Achieving Corporate Sustainability & Operational Goals With Renewable Energy

by: Stephanie Lee | October 25, 2023

Renewable Electricity Drivers for Companies | ClimeCo Blog

In a previous blog, we outlined how renewable electricity purchases factor into greenhouse gas (GHG) accounting calculations and the different levers companies might pursue to purchase renewables. Several exciting developments have happened since then:

• Over 2,000 new companies have formally committed to Net-Zero [1]
• The Inflation Reduction Act (IRA) passed with new incentives for renewables [2]
• Total renewable energy capacity reaching 4,500 gigawatts (GW) of new renewable electricity capacity has come online globally [3]

Naturally, the next question is: How can companies use this information and new developments to advance their climate and operational goals?

This blog builds on the previous post, detailing how companies use corporate renewable energy procurement to achieve their goals and develop a renewable electricity procurement strategy. 

Renewable Electricity Drivers for Companies

Our first blog post highlighted the benefits of using renewable electricity to achieve corporate decarbonization goals. However, companies also use renewable electricity to achieve operational, financial, and ESG goals beyond decarbonization. In addition to achieving sustainability goals, top company motives for procuring renewable electricity include achieving an attractive ROI, hedging against increasing electricity prices and enhancing corporate reputation.

Corporate Motives to Pursue Renewables [4]

Renewable electricity can help companies achieve these goals by:

Reducing electricity costs. The levelized cost of energy has dropped over 30% for wind and solar over the past ten years. [5] These declining costs mean that companies can procure renewables that are cost-competitive or cheaper than fossil fuels in many cases. Additionally, utilities and electric suppliers are increasingly developing new, easy-to-enroll programs for commercial and industrial customers to take advantage of declining costs without contracting separately with a renewable energy developer.

Providing long-term operational stability. For companies that want to lock in prices for a longer-term duration, many opt for power purchase agreements (PPAs). PPAs are contractual agreements for energy for 10 to 25 years. These agreements allow companies to budget for long-term pricing without worrying about market volatility.

Increasing brand credibility and supporting social impact goals. As previously mentioned, renewable electricity helps companies decarbonize and, by extension, positively impacts the environment through improved air quality and reduced impacts on water. [6] Procuring renewable electricity and having a specific project to point to can demonstrate a brand’s progress towards its environmental goals and show how companies are making tangible impacts. Additionally, companies can embed social impact goals into their procurement by supporting projects in or near disadvantaged communities, selecting procurement options that support local communities (e.g., community solar), and setting workforce requirements such that the local economy benefits.

Given the wide variety of benefits, corporate renewable electricity procurement has accelerated over the past decade from less than 1 GW before 2014 to over 16 GW in 2022 the United States alone. Additionally, the number and types of companies procuring renewable electricity have continued to diversify. These companies provide valuable case studies for others starting their procurement journeys. 

Corporate Renewable Energy Procurement in the U.S. 2008 – 2022 [7] 

How to Get Started

Understand your usage. Developing a renewable electricity strategy starts with understanding your existing and planned electric use. Companies should gather utility bills and calculate annual electric usage, costs, and greenhouse gas emissions. Companies should also add assumptions on how usage might change in the future, such as additions to facilities and plans for remote workers to return to offices.

Outline your priorities. Next, companies should outline their procurement priorities, including financial, operational, and ESG goals, with a cross-functional team of impacted parties.

Questions to consider:

• Are there any budget, staffing, or other constraints that the procurement plan should include?
• How important are social impact goals?
• Should specific sites be prioritized over others?
• How soon does the project need to be implemented?

These priorities will help guide decision-making and ensure the resulting strategy meets stakeholder expectations.

Identify feasible options to meet priority criteria. After outlining the company’s priorities, the next step is determining which viable options meet the priority criteria. As described in our previous blog, companies have several options for renewable electricity procurement, including onsite renewables, utility or electric supplier programs, offsite PPAs, and energy attribute certificates (EACs). Companies should assess opportunities for implementing these options and whether they meet the defined priority criteria. The outcome of this step should be a prioritized list of renewable energy opportunities to pursue.

Develop an implementation plan. Once the priority options are defined, the final step is to develop an implementation plan. This might include developing a request for proposal (RFP) for onsite or offsite PPAs, contacting the local utility, or contacting a broker, like ClimeCo, for EACs. The plan should align closely with the stated priorities regarding timing, budget, and staff resourcing.

ClimeCo supports clients in their efforts to align with renewable energy procurement. To learn more, please reach out to Stephanie Lee.

[1] Science Based Targets – Companies Taking Action 
[2] Environmental Protection Agency (EPA) – Summary of Inflation Reduction Act
[3] International Energy Agency (IEA) – Renewable Power on Course to Shatter More Records
[4] Environmental Protection Agency (EPA) – The Benefits and Costs of Green Power
[5] Lazard’s Levelized Cost of Energy Analysis – Version 16.0, April 2023
National Renewable Energy Laboratory (NREL) – A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards 

[7] Clean Energy Buyers Association (CEBA) – CEBA Deal Tracker Q2 2023 Public

About the Author

Stephanie Lee is on ClimeCo’s Sustainability, Policy, and Advisory team. Her background is in energy, renewables, and sustainability. Specifically, her work has included decarbonization planning, renewable energy strategy development for corporates, and go-to-market strategy development for renewable energy developers, asset owners, and utilities. She has worked with various industries, across consumer-facing and industrial clients.