The US is at the “beginning stage” of a corporate renewables procurement boom with up to 85GW of wind and solar energy demand existing within Fortune 1000 companies through 2030, according to a new report by researcher Wood Mackenzie Power & Renewables and the American Wind Energy Association (AWEA).
The coming surge in procurement is being driven not just by goals around mitigating climate change but also by highly competitive renewable project economics that are seeing solar put pressure on current corporate renewables champion onshore wind.
“In the absence of a federal mandate to decarbonise the US power grid, corporates are stepping up their efforts to address climate change,” said Dan Shreve, head of wind research at Wood Mackenzie and lead author of the report, Analysis of Commercial and Industrial Wind Energy Demand in the United States.
“Momentum is building, peer pressure is rising, and corporate renewable energy procurement practices are maturing, setting the stage for increased market participation within the Fortune 1000,” he added.
According to the report, corporates and industrials (C&I) contracted for more than 6GW of wind and solar in 2018, a record. Still, the overall penetration of renewables in the power mix for Fortune 1000 companies remains limited at 5%.
Technology companies are the largest buyers of renewable energy led by Facebook with 2.2GW under contract, or 14.1%, of C&I activity through 2018. Google was second with 2.1GW (13.7%), then Amazon, 1.1GW (7.3%) and AT&T, 800MW (5.2%).
The report provides a scenario-based outlook for both wind and solar installations to satisfy C&I demand by region through 2030.
Presently, companies are procuring more wind power than solar. The report notes that solar is rapidly growing and may soon “take hold” in some regional wind strongholds such as the Plains states and Texas.
“Wind and solar are stronger in different parts of the country, so states must ensure they have competitive policies and adequate transmission infrastructure to attract investment in the renewable projects and business activities that they will power,” said AWEA chief executive Tom Kiernan.
Shreve added that electricity market dynamics and continued reduction of solar power costs will place significant competitive pressure on wind.
“A step change in turbine performance or further cost reductions will be critical for wind to compete amidst ever increasing renewables penetration,” he said.
Longer-term, expansion of transmission and large scale, long-duration energy storage solutions are “critical” to connecting major load centres in the east and west to low-cost wind generation from the central wind corridor of the US, he added.
Solar could face challenges vis-à-vis wind if tariffs persist on solar modules or the federal investment tax credit expires instead of stepping down to a permanent 10%, according to the report.