A dozen leading companies, including Wal-Mart and General Motors, called for market changes Friday that would make it easier for them to buy more renewable energy.
The companies say they collectively want to purchase 8.4 million megawatt hours per year of this energy, enough to power nearly 800,000 homes, but the market often stymies their efforts. They propose six “buyers’ principles” to shift how states and utilities determine their options.
“Right now, they don’t have enough choices,” says Marty Spitzer, director of U.S. renewable energy policy for the World Wildlife Fund, an environmental group that collaborated with the World Resources Institute to bring the companies together. He says companies are trying to increase their use of solar and wind power but sometimes have to “go around utilities.”
“It’s a Catch-22 for companies,” Spitzer says, noting that many utilities don’t give them an option to buy enough renewable power to meet their goals and bypassing the limits is complicated. Wal-Mart, for example, has pledged to get all its electricity from renewables but can’t achieve that by relying on utilities, so the retail giant has invested in fuel cells, wind farms and at least 250 on-site solar projects.
Even so, Spitzer says, some of the power generated on-site goes back to the grid, leaving companies again dependent on utilities. Some companies create their own microgrids via huge batteries that can store solar and wind energy. Others lobby state legislators, as eBay did successfully in Utah in 2012, to allow businesses to buy power directly from energy producers.
“We know cost-competitive renewable energy exists, but the problem is that it is way too difficult for most companies to buy,” says Amy Hargroves, Sprint’s director of corporate responsibility and sustainability. She says the 12 companies hope identifying their “commonalities” can “catalyze market changes.”
The dozen also include Bloomberg, Facebook, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Proctor and Gamble and REI. They point to six needed changes: greater choice in procurement options, better access to cost-competitive options, longer- and variable-term contracts, access to new projects that cut emissions “beyond business as usual,” streamlined third-party financing and increased purchasing options with utilities.
“These Buyers’ Principles lay the groundwork for partnerships to help energy buyers like us go further faster,” says David Ozment, Wal-Mart’s senior director of energy. “If we can buy renewable energy for less, we can operate for less — and we can pass on the savings and a cleaner energy future to our customers and their communities.”
More companies are likely to sign on to the initiative. The majority, or 60%, of Fortune 100 firms have sets goals for using renewable power or reducing greenhouse gas emissions, according to a report last month by Calvert Investments, Ceres, David Gardiner & Associates and the World Wildlife Fund.
“The world’s largest companies are demonstrating that investments in clean energy drive strong returns,” Bennett Freeman, Calvert’s senior vice president for sustainability research and policy, said in announcing the findings.