Best Ways to Speed Up Renewable Energy Investment Globally

renewable-energy-business-IRENA

One strong theme to emerge in the transition to a low carbon economy is that companies are now eager to access renewable energy as a bottom line consideration. That should help rev up decarbonization to an optimal speed — that is, a pace that meets the threshold needed to avoid catastrophic climate change. However, most countries still lack a policy framework that provides companies with an efficient pathway to access renewables.

Fortunately, help is on the way. IRENA (the International Renewable Energy Agency) has just launched a new first-of-its-kind survey project called the REmade Index. The idea is to assemble a database of best practices and models for any and all businesses that have purchased renewable energy. The survey includes companies of any size, so it provides a great opportunity for small business owners and managers to lend their experiences to the global effort.

What’s the renewable energy problem?

To the casual observer, the pace of renewable energy adoption may seem strong. Wind, solar and other low or zero emission energy technologies have been experiencing a years-long trend of explosive growth, and costs keep dropping.

However, climate experts and other researchers are concerned that the current rate of investment in clean power is not fast enough to meet the Paris Agreement goal of limiting global warming to 2 degrees centigrade.

According to IRENA, the average annual investment in clean power should be at around the mark of $900 billion. With that kind of financial muscle behind it, the share clean power in global energy should top 35 percent by 2030, about double what it is now.

That’s a tall order considering that total clean power investments in 2015 barely scraped past $300 billion.

The low falling cost of wind and solar is helping, but investors need more predictability and reliability in order to ramp up the pace of change.

IRENA highlights Google as one example of a company that is fully on board with renewables, and yet is unable to purchase all that it could:

“Since our first power purchase agreement in 2010, Google has signed 20 different renewable energy purchasing deals in 5 countries totaling 2.6 GW.  However, we’re not yet able to purchase renewable energy everywhere we have significant operations, as we are limited by policy and regulatory hurdles in some markets,” said Michael Terrell, Head of Energy Policy at Google.”

A 2014 IRENA financial survey has identified a set of factors that would make clean power more attractive to investors. These include standardization and aggregation of smaller projects as well as developing new financial instruments that streamline loans and reduce risks for investors.

Reducing risks for small scale investors is also extremely important, as highlighted by the case of American Solar Direct.

What business can bring to the table

The competitive cost of renewables has motivated a sea change in the way companies look at energy sourcing. Clean power is now clearly a bottom line issue for business, according to IRENA Director-General Adnan Z. Amin, over and above any environmental concerns. Long term price stability, reliability of supply, community relations all come into play.

As the coal industry gradually loses its grip on power generation, renewables also enable companies to project the kind of contemporary identity that attracts — and holds — new clients and customers.

The REmade Index is designed to leverage this new approach to energy sourcing. It will highlight companies that have made great strides in voluntary renewable energy sourcing, pick out emerging trends, and develop recommendations to help lift other companies along.

As any marketing professional can attest, the key challenge is to get the message out in a form that encourages energy consumers to act. Amin anticipates that the REmade Index will help accomplish that by highlighting the bottom line benefits in the real world:

“These achievements from companies around the world are only the beginning of what companies can do to help accelerate the energy transition. As this trend continues, global interest in identifying and removing market barriers and sharing best practices, both in the public and private sectors, will only grow. By mapping out global efforts and potential for corporate sourcing in decarbonizing the global energy mix, the REmade Index is designed to do just that.”

Findings from the REmade corporate survey will dovetail with an earlier IRENA survey designed to help nations develop more effective frameworks to speed up investment in renewable energy by the private sector.

The REmade Index also supports the Clean Energy Ministerial’s Corporate Sourcing of Renewables Campaign, and is supported is by the IRENA Coalition for Action.

Business helping business on the path to renewable energy

The historic decarbonization of the global economy encompasses many story lines, and the new REmade Index illustrates one of the many ways in which businesses are voluntarily collaborating with other businesses — and even their own competitors — to stimulate investment in low carbon technology.

Innumerable consortia and public-private partnerships have cropped up to smooth the path to solar, wind, low emission vehicles and other clean technologies. One recent example is a new fuel cell truck demonstration involving UPS, the Department of Energy and other commercial and research partners. If it proves successful, many other fleet owners stand to benefit from the switch to cleaner vehicles.

Another recent example is a collaboration between the real estate industry and Lawrence Berkeley National Laboratory to add standardized rooftop solar details to information included in real estate multiple listing services. It launched in California earlier this year and eventually it could be shared by 700 services around the country.

The project is expected to motivate more home owners to install rooftop solar because it adds value upon resale, so the whole solar supply chain benefits from the new addition to the listing services.

In another type of collaboration, last February Honda and GM teamed up to launch an $85 million fuel cell manufacturing facility in Michigan.

Companies are also licensing or outright sharing their clean tech patents. Examples here include several of Ford’s electric vehicle patents, and thousands of Toyota fuel cell patents.

Some of the most interesting collaborations involve high tech startups teaming up with legacy companies, such as the new partnership between Ryder and the fuel cell truck company Nikola.

So…how can you help?

Somewhat lost in all this activity is the opportunity for small and mid-sized companies to help steer the global decarbonization ship.

Typically, smaller companies are perceived only as customers for clean energy technology. The REmade corporate survey gives them a chance, no matter how small they are, to drive change beyond their four walls, add their knowledge and experience to help develop more efficient platforms for renewable energy investment.

In addition to basic corporate details, the survey includes open ended questions about the company’s renewable energy goals and its strategy for getting there.

Businesses also have the opportunity to weigh in for their preferred options in terms of financing and sources.

The survey covers a wide swath of territory. It includes any business, anywhere in the world that uses electricity, heating and cooling, and transportation.

Companies that are aiming to access less than 100 percent renewables are just as welcome to contribute to the survey as are those that have 100 percent in their sights.

Companies that are leaning on renewable energy credits can also contribute, along with those using power purchase agreements, direct investments or some other arrangement.

To access the REmade survey visit IRENA online at coalition.irena.org.

Image (screenshot): via IRENA.

Climate & Environment

Recent headlines from the 4690 articles in this category:

Tina writes frequently for Triple Pundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.

Leave a Reply