REDMOND, Wash. — When the news hits that a company has bought into a monster renewable energy project, chances are that company is the likes of Facebook, Microsoft or Google. Now those tech darlings are using a new vehicle to encourage other companies to do the same — especially in places where coal power reigns supreme, like South Carolina or Kentucky.
Representatives from these tech firms were headline speakers at a meeting late last week of the Renewable Energy Buyers Alliance (REBA), a new but fast-growing group that intends to make direct purchase of clean power easier for humbler sorts of firms, like hoteliers, clothiers and aluminum manufacturers.
The agenda of the meeting, held at Microsoft Corp.’s headquarters here, didn’t specifically encourage companies to locate their projects in utility service territories where the conversation about renewables is uncomfortable. Speakers said that costs matter, as does the public relations value of siting a project nearby.
But another message was unmistakable: If companies want their clean-energy purchases to tip the scales against climate change, they ought to use their pocketbooks to sway utilities and states that aren’t much interested.
"If you’re trying to change the market," said Bill Weihl, the director of sustainability for Facebook Inc., to the 280 attendees, "it’s useful to think, ‘How do I change the market there?’"
REBA’s goal is to help businesses procure 60 gigawatts of renewable electricity by 2025. Its backbone is a partnership among four nonprofit organizations — the World Wildlife Fund, the World Resources Institute, the Rocky Mountain Institute and Business for Social Responsibility — that combined their efforts to increase business adoption of renewable power. On its own, REBA has neither staff nor budget.
Its 60 corporate members represent a wide cross-section of the economy: McDonald’s Corp., Starwood Hotels & Resorts Worldwide Inc., Target Corp., General Motors Co., Kellogg Co., Adidas AG, Genentech Inc. and Lockheed Martin Corp.
Prepping for clean energy’s second wave
REBA seeks to address the problems encountered by companies whose circumstances don’t resemble that of a Microsoft, Amazon.com Inc. or Apple Inc. The tech giants share three characteristics that motivated them to be first movers: Their massive data centers make them prodigious users of electricity, their fame and cutting-edge reputation mean that ignoring climate change is not an option, and their size and profitability make it easier for them to buy an entire wind or solar farm and get the output at wholesale prices.
Much regulatory complexity awaits the second wave of smaller companies that would like to buy directly into a clean-energy project, or larger companies that want to start by dipping a toe.
According to figures shared at the meeting, 60 percent of Fortune 100 companies have publicly stated goals related to greenhouse gases, renewable energy or energy efficiency. So have 43 percent of the Fortune 500. But those numbers drop off precipitously the smaller a company gets.
While a thicket of rules and impediments make it hard to close a renewable energy deal anywhere, in some states it’s harder than in others. Several states forbid or restrict third-party power purchase agreements, including North Carolina, Kentucky, Oklahoma and Florida, according to REBA.
One way to make it easier, speakers said, is to engage in collective bargaining, where, for example, three companies that each want 5 MW of solar or wind power join forces to ask their utility for a 15 MW project. REBA wants to make those connections.
"We need more buyers out there who represent more interests," Weihl said.
A business can force a utility to change its stance on renewables, said Jonathan Weisgall, the vice president of government relations for Berkshire Hathaway Energy Co., which runs utility companies and power plants from Iowa to California.
Weisgall told the conference that Berkshire Hathaway’s path into renewables started with an adamant customer. That client was Switch, a data center operator based in Las Vegas that has built the largest data center in the country and has plans to build far more. Switch asked NV Energy, Berkshire Hathaway’s Nevada utility, to build it a solar plant, and said that if it didn’t, Switch would find another power provider that would.
"That was a shot across our bow," Weisgall said.
The project got built and changed Berkshire Hathaway’s trajectory, Weisgall said. Now the company’s holdings represent 8 percent of the country’s wind projects and 7 percent of its solar projects, and it is seeking to build an enormous 2 GW wind farm in Iowa.
Corporate renewables deals have been climbing steeply, from half a gigawatt in 2013 to 3.21 GW in 2015, according to data from the Rocky Mountain Institute.
Energy changes for IT titans
The program for last week’s meeting featured information technology titans that use vast quantities of electricity and whose names have become synonymous with big bets on renewable energy. A panel session on procurement included Lori Duvall, director of global impact at eBay Inc.; Brian Janous, the director of energy strategy at Microsoft; and Mike Terrell, the head of energy and global infrastructure at Google.
Google says it plans to run its operations entirely on renewable energy and has invested $2.5 billion in projects, making it one of the largest corporate buyers of renewables in the world. Facebook has a target of powering its data centers with 35 percent renewable energy in 2015 and says it will reach 50 percent by 2018.
Microsoft used the opportunity of a meeting at its headquarters to raise its renewables targets. Currently, 44 percent of the electricity used by its data centers is powered by wind, solar and hydropower. It set a new goal of 50 percent renewables by the end of 2018 and set sights on 60 percent by the early 2020s, said Brad Smith, the company’s president, in opening remarks.
As it plans for a new data center, Microsoft is considering where the renewable energy will come from, said Janous, the company’s chief energy strategist, in an interview. That includes a strategy that speakers were encouraging REBA members to follow — to site renewable projects in regions where renewables aren’t part of the conversation.
Janis said that strategy was a key factor in why Microsoft sited its latest renewable project, a 20 MW solar farm, in Virginia, where coal power is a mainstay of electricity generation and where the state’s renewable energy portfolio goal is a mere 7 percent by 2021.
Microsoft, which claims it achieved carbon neutrality four years ago, has an obligation to pass its lessons on, Janous said.
"If the industry hasn’t changed," Janous said, "then we’ve failed."