Wal-Mart makes big renewable push with utilities

By Daniel Cusick | 05/29/2015 08:16 AM EDT

Wal-Mart Stores Inc., the company that coined the phrase “rollback pricing,” is busy rolling back state and utility resistance to corporate purchases of renewable energy.

Wal-Mart Stores Inc., the company that coined the phrase "rollback pricing," is busy rolling back state and utility resistance to corporate purchases of renewable energy.

The Arkansas-based firm, perennially ranked atop the Fortune 500 index with stores in all 50 states, will soon break ground on its 300th solar power site, expanding its photovoltaic (PV) output to 100 megawatts across 14 states and Puerto Rico.

"What we have found over time is that once we’re successful with on-site solar at one location or state, opportunities begin to open up in other states," David Ozment, Wal-Mart’s senior director for energy, told participants of a webinar sponsored by the nonprofit Advanced Energy Economy yesterday. "We literally work across the United States to try to make solar work in that particular capacity."


Increasingly, states are getting the message.

Georgia, for example, this spring became the latest state to allow independent firms to build and lease solar systems in the state, effectively dismantling Georgia’s long-standing model under which regulated utilities had sole authority to generate and distribute electricity (EnergyWire, May 27). The Georgia solar law is primarily aimed at helping homeowners and small businesses finance rooftop PV systems, but it could also encourage larger-scale distributed generation, including corporate PPAs like the ones Wal-Mart prefers.

"When we talk about distributed generation and the role it’s beginning to play in our energy world … it’s no longer really just the utility providing all of the transmission and distribution anymore," Ozment said. "The distributed generation pony has sort of left the barn, and we’re not going to put it back in."

Yet, even with the emergence of new solar markets like Georgia, renewable energy advocates say barriers still remain to open and competitive markets, with utilities and public service commissions in many states continuing to hold onto traditional models of power generation, transmission and distribution.

‘You’re going to have to reinvent yourselves’

Anna Giovinetto, senior director for state policy at Advanced Energy Economy (AEE), said that in many states "it remains difficult if not impossible for consumers to buy renewable energy directly." Barriers range from cumbersome procurement rules and fees to outright bans on sales of renewable or distributed generation to non-utilities.

The group is working to change such laws through its recently launched "Access to Renewables" campaign, a business sector-led initiative to break down barriers to renewable energy procurement. The campaign cites a number of major deals announced so far this year, including Apple’s record $848 million contract to buy 130 MW of solar power over 25 years from First Solar’s California Flats Solar Project in Monterey County.

While helping to blaze a path for solar nationally, Wal-Mart is also making deep investments in commercial wind energy with two dedicated wind farms in Texas expected to come online by late next year. The wind farms, being built by private developers, will produce and sell roughly 240 MW of clean energy to Wal-Mart under 10- and 12-year power purchase agreements, according to the company.

Thanks in part to its aggressive adoption of clean energy — Wal-Mart in 2013 set an aspirational goal to meet all of its electricity demand using renewable energy resources — the company’s engagement with traditional utilities and state public service commissions has taken on a new tenor.

Gone are the days when a new Wal-Mart retail store or distribution center simply tapped the local power distribution network and began purchasing retail electricity from the local regulated utility.

Under its evolving energy strategy, Wal-Mart looks first to build the most energy efficient big box buildings possible, then it seeks to find the cleanest, most affordable power available that can be delivered to that box, often offering its stores’ rooftops to solar developers who build and sell solar power back to the company.

"It looks [to utilities] like our demand for energy is going down over time," Ozment said. "What we advise utilities is, ‘You’re going to have to reinvent yourselves and play a new role, whether it’s providing more renewable energy to customers or doing more on the efficiency side,’" he added. "So it’s a good time to listen to your customers, and adapt and adjust."

Strategy ranges from lighting retrofits to fuel cells

Ozment’s message has been getting more attention lately, as Wal-Mart continues to ride a recovering economy, adding dozens of new stores across the country and building or expanding distribution centers to keep its supply chain humming.

And while Wal-Mart adopted core sustainability principles, including renewable energy purchases, in 2005, it recently sharpened its focus to meet specific energy metrics. One of those goals, Ozment said, is "to drive the production or procurement" of 7 billion kilowatt-hours of renewable energy globally by Dec. 31, 2020, an increase of 600 percent over 2010 levels.

The company also has doubled-down on energy efficiency, pledging to reduce its stores’ electricity consumption per square foot 20 percent below 2010 levels by the end of the decade, a process driven largely by lighting retrofits and refrigeration improvements.

As part of its broader energy strategy, Ozment said Wal-Mart has also adopted other technologies — ranging from Bloom Energy Copr. fuel cells to battery-based energy storage — to help manage peak loads, to provide backup power in the event of grid outages and to make better use of intermittent on-site solar generation.

Under a partnership with SolarCity and Tesla, Wal-Mart has done pilot testing of smaller storage systems, batteries in the 15- to 30-kilowatt range, at sites in California. But Ozment said the company will soon begin testing batteries with storage capacities of several hundred kilowatts at some California locations.

"We’re excited because it gets closer to what our store loads are," he said. Plus, the larger batteries will be charged by Wal-Mart’s on-site solar panels. The stored solar energy will be discharged during peak demand times, allowing for less reliance on higher-cost, grid-delivered power.