Corporate Renewable Energy Sourcing: Trends and Transformations
The global trajectory towards renewable energy has witnessed a significant push from corporate stakeholders. Many companies, driven by both ethical considerations and long-term cost-effectiveness, are advancing their efforts in procuring and producing renewable energy. This commitment to greener alternatives is shaping electricity markets worldwide.
The Expanding Corporate Renewable Market
As of the close of 2017, the corporate renewable electricity market had burgeoned to a staggering 465 TWh. This figure constitutes about 3.5% of the entire electricity demand stemming from the commercial and industrial sectors. Such estimates emerge from comprehensive market data and extrapolations from reports submitted by approximately 2,400 firms.
Corporate Sourcing Mechanisms
1. Self-Generation through DERs
Distributed Energy Resources (DERs) stood as the dominant channel for corporate renewable sourcing. The decentralized nature of DERs offers corporations direct control over their energy production and consumption.
2. Energy Attribute Certificates (EACs)
Unbundled EACs are another popular mechanism, allowing companies to authenticate their renewable energy consumption without direct generation or procurement.
3. Power Purchase Agreements (PPAs)
Many companies are signing PPAs with independent power producers. These long-term contracts ensure a consistent supply of renewable energy at negotiated prices.
4. Green Electricity Procurement
In addition to the above, direct procurement of green electricity from providers is a straightforward strategy employed by various corporates.
Renewable Energy for Self-Consumption
For self-consumption, the renewable energy production recorded was an impressive 165 TWh in 2017. This chiefly derives from distributed energy resources, facilitated by policies and compensations in numerous countries. By 2016, a significant 83 countries had implemented Feed-in Tariffs or premium payment policies, and 55 nations had instituted net metering policies.
Off-Grid Renewable Energy Solutions
Beyond the grid, corporations are also recognizing the potential of off-grid renewable energy. Particularly for businesses operating in secluded regions, such as mining companies, renewable off-grid solutions present an attractive and stable energy supply alternative.
Corporate engagement in the renewable energy sector underscores a broader shift towards sustainable practices in the business world. Whether through self-generation, PPAs, or off-grid solutions, companies are demonstrating that a commitment to green energy is not just ethically sound but also commercially viable. As policies continue to evolve and the renewable energy sector grows, it’s expected that more corporations will join the green energy revolution, further cementing renewables as the future of global energy.