The world’s largest corporations signed contracts for more than 6 gigawatts of wind and solar capacity in the United States last year, the beginning of what Wood Mackenzie Power & Renewables is calling a “corporate renewables procurement boom” which is spurring renewable energy development across the country.
Wood Mackenzie published its Analysis of Commercial and Industrial Wind Energy Demand in the United States report in partnership with the American Wind Energy Association (AWEA) on Wednesday, in which the company estimates that up to 85 gigawatts (GW) of renewable energy demand currently exists within the largest US companies through to 2030. The report highlights corporate leaders such as AT&T, General Motors, and Facebook as having contracted more than 6 GW of renewable Power Purchase Agreements (PPAs) in 2018 alone — a new record for US corporate renewable energy procurements.
Despite this significant increase in corporate renewable procurement over the past five years, however, the authors of the report point out that the overall penetration of renewables into the power mix of Fortune 1000 companies still sits at only 5%. That being said, with power demand of nearly 1,200 terawatt-hours, corporations have an incredible opportunity at their fingertips.
“In the absence of a federal mandate to decarbonise the U.S. 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. “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.”
Currently, corporate customers are procuring more wind than solar, but the authors of the report expect that demand for solar power may soon exceed wind in some areas.
“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 Tom Kiernan, AWEA CEO.
“Power market dynamics and the continued reduction of solar power’s costs will place significant competitive pressure on wind,” added Shreve. “A step-change in turbine performance or further cost reductions will be critical for wind to compete amidst ever-increasing renewables penetration. Long-term, transmission expansion and large-scale, long-duration energy storage solutions are critical to connecting major load centers in the east and west to low-cost wind generation from the central wind corridor of the US.”