6 Ways Utilities Are Meeting Corporate Demand for Renewable Energy
By Letha Tawney, Celina Bonugli and Daniel Melling
Utilities are breaking away from traditional electricity products to offer customers access to large-scale renewable energy. Until very recently, utilities did not differentiate the sort of power they offered customers. With very few exceptions, everyone shared in the cost and used electricity from the same fleet of power generating stations.
But over the past four years, even regulated U.S. utilities have begun to offer new, large-scale renewable energy options to customers. World Resources Institute data shows that across ten U.S. states, utilities now offer 13 green tariffs—programs that let customers purchase large-scale renewable energy over the grid.
We take a closer look at the trends and motivations that have made utilities important players in the rapid scale up of renewable energy to serve corporate buyers in the U.S.
1. Why are utilities stepping up?
In markets where wind and solar power have become cost competitive, utilities have more economic incentives to add renewable energy. Renewable resources just offer a great low price for the next 20 years—without the risks of fossil fuel price spikes.
Utility leaders overwhelmingly anticipate substantial solar and wind power growth in the next ten years, according to
Utility Dive's 2017 survey of the sector. Among utility executives, 71 percent say utility scale wind will increase moderately or significantly over the next ten years and 82 percent predict the same for utility scale solar.
Recently, Pat Vincent-Collawn, CEO of PNM Resources announced a plan to eliminate coal by 2031 and move toward renewables and natural gas, calling it "the best, most economical path to a strong energy future for New Mexico." WEC Energy Group CEO Allen Leverett told shareholders in May 2017 that the company is exploring solar, "probably the biggest change we've seen in last five years is solar and the cost of solar. The technology curve really has fallen fast in terms of improvement in cost."
Mid-American, a Berkshire Hathaway Energy subsidiary, has talked about their extensive investments in wind in the same way—as an effective way to keep prices low for customers. The company also used their wind investments to serve the renewable energy requirements of major data centers, such as Facebook and Google, in their service territory.
2. How big is the demand for renewable energy on the grid?
Through RE100, 90 companies have committed to 100 percent renewable power. Clean energy and greenhouse gas reduction targets are now the norm for Fortune 500 and Fortune 100 companies. World Wildlife Fund and Ceres' Power Forward 3.0 report shows that almost half of the Fortune 500 and a majority of the Fortune 100 now have climate and energy targets.
Companies with renewable energy commitments can
only go so far with on-site solar and efficiency. To meet the most ambitious targets, like a 100 percent renewable energy goal, companies have to tap into the grid and are turning to their utility to provide solutions.
Big businesses have communicated their needs to U.S. utilities. Sixty-five companies have signed on to the Renewable Energy Buyers' Principles, which tell utilities and other suppliers what industry-leading, multinational companies are looking for when buying renewable energy from the grid.
And utilities are listening. Utilities without green tariffs or state mandates are still considering new renewable energy options to attract businesses. Describing a new wind project, Appalachian Power's new president Chris Beam
told the Charleston Gazette Mail, "at the end of the day, West Virginia may not require us to be clean, but our customers are […] we have to be mindful of what our customers want."
3. How are utilities stepping up?
To meet customer demand for renewable energy, traditional utilities have now created 13 green tariff options across 10 states. In the six months since the last update to World Resources Institute's issue brief, Emerging Green Tariffs in U.S. Regulated Electricity Markets, utilities have added three more green tariffs options—including the first offered by a public power company, Nebraska's Omaha Public Power District.
States with renewable energy options are more competitive when attracting high-growth corporate business. When Omaha Public Power District announced a new green tariff to supply a Facebook data center, Tim Burke, Omaha Public Power District's president and CEO, told the Omaha World-Herald, "we have several customers right now that are putting together potential expansion projects and will utilize that (new) rate to grow."
4. What is the impact of green tariffs on the grid?
Who is using these tariffs? To date, customers have contracted for approximately 900 MW of new renewable energy under five of the tariffs. This is approximately enough electricity to power 160,000 average American homes a year. This spring, utilities and customers are negotiating hundreds more megawatts of additional purchases.
5. How can customers keep up with these new options?
World Resources Institute's interactive U.S. Renewable Energy Map: A Guide For Corporate Buyers shows all the green tariffs that utilities offer across the nation. The map also details one-on-one special contracts that customers have signed with utilities. These special contracts show a utility is willing to explore options, even if they haven't gone as far as creating a new tariff.
6. What's next?
Today green tariffs are a small part of the overall U.S. renewable energy market—reflecting their pilot status. But the programs create a runway for renewables at a time when demand is only increasing, not just from businesses, but also cities, universities, hospitals and smaller companies.
Innovative partnerships will continue to emerge between utilities and their customers as both grapple with the rapidly changing electricity sector. Green tariffs are only three years old, but with increasing demand, interest in renewables by utilities and the continued fall in renewable energy prices, green tariffs look like they're here to stay.
At first glance, you wouldn't think avocados and almonds could harm bees; but a closer look at how these popular crops are produced reveals their potentially detrimental effect on pollinators.
Migratory beekeeping involves trucking millions of bees across the U.S. to pollinate different crops, including avocados and almonds. Timothy Paule II / Pexels / CC0<p>According to <a href="https://www.fromthegrapevine.com/israeli-kitchen/beekeeping-how-to-keep-bees" target="_blank">From the Grapevine</a>, American avocados also fully depend on bees' pollination to produce fruit, so farmers have turned to migratory beekeeping as well to fill the void left by wild populations.</p><p>U.S. farmers have become reliant upon the practice, but migratory beekeeping has been called exploitative and harmful to bees. <a href="https://www.cnn.com/2019/05/10/health/avocado-almond-vegan-partner/index.html" target="_blank">CNN</a> reported that commercial beekeeping may injure or kill bees and that transporting them to pollinate crops appears to negatively affect their health and lifespan. Because the honeybees are forced to gather pollen and nectar from a single, monoculture crop — the one they've been brought in to pollinate — they are deprived of their normal diet, which is more diverse and nourishing as it's comprised of a variety of pollens and nectars, Scientific American reported.</p><p>Scientific American added how getting shuttled from crop to crop and field to field across the country boomerangs the bees between feast and famine, especially once the blooms they were brought in to fertilize end.</p><p>Plus, the artificial mass influx of bees guarantees spreading viruses, mites and fungi between the insects as they collide in midair and crawl over each other in their hives, Scientific American reported. According to CNN, some researchers argue that this explains why so many bees die each winter, and even why entire hives suddenly die off in a phenomenon called colony collapse disorder.</p>
Avocado and almond crops depend on bees for proper pollination. FRANK MERIÑO / Pexels / CC0<p>Salazar and other Columbian beekeepers described "scooping up piles of dead bees" year after year since the avocado and citrus booms began, according to Phys.org. Many have opted to salvage what partial colonies survive and move away from agricultural areas.</p><p>The future of pollinators and the crops they help create is uncertain. According to the United Nations, nearly half of insect pollinators, particularly bees and butterflies, risk global extinction, Phys.org reported. Their decline already has cascading consequences for the economy and beyond. Roughly 1.4 billion jobs and three-quarters of all crops around the world depend on bees and other pollinators for free fertilization services worth billions of dollars, Phys.org noted. Losing wild and native bees could <a href="https://www.ecowatch.com/wild-bees-crop-shortage-2646849232.html" target="_self">trigger food security issues</a>.</p><p>Salazar, the beekeeper, warned Phys.org, "The bee is a bioindicator. If bees are dying, what other insects beneficial to the environment... are dying?"</p>
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