Google Powers Up with Iowa, Oklahoma, and South Dakota Wind Energy
by Hanna Hunt – AWEABlog
Never one for small acts, Google recently announced that it will be buying a massive combined 536 megawatts (MW) of new wind capacity from four U.S. wind farms. Here are the details on Google’s latest deals:
One 200 MW power purchase agreement (PPA) signed with EDF Renewable Energy for the entire output of the planned Glaciers Edge wind farm in Iowa
One 140 MW PPA signed with Grand River Dam Authority (GRDA) for output from Enel Green Power North America’s 300 MW planned Red Dirt wind farm in Oklahoma
Google is a global leader in renewable energy procurement, announcing last yearthat it would be powered by 100 percent renewables by the end of 2017. What’s most impressive about this news? Ninety-five percent of that will come from wind. And prior to yesterday’s announcements, Google had already signed agreements to purchase a total of 1,800 MW of U.S. wind energy.
Gary Demasi, Google’s director of global infrastructure, explained why wind energy represents a low-risk, high-value investment for Google: “Renewables from projects like [these] bring value to our business as we scale and accelerate investment in the communities where we operate … with solar and wind declining dramatically in cost and propelling significant employment growth, the transition to clean energy is driving unprecedented economic opportunity and doing so faster than we ever anticipated.”
And Google’s not alone. In total, corporate and other non-utility customers have signed approximately 7,000 MW of PPAs for U.S. wind power to date. Early leaders, which included Google and other high tech companies, are now being joined by a diverse range of retailers and household brands. For example, four companies, including Anheuser-Busch, Cummins, JPMorgan Chase, and Kimberly Clark, all signing PPAs for the first time last quarter.
Interested in learning more about the Fortune 500 companies and other non-utility customers investing in wind? Dive into our new interactive map below. The map includes all publicly announced non-utility wind PPAs at least 20 MW in size.
How the FORTUNE 500 Are Driving New Markets for Clean Energy
More Companies are Choosing to Power Their Operations with Renewable Energy
What brings diverse companies like Amazon, Disney, General Motors, Microsoft, Nike, Starbucks and Walmart together? They’re all buying renewable energy or want to get in the market for it.
From tech giants to household names, corporate America is shopping for clean, renewable energy that is increasingly cheaper than conventional alternatives. Leading companies are seizing the opportunity to reduce their environmental footprint with wind and solar while simultaneously locking-in low, predictable energy prices for a decade or more.
These companies and many others recently gathered for a summit of the newly created Renewable Energy Buyers Alliance (REBA), which has a goal of facilitating 60 gigawatts (GW) of new corporate renewable energy capacity by 2025.
I attended the summit and noticed a few trends emerging that could shape the future of corporate renewable energy deals. More on that in the second installment of this series, but first let’s examine why corporate buyers purchase renewables and how they’re doing it.
Why does it matter that big companies are buying wind power?
You might reasonably ask why dozens of large corporations need to get together and discuss energy purchasing. Most of us pay our electric bills without much fuss (unless they go up). For customers with large electricity needs, which are orders of magnitude greater than any household, buying energy involves more negotiation and planning – as befits these companies’ substantial buying power and demand.
Why does this matter? Big energy bills mean corporate buyers hold significant sway with the utilities who supply them – if they push for renewable energy, it ends up benefitting everyone.
Nearly three-quarters of Americans think the U.S. should “emphasize alternative energy such as wind and solar,” according to a 2016 Gallup poll, while 91 percent of likely voters support growing wind energy, according to a survey from Wall Street investment firm Lazard, Inc. Large corporate customers with their substantial buying power help new renewable energy projects get financing and make a compelling argument for utilities to speed up their procurement and delivery of renewable energy. This gives Americans more of the emission-free electricity and cleaner air they want.
How do corporate buyers purchase renewable energy?
Companies may pursue a number of options when purchasing renewable energy. Some build wind and solar projects onsite, others – including IKEA – own utility-scale wind projects.
Long-term contracts called power purchase agreements (PPAs) are the most common way to do it. The company may sign a physical PPA, where the energy is physically delivered to the company, or they may sign a virtual PPA, where the energy produced continues to be delivered into its local energy market. When a company signs a PPA for renewable energy, they agree to pay a fixed price over a period of time for the electricity produced from a wind or solar project, which comes bundled with renewable energy credits (REC).
RECs exist to quantify the value of renewable energy’s environmental and societal benefits, which our economic system doesn’t factor in – reduced air pollution, the preservation of natural resources and improved public health. The PPA typically grants the purchasing company the right to claim the RECs, and that is how a corporation can claim to be carbon neutral or powered by 100 percent renewable energy.
Obtaining a long-term contract is often the make-or-break requirement for a new wind or solar project to secure financing from investors. By providing a renewable project developer with a measure of certainty on future electricity sales, corporate PPAs help drive additional project development, and ultimately add more clean power onto the grid.