016, while Equinix and Kingspan surpassed their interim targets during the same year;
- The biggest achievers in 2016 included Bank of America, Astra Zeneca and Coca Cola Enterprises Inc., whose share of renewable electricity increased more than threefold;
- The proportion of renewable electricity being sourced via power purchase agreements grew fourfold in 2016, while the quantity of electricity sourced from onsite generation increased x15 (via supplier-owned projects) and x9 (via member-owned projects);
- 88% of respondents cited the compelling economic case for renewable electricity as a major driver – with 30 out of 74 reporting that renewable electricity was either cost competitive or delivered significant savings on energy bills;
- Policy barriers represent the most common challenge for RE100 companies, alongside a lack of availability of suitable contracts or certificates in some markets.
The report comes as government and business leaders gather at the World Economic Forum Annual Meeting in Davos, Switzerland, to discuss pathways to a sustainable economy, and a few days after Nike signed its second major wind contract, in Texas, US, that will take the company more than half way to reaching 100% renewable electricity globally as part of RE100.
Helen Clarkson, Chief Executive Officer, The Climate Group, said: “I’d like to congratulate every RE100 member accelerating the roll-out of renewable energy through their investment decisions. Their leadership is vital for overcoming policy challenges, shifting global markets, and inspiring many more companies to reap the economic benefits of renewable electricity. Rapidly growing demand from world-leading RE100 companies – and increasingly their suppliers and peers – means governments can confidently look to ratchet up targets in 2020 for slashing greenhouse emissions, to deliver on the Paris Agreement.”
Paul Simpson, Chief Executive Officer, CDP, said: “CDP data shows a jump in renewable energy procurement and that motivations are not only environmental but economic. With nearly 90% of companies driven by the economic case for renewables, this demonstrates a fast approaching tipping point in the transition to a zero-carbon economy. These companies prove that energy is becoming a board level issue across the globe and sustainability is essential for future business security. Now, it’s time to tip the balance and make 100% renewable the new normal.”
The report also shows key findings by region:
- In Europe, renewable energy has been the main source of electricity for RE100 members for the second year running. However, the lucrative PPA market is largely untapped; EU policy makers have an opportunity unlock its full potential through the next phase of the Renewable Energy Directive;
- In the US, we have seen a major increase in the use of PPAs by RE100 members, with continued momentum on renewable electricity sourcing by major businesses, despite political uncertainty;
- In India, the amount of renewable electricity consumed by our members has more than tripled, thanks to falling costs. The diversity of ways in which companies are sourcing renewables has also increased.
The leading global food company Danone is targeting 100% renewable electricity by 2030 (50% by 2020). In September last year the company revealed its new evian bottling site in France, the largest food production site to achieve carbon neutrality and completely powered by renewable electricity.
Katharina Stenholm, Senior Vice President and Chief Cycles and Procurement Officer, Danone, said: “The transition to renewable electricity is a key lever to help Danone strengthen efficiency and achieve our commitment to being carbon neutral by 2050. Our first milestone will be to reach 50% of renewable electricity by 2020. We are therefore delighted to join the RE100 initiative. We look forward to working with other companies to show that green energy is good for the environment and good for business.”
British consumer goods group Reckitt Benckiser Group plc – which owns “Powerbrands” such as Durex, Air Wick and Dettol – has also committed to sourcing 100% renewable electricity by 2030.
Hatsun Agro Products Ltd, India’s largest private dairy, has committed to a 2032 target. Already sourcing over 80% of its global electricity consumption from renewable sources, the company aims to reach 100% by investing in solar and wind energy and converting diesel generators into lithium storage batteries for maximising its use of renewable power.
RG Chandramogan, Chairman and Managing Director, Hatsun Agro Products Ltd, said: “Our mission to leave the world in a better place for future generations is at the heart of our business strategy. That’s why we’ve joined the global RE100 campaign alongside other forward-thinking companies, in our commitment to source 100% renewable electricity – by 2032. Thanks to our investments in wind and solar power, we’re already more than 80% renewable. We hope that many other businesses follow suit.”
RE100 now brings together 122 global companies, with a collective revenue of over $2.75 trillion and operations spanning six continents. Together they represent over 159TWh of demand for renewable electricity – more than enough to power Malaysia, New York State or Poland, and equivalent to the 24th largest electricity demand of all countries.