2019: A Banner Year for Corporate Renewable Energy - Smart Energy Decisions

Solar, Sourcing Renewables, Wind  -  December 13, 2019 - By Caitlin Marquis, AEE

2019: A Banner Year for Corporate Renewable Energy

Corporate renewable energy procurement is no longer a new trend. Commercial and industrial (C&I) customers have become an important slice of the overall market driving renewable energy development.  While increasingly mature, the C&I market for renewable energy is far from static. In this column, Advanced Energy Economy (AEE) provides a look back at key trends from the past year and a look ahead at what 2020 might hold.

It was another record-setting year for corporate renewable energy agreements. According to the Renewable Energy Buyers Alliance, which keeps a tally of C&I projects, corporate purchasers had signed more than 7 GW of deals as of October 2019, up from last year’s record of 6.4 GW. Analysis from Wood Mackenzie and the American Wind Energy Association indicates that this trend is unlikely to slow down, with a projected 85 GW of demand for renewable energy among C&I customers through 2030.

Utility renewable energy offerings continue to proliferate. New renewable energy programs proposed and/or approved in 2019 include Georgia Power’s Customer Renewable Energy Supply Procurement (CRSP) program, Florida Power & Light’s SolarTogether, Duke’s Green Source Advantage in North Carolina, and Portland General Electric’s Green Future Impact program in Oregon. Compared to the mixed success of the first few utility green tariffs introduced in 2013, these newer programs have a higher overall participation rate, and some have been fully or even over-subscribed.

Some of these new programs have met customer needs by borrowing from tried-and-true models. Georgia Power’s CRSP program, for example, is based on the utility’s earlier and successful C&I Renewable Energy Development Initiative (REDI), which was fully subscribed. Other utility programs, including PGE’s Green Future Impact, have taken an approach that borrows heavily from the REDI program. Yet programs such as SolarTogether, with more than 1 GW subscribed by C&I customers at the time of proposal, have taken new approaches to program design. In SolarTogether (still pending approval), the program assigns costs and most of the benefits to participants, yet allows nonparticipating customers to enjoy some of the benefits from the new, cost-competitive solar energy as well. (Utilities still looking to hop on the bandwagon can refer to a prior post by AEE in Smart Energy Decisions, which walks through the steps for successful program implementation.)

Companies have stepped up their engagement on policy at the state and federal level. Weighing in on clean energy policy is not new for corporations. Tech giants Amazon, Apple, Google, and Microsoft supported the Obama Administration’s Clean Power Plan in 2016 with an amicus brief, hundreds of companies offered support for the Paris Climate Agreement in 2018, and companies have provided their two cents on a range of state policy issues over the years. But it is also clear that interest in policy has scaled up with growing market activity.

 This past year saw companies weighing in to support corporate access to advanced energy in Indiana, to ask regulators to approve an ambitious green tariff in Georgia, and to reject a gas-heavy resource plan and a poorly designed green tariff in Virginia, and much more. The Advanced Energy Buyers Group, a coalition of leading C&I customers facilitated by AEE, engaged on an even broader range of issues in 2019, from transmission policies before the Federal Energy Regulatory Commission to direct access in California, climate policy priorities in Congress, and potential wholesale market participation by Colorado’s electric utilities. Some of these issues may seem far removed from the direct purchasing interests of companies, but sophisticated buyers increasingly understand the impact policy decisions have on the cost and speed of their own clean energy transition.

Companies are complementing their renewable energy procurements with other technologies to meet their overall energy needs. With price and performance improvements occurring rapidly across a range of advanced energy technologies—from electric vehicles to energy storage and other distributed energy resources (DER)—and new participation and business models emerging, C&I customers are increasingly looking beyond renewable energy as they seek to lower their emissions and meet their energy needs cost-effectively.

As we wrote  in Smart Energy Decisions earlier this year, C&I customers have been taking steps toward electrifying their vehicle fleets, a trend most notably exemplified by Amazon’s blockbuster announcement that it would buy 100,000 electric delivery vans from start-up Rivian. Energy storage is also poised for enormous growth in the C&I sector; according to Navigant Research, the C&I battery storage market could reach $10.8 billion globally by 2025, up from less than $1 billion in 2016. One advanced energy technology that hasn’t yet sparked interest among C&I companies is offshore wind—although activity in the more mature European market indicates that this may be something to look for in years ahead.

What will the year ahead bring for corporate customers? While we don’t have a crystal ball, we do expect a doubling down on the trends we saw in 2019: continued renewable energy procurement, new green tariffs from utilities, expanded policy engagement by C&I customers, and increased focus on non-renewable advanced energy technologies like DERs, storage, and electric vehicles. There are also some headwinds to watch out for: phasedown of federal tax incentives and potential changes in market rules for the large mid-Atlantic states regional grid (PJM Interconnection), for example, may slow the pace of renewable energy procurement.

However, there are also some positive trends that could increase investment in other technologies. For example, the rollout of FERC’s Order 841, which will create new opportunities for energy storage—including customer-sited energy storage—to participate and earn revenue in wholesale markets. We may also see renewed interest in a “greening the grid” strategy, whereby companies engage in support of increased ambition at the utility, state, and/or federal level to accelerate the transition to a cleaner electricity system for all customers, including themselves, their customers, their employees, and their suppliers. Of course, C&I customers are constantly one-upping each other in their search for better energy options, so we wouldn’t be surprised to see a few unanticipated innovations in 2020.


For more information on Advanced Energy Economy, click here.

Caitlin Marquis is a director at Advanced Energy Economy, where she manages the policy engagement of the Advanced Energy Buyers Group, a coalition of leading companies that are working to expand their use of advanced energy. She leads the Buyers Group’s efforts on both regulatory and legislative engagement at the state, federal, and regional level.

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