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Tina Casey headshot

From Zero to Hero: McDonald’s Turns to REBA for Huge Renewable Energy Deals

McDonald’s has been steering more of its overseas operations into renewable energy; now, the Golden Arches are turning attention to its U.S. business.
By Tina Casey

McDonald’s has been steering some of its overseas operations into renewable energy, and now the global food giant is turning its attention to the U.S. It’s not wasting any time, either. Two years ago the company was absent from the REBA large scale corporate energy buyers’ deal tracker, last year it appeared for the first time and made the top 10 cut, and just last week the company announced a trio of new deals that will keep it among the frontrunners in the coming year.

More renewable energy for in the USA

REBA is the Renewable Energy Buyers Alliance, a corporate initiative that formally launched in 2016 with the aim of investing in 60 gigawatts of clean power by 2023.

The idea of inter-industry collaboration on clean power grew out of talks among early corporate adopters facilitated by the World Wildlife Fund, BSR, Rocky Mountain Institute and World Resources Institute.

Tech giants typically dominate REBA’s annual Top 10 list of top large-scale renewable energy buyers in the U.S., but corporate clean power purchasing has diversified since 2016. McDonald’s sailed right into the number nine slot when it made its first appearance on the list in 2019.

That’s a nifty demonstration of the extent to which inter-industry collaboration can accelerate the renewable energy transition. With the help of GM and other early clean energy adopters, REBA provides large-scale energy buyers with support services, best practices, and lessons learned, which means that latecomers don’t have to reinvent the wheel when they decide to dip a toe into the wind and solar markets.

McDonald’s to U.S. renewable energy industry: more of this, please

McDonald’s also credits its experience in several European markets with its deep dive into the U.S. renewable energy scene.

Another element at work is the company’s support for the Science Based Targets initiative (SBTi). In 2018 McDonald’s became the first global restaurant company to have its greenhouse gas target approved by SBTi.

The 2019 renewable energy projects that earned McDonald’s a slot on the REBA list involve two virtual power purchase agreements for wind and solar farms in Texas, totaling a capacity of 380 megawatts.

The Texas angle may come as a surprise to some, considering that the state is a global epicenter of oil and gas production. However, in recent years the state has also positioned itself as a wind power leader, and its solar power industry is also beginning to catch attention.

The three newly announced clean power deals are also virtual power purchase agreements. They will cover two wind farms and a group of solar projects to be located in Illinois, Oklahoma, North Carolina and Ohio, for a combined capacity of 1,130 megawatts.

That puts McDonald’s in good company. By way of comparison, Facebook headed up the 2019 REBA Top 10 list at 1,546 megawatts, followed by Google at 1,107 megawatts and AT&T at 960 megawatts.

Why a virtual power purchase agreement?

McDonald’s expects that the total of just five power purchase agreements over the past two years will enable it to reach the halfway mark toward its goal of reducing greenhouse gas emissions 36 percent by 2030, based on 2015 emissions.

If that seems like a significant payoff for relatively little effort, it is.

During the Obama administration, the initial period of corporate renewable energy activity was characterized by rooftop solar installations or on-site solar arrays and wind turbines. Each company had to navigate unfamiliar technology and purchasing territory, and deal with permits and other administrative hassles as well.

Power purchase agreements relieved much of the burden on individual clean power buyers, by putting the arrangements in the hands of experienced solar and wind firms.

PPAs have been a key factor in accelerating clean power adoption, but they do little to address broader issues of affordable energy access. Typically, PPAs reward the site owner with lower electricity rates through their local utility. Other ratepayers covered by the same utility do not benefit.

Virtual PPAs resolve the access issue because they are not tied to a specific ratepayer site. The benefits of low-cost renewable energy flow to all ratepayers on the grid.

These projects will not only provide more U.S. communities greater access to clean energy, but they will also stimulate local economies through job creation,” explained REBA CEO Miranda Ballentine.

REBA is already undertaking next-level action to promote clean power access in the coming years. The next steps involve reforming wholesale energy markets to take related technologies into account, including energy storage and demand-response programs.

The enduring power of clean power

The three new renewable energy deals are just part of the McDonald’s sustainability plan, and the company is not shy about articulating the need for swift action on climate change.

In announcing the new agreements, McDonald’s noted that climate action is all the more important in the context of the economic crisis fostered by the COVID-19 outbreak.

“Beyond the environmental benefits, were excited that the investments will also generate employment opportunities and tax revenue in local communities where the projects are located, including an estimated 3,400 short-term jobs, 135 long-term positions and $360 million in local tax revenues,” the company explained, adding that “McDonald’s will continue to address climate change and this global health crisis, as trying as it is, is an important reminder for companies like ours to keep a long-term mindset.”

It’s no secret that the President Trump has worked aggressively to undercut the work of corporations that support action on climate change. Nevertheless, REBA continued to grow in influence all throughout his term in office. Its powerful impact on corporate purchasing demonstrates the futility of propping up fossil energy interests in the coming years, especially not when the bottom-line tilts ever more sharply in the direction of sustainability.

Image credit: PxHere

Tina Casey headshot

Tina writes frequently for TriplePundit 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.

Read more stories by Tina Casey