Corporate sourcing of renewables key to meeting Europe’s 32% renewable energy target
The last weeks have seen an abundance of significant solar and wind sourcing agreements from major corporates around the world. Google announced its largest corporate renewable purchase in history, including nearly 800 MW of new renewable energy in Europe. Amazon recently unveiled plans to reach 100% renewable energy by 2030.
New partnership with airports
The Airports Council International (ACI Europe) also announced at the event a new partnership with the RE-Source Platform to accelerate the clean energy transition of the airport industry and help it achieve its 2050 net zero commitment. In addition, the RE-Source Platform received a €500,000 grant from Google.org to fund further the development of new renewable energy purchasing models, provide training and resources for consumers, and enable more widespread access to clean power.
Corporate sourcing of renewables has risen rapidly in Europe, with 7.5 GW of Power Purchase Agreement (PPA) deals signed over the past five years, and 1.6 GW worth of deals in 2019 alone. More European countries are engaging in PPA deals: 13 countries have inked PPAs in 2019 so far. Commercial and industrial on-site corporate sourcing accounted for 3.4 GW in 2018 and is expected to grow considerably in the next decade.
Industrial and commercial consumers account for more than half of Europe’s energy consumption today. Powering these corporate consumers with renewable energy could deliver both significant reductions in CO2 emissions and make European industries more competitive due to the rapidly falling cost of renewables.
According to a recent study from the European Commission, if EU-based corporate buyers committed to sourcing renewable electricity to meet 30% of their total electricity demand by 2030, the EU renewable energy sector would generate more than €750bn in gross added value and over 220,000 new jobs.
Removing administrative barriers
Governments can play their part in facilitating more companies to source renewables, by removing administrative hurdles for corporate renewable PPAs, and on-site and direct investments in renewable energy generation that exist throughout Europe. Under the new Renewable Energy Directive, European governments now have the duty to remove these barriers. Currently, only two of the draft National Energy and Climate Plans for 2030 even mention PPAs and none comply with the agreed legislation.
Walburga Hemetsberger, CEO of SolarPower Europe said: “Corporates are ready to help deliver Europe's 32% renewable energy target by sourcing significant amounts of solar and wind energy to power their businesses. This is an important step towards a sustainable future, sending a strong signal that corporations have an essential role to play in driving Europe’s clean energy transition. The increase of commercial and industrial on-site corporate sourcing and PPAs in Europe indicates a growing momentum for renewable energy, revealing the demand for suppliers and potential for new business opportunities.”
Huge potential for green energy for businesses - renewables cost competitive
WindEurope CEO Giles Dickson said: “Industry and business consume more than half of Europe’s electricity today. And they’re increasingly looking to power their operations with renewable electricity. This is good news for everyone. It saves money because renewables are the cheapest form of new power. It cuts CO2 emissions. And it boosts jobs and investment in renewables. But many European countries still have barriers to PPAs. They need to remove them to unlock the enormous potential of corporate sourcing of renewables in Europe.”
More than 200 companies joined the RE100 initiative
Sam Kimmins, Head of RE100, The Climate Group, said: “More than 200 leading companies have joined the RE100 initiative with a commitment to source 100% renewable electricity for their global operations – and much of that demand is in Europe. By bringing together the buyers and sellers, and asking governments to remove barriers to PPAs, our RE-Source Platform provides a vital service in helping companies to achieve their renewable electricity ambitions across the continent.”
Maria Mendiluce, Managing Director at the World Business Council for Sustainable Development, said: “Energy is an essential mitigation lever for all companies on the journey to decarbonising their business, and purchasing renewable electricity is an excellent way for companies to achieve their decarbonisation targets. The growth of corporate renewable sourcing in Europe shows the significant potential for the private sector to help to meet Europe’s 2030 renewable energy target.”
Much more renewable power needed
Marco Mensink, Director General, CEFIC said: “It is urgent to build the relevant infrastructure to pave the way for an effective transition to a low-carbon economy. Switching to renewable power and hydrogen is one of the main solutions for energy intensive industries, including the chemical industry, to significantly reduce emissions. To meet the net neutral Europe target, our industry alone would require renewable power equivalent to 3.5 times Germany’s current total electricity consumption. The task ahead is massive. Corporate sourcing of renewable electricity will be one of the options for us to secure clean and affordable energy for our operations.”
EU-Commission wants to push PPAs
Philipp Offenberg, Adviser, European Political Strategy Centre, European Commission said: “Wind and solar have been major agents of change over the past years, making the energy system in Europe cleaner. It is time for power purchase agreements to become a key vector to modernise our industries and help them shift towards climate neutrality. Looking ahead with the European Green Deal, let us now work together to grasp the opportunities for Europe in terms of jobs, investments, technological leadership, and sustainability.”
Thorsten Herdan, Director General, Ministry for Economic Affairs and Energy, Germany: “Energy from renewable sources is already competitive in many parts of the world. The competiveness will even increase with CO2 pricing schemes. Corporate sourcing of renewable energy therefore makes ecological but also economic sense and is most welcome as an accelerator for the global energy transition.” (HCN)