The corporates are coming - Smart Energy Decisions

Finance, Sourcing Renewables  -  September 21, 2017 - By Amy Poszywak

Overheard at Climate Week NYC: 'Why wouldn't you set a 100% renewable energy target?'

From left, John Failla of Smart Energy Decisions; Sam Kimmins of RE100; Blaine Collison of Altenex, an Edison Energy company; Gary Levitan of JP Morgan Chase; Cindy Quan of Goldman Sachs; and David Tulauskas of General Motors are pictured following their presentation Sept. 20 at SED's Climate Week NYC affiliate event. 

Energy and sustainability executives from Goldman Sachs, JP Morgan Chase, General Motors, RE100 and Edison Energy on Sept. 20 uniformly predicted a continued acceleration of corporations turning to renewable energy to power their operations. 

Smart Energy Decisions organized the event, which was sponsored by Altenex, an Edison Energy company, to present and discuss key findings of its recently released report, "Post-Paris: The State of Corporate Renewable Energy Sourcing." John Failla, Smart Energy Decisions founder and editorial director, presented the report's key findings, which reveal that the market for corporate renewable energy purchasing is widening as wind and solar costs continue to decline, corporate sustainability commitments grow and mechanisms for making purchases evolve. 

As prices for wind and solar technologies reach all-time lows, the economics for corporate investments are better than they've ever been, panelists said. 

"Using renewable energy to meet your electricity needs just makes business sense today, in so many markets," GM director of sustainability David Tulauskas said. "We're finding opportunities to be cash positive from day one when we start using the renewable energy. So that's a huge factor, and I would say it should be considered a mainstream option today."

The pace of cost declines in recent years has dramatically changed the conversation about renewable energy at most companies, according to Sam Kimmins, who heads RE100, an initiative led by global nonprofit The Climate Group and CDP that helps companies set 100% renewable energy targets. 

"I've been going through a lot of our documents over the past few months and just crossing out anything about Paris, 2 degrees, 1.5 degrees, etc., because it turns people off and it's no longer necessary," Kimmins said. "The fact is the economic arguments are enough, in most places, to convince companies to go renewable." 

Climate Week event attendees

Vanessa Rothschild, vice president of global sustainability controlling and Kyle Hopkins, energy specialist for H&M alongside Samantha Lewis, manager of energy and sustainability for Ralph Lauren at SED's Climate Week affiliate event Sept. 20 in New York City. 

Asked how their personal experiences are reflected in the SED report,  each of the panelists eventually turned to the portion of the study that addressed the relationship between companies and their utilities on the topic, with the general consensus describing a significant shift in attitudes from some utilities in their willingness to help their commercial and industrial customers meet their energy-related sustainability goals.

Cindy Quan, vice president, environment, social and governance team at Goldman Sachs, said her company has had an ongoing dialogue with its utility that began in the beginning of this year with the utility coming to them to ask why corporates like Goldman were so interested in doing power purchase agreements for renewables.

"We had an open dialogue around the fact that we all have sustainability goals, and so at the end of this, we're not competitors in this space," Quan said. "We're all peers, we want to be able to do the right thing for the environment and the earth that we live on, so how can we do that? So I think they're getting there ... and they obviously have a lot more hurdles, regulations that they need to get to, but they want to be able to provide an interesting solution to their major customers."

For most companies, the ideal solution for buying renewable energy is one that is far less complicated than those available today. Having a single bill every month from your utility where you would see a single line item for renewable energy that is either a credit or debit would make purchasing a lot easier for businesses, Quan said.

"Eventually, hopefully, there will be different optionalities and solutions that we'll be able to choose from," she said.

If and when those solutions arrive, and if engagement on the part of utilities to help their C&I customers continues to grow, that could lead to a big acceleration of renewable energy use among corporates, according to JP Morgan's Gary Levitan, vice president of global sourcing for energy and sustainability. Levitan also said the arrival of big banks such as his own, alongside Goldman, and most recently Citi and Morgan Stanley, to the 100% renewable energy club, is likely to boost confidence for other business sectors to take the same path. 

"The big banks are here," he said. "Every time a bank makes a commitment to 100% renewable energy, I think it validates the economics to the broader market." 

Given all the momentum, when asked where things will stand in a year, Tulauskas made a bold prediction: "You're going to double the number of RE100 companies by this time next year. Given where things are today, why wouldn't you set a 100% renewable energy target? Why would you set a 50% target?" 

Blaine Collison, managing director at Altenex, reflected on the dramatic change in the space he has seen since he first began working with C&I companies on renewable energy, prior to joining Altenex, during his tenure with the U.S. EPA's Green Power Partnership program. 

"The industry has evolved in amazing and incredible ways," he said. "The original thinking around the Green Power Partnership and this notion of voluntary renewables was 'can we leverage the market and the discretionary buying power in the market to accelerate renewables? Can we drive additionally, can we drive transactions such that they result in a wind farm or solar project where there wasn't one before?' The answer at the outset was 'well, maybe, we think so," but here we are now, and the answer is 'absolutely, yes.'"

That evolution, he said, is the most exciting thing about working in the space, in addition to seeing all types of players come on board to help, utilities in particular. 

"The companies that you see here, and the companies in RE100 and all the other networks, they are coming to the market to build renewables, or to have someone build renewables for them," Collison said. "This is about putting new steel in the ground, faster, better, stronger, and let's go, and that's incredibly powerful." 

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