Ramped-Up Corporate Renewables Procurement Still Falls Short of Paris Goals
Although more and more companies around the world “are voluntarily and actively procuring or investing in self-generation of renewable energy,” commercial and industrial users can still go a lot farther to help drive a transition off fossil fuels, the International Renewable Energy Agency (IRENA) reports.
While corporate renewables procurement hasn’t hit the growth rate needed to meet the goals in the Paris Agreement, the experience of the more than 100 companies sourcing 85 to 100% of their electricity from renewables shows “that high ambition and significant acceleration of uptake is feasible,” the agency concludes.
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Building on data collected from IRENA member states, and from more than 2,400 large companies in more than 40 countries, the report finds that corporate sourcing of renewable energy is occurring in “roughly a third of the world’s countries”. That threshold leaves much scope “to further enable corporate entities to source more renewable electricity and ensure that their efforts result in additional deployment”.
As of early this year, reports IRENA, “companies sourced renewable electricity in 75 countries either through power purchase agreements (PPAs), utility green procurement programs, or unbundled energy attribute certificates (EACs),” with Europe and North America accounting for the bulk of corporate sourcing. Demand for renewable electricity has also been “lately noted among companies headquartered in the Asia Pacific region and Latin America,” IRENA adds, and while “few corporate procurement deals have been struck so far” in the Middle East and Africa, “the region promises high potential.”
The study found that “active corporate sourcing” of renewable electricity reached 465 terawatt-hours (TWh) in 2017, accounting for 3.5% of electricity demand and 18.5% of renewables demand in the commercial and industrial sector. About 200 of the 2,410 companies studied “reported that more than half of the electricity they consumed was sourced from renewables,” with 50 reported they were using 100% renewable power.
With commercial and industrial uses accounting or about two-thirds of the world’s end-use of electricity consumption, “corporate demand for renewable electricity has the potential to drive investment in renewables,” IRENA states. “To enable the full energy transformation, corporate renewable energy sourcing will need to go beyond the electricity sector and focus on all end uses as well as energy efficiency measures.”
In a key recommendation, IRENA flags the value of companies having a renewable energy target firmly in place. While only 17% of the companies sourcing any renewables had targets on the books, half of those “have committed to sourcing more than 80% of their electricity from renewable resources.” Scaling up corporate procurement will require “broader participation of companies of all sizes” and “long-term, stable, and predictable policy frameworks,” the Agency states.
“While many countries have in place at least one option for companies to source renewables, there is ample scope for improved enabling frameworks to ensure that rising demand is translated into additional installed renewable electricity capacity.”