What is RE100?
And How Can Your Organization Achieve 100% Renewable Power?
If you’ve ever led a business transformation team or just tried to hit a solid cost-of-goods reduction target, you appreciate the shift in thinking, behavior changes and sheer determination required to set (and hit!) really big goals.
For corporate members of RE100, there are no half measures when it comes to changing how they power their operations. It’s an all-in, very public commitment to transition to 100% renewable energy generation across global operations. The ultimate goal is “to accelerate change toward zero carbon grids, at global scale.”
As RE100 approaches 200 members – including many of the world’s Fortune 500 companies – it’s worth taking a look at why (and how) so many public and private companies are choosing to commit to 100% renewable energy sources.
Why 100% renewable energy as a strategic goal?The negative environmental impacts of burning fossil fuels to drive human innovation were recorded as early as the mid-1800s, during the heart of the First Industrial Revolution.
Today, there is a massive body of research correlating burning oil, gas and coal with warming the planet, melting polar ice caps and other harmful impacts to the health and life of living organisms, particularly humans. On the material side, climate change is predicted to have an increasingly devastating impact on the U.S. economy, costing hundreds of billions of dollars.
To try to mitigate and potentially repair the worst of climate change, many of the RE100 members are also establishing science-based targets, which are GHG emissions reductions goals aligned to create enough decarbonization to stop a more than 2 degrees Celsius/3.6 degrees Fahrenheit temperature increase versus “pre-industrial” temperatures. These commitments to lower emissions are contributing to the accelerated shift to renewable energy now taking shape nationwide.
In 2014, RE100 was launched as one branch of The Climate Group, a nonprofit, global organization dedicated to taking action on climate change since 2004. Today, RE100 focuses on commercial and industrial corporations operating in China, Europe, India and the United States, areas that account for over two-thirds of the world’s energy use.
What does it take to make the RE100?
Goals for decarbonization often go beyond the “four walls” of the company, extending out to full supply chains and complete life cycles of goods produced.
RE100 members must also be “influential,” with either a trusted brand, multinational presence (Fortune 1000 equivalent), significant power footprint (e.g., use over 100,000 MWh electricity) or other attributes that convey “clear international or regional influence.”
With this in mind, joining the RE100 is fairly straightforward. Your business needs to:
- Commit to transitioning operations to 100% renewable energy
- Report progress, leveraging resources from CDP.net, a nonprofit charity that creates a global disclosure system on environmental issues
Be prepared to be held accountable for the commitment and to provide information, usually through annual reports, that highlight policies and other roadblocks that can help other organizations learn from your experiences – both good and bad.
How big of an impact does RE100 create?
The nexus between decarbonization and achieving 100% renewables goals is becoming tighter every day. And it’s definitely making a huge impact on reducing emissions.
According to the Renewable Energy Buyers Alliance (REBA), during the past four years alone, corporations have publicly announced deals totaling more than 14.17 gigawatts (GW) of pure renewable energy generation. That equates to the same additionality (net new renewables added to the grid or local generation mix) as replacing 1,000 coal-fired power plants!
Is achieving 100% renewable generation even possible?
Simple answer? Absolutely!
According to the RE100 Progress and Insights Annual Report published in November 2018, more than 20 RE100 member companies sourced all their electricity from renewable sources by the end of 2017. In 2018, these 20 were joined by seven others: Apple, Amalgamated Bank, Capital One, Google, Gurmen Group, Jupiter Asset Management (met its 100% target a year early) and Wells Fargo.
For each company on the list, it’s not just one solution that got them to 100% renewable energy but a combination ― including investing heavily in energy efficiency to decrease energy demand. In fact, RE100 recommends efficiency in retrofits. They also recommend purchasing new equipment that meets the highest level of efficiency standards, such as upper-range ENERGY STAR products in the U.S.
What else is enabling RE100’s success?Along with changing energy usage behavior, investing in energy efficiency and working with suppliers to lower emissions across organizations, RE100 is also being helped by a variety of trends affecting the clean energy markets overall.
Crossing the chasm and becoming a mainstream energy source
The spring of 2019 was the first time that U.S. renewable energy generation (primarily from wind energy, solar power and hydro) outpaced coal-fired power generation. As evidenced by so many corporations making the RE100 commitment, this upward demand trend has surpassed the wildest expectations of a decade ago. New innovations and better understanding of all issues associated with conventional, fossil fuel-based power are driving renewables beyond early adopters to the broader mainstream marketplace.
- Lowering cost of renewable energy sources
The proliferation of sustainable energy generation has also contributed to the lowering costs of renewables overall. More demand for on-site solar and off-site utility-scale wind, for example, has helped drop electricity production costs by as much as 88%(!) over the past decade.
So it’s not surprising that 2018 marked the first time that low- to no-emissions sustainable electricity costs dropped below that of conventional fossil fuels, making corporate investments pencil out faster. This was due to lower cost of equipment, lower cost of maintenance and elimination of significant costs to procure (ex.: mine for coal or drill for gas), transport, build pipelines, and store fossil fuels to burn at power plants.
- Solar plus energy storage
Energy storage is big business. At 13-fold anticipated market expansion by 2024, it is undoubtedly one of the fastest-growing segments when it comes to lowering emissions at major scale. Today, battery storage – primarily lithium-ion-based – installed on-site in conjunction with solar is the most common (and cost-effective) on-site energy storage.
Researchers conclude that companies interested in emission reductions will ultimately need to use energy storage and schedule their power consumption to times of the day when wind or solar is pumping out electrons.
Commercial enterprises interested in hitting emissions reductions targets faster are implementing storage. It’s a great solution to solve intermittency of wind and solar production for grid assets as well as ability to cut peak demand usage. Avoiding tons of new emissions by not building high-emitting, infrequently used (less than 2%!) fossil fuel-powered peaker plants to meet corporate peak demand is critical to lowering emissions overall.
- Broad range of financing and contracting terms
The days of only having a choice of cash or loans or cash-based leases to pay for new renewable generation are long gone. There are plenty of contracting terms and agreement options to mix and match when it comes to renewable energy finance. Virtual power purchase agreements, or VPPAs, for example, enable corporations to retain renewable energy credits (RECs), create a hedge against future energy price increases and shift to renewable energy faster at scale (moving from under 1 MW to potentially more than 100 MW clean energy in a single agreement).
What’s next for RE100?By proactively and voluntarily committing to switch to renewable energy, RE100 members are satisfying increased customer, employee and consumer pressure to lower emissions. That commitment goes far beyond better branding. It may also set businesses in the right place should significant policy change become a widespread part of the mix.
For example, California recently surpassed $2.6 billion in cap-and-trade revenues, putting those funds back into communities and clean energy research and innovations. Carbon dividends, on the other hand, have even found appeal in global fossil fuel companies, which want to see a price for GHG emissions raising money for consumers.
Another option is sustainable investment funds, such as Ceres.org, whose goal it is to promote and make investing in and lobbying for renewable energy and other sustainability technologies, products and services mainstream business.
Whatever the politics, RE100 represents big commitments for big change – and a public forum for tracking change at an unheard of scale.