As 100 leading businesses transition to 100% renewable power through RE100, The Climate Group’s Sam Kimmins reflects on the growing corporate movement for renewable energy and its impact on the global economy.
When one global company stands up and declares an interest in renewable electricity, people take note. When 100 global companies stand up and declare their commitment to 100% renewable electricity, we create a tsunami of change.
That’s exactly what RE100 is doing; 100 of the world’s biggest and most influential companies are now committed to 100% renewable power, with AXA, AkzoNobel, Burberry and Carlsberg Group the latest of the big names to sign up.
This is an important milestone. When The Climate Group launched RE100 in 2014, many businesses considered 100% renewable electricity to be an impossible stretch goal, largely due to the additional cost and a lack of options in developing markets. But 13 leading companies including IKEA Group, Swiss RE, BT and Mars were prepared to put their heads above the parapet.
Three years later, more than half of our 100 members are going 100% renewable by or before 2020 – and several have already made it. Leading companies are recognizing that affordable options are increasingly available, and that future success means embracing renewables – sooner rather than later. RE100 has succeeded in changing the conversation around business and renewable energy, and what was deemed impossible is quickly becoming the norm.
Our members now represent 146 terawatt-hours (TWh) per year of renewable electricity demand – the equivalent of the electricity required to power Poland or New York State. That’s a long way from where we were in 2014, with 13 companies representing 19 TWh. And with members operating around the world, from Europe and North America to Asia, South America and Africa, RE100 is at the forefront of a truly global movement.
Tipping point
So – how important is this in terms of addressing climate change? Are we about to reach a ‘tipping point’, whereby a transition to a renewable electricity system becomes unstoppable, and the end of fossil fueled power becomes a medium-term certainty?
For the first time in my career, it’s very encouraging to realize we’re actually ‘winning’ on a global scale. Back in the year 2000, I was a consultant working on B&Q’s first solar store in Sutton in Ashfield, UK, featuring almost 200m² of roof mounted solar – generating just under 8 kilowatt peak. At that time, the total global solar power capacity installed was around 4 gigawatts (GW). According to the International Energy Agency’s (IEA’s) 2002 outlook, renewables were only supposed to “make a small dent” in global energy capacity – around 4.4% by 2030.
Now, just 15 years on, renewable power generating capacity exceeds 1,811 GW and accounts for more than 28% of global capacity. Our “small dent” is becoming a mighty crack in the status quo.
The technology is certainly ready, and rapidly falling costs are proving to be a game changer. The World Economic Forum reports that solar and wind generation is now the same cost or cheaper than new gas and coal in 30 countries worldwide. Power Purchase Agreement prices for solar power have fallen by about 75% over the last seven years, meaning they are now around $50/megawatt-hours (MWh) per year in the US, and close to $30/MWh in many other areas of the world. It’s making renewables a more affordable option for business.
Battery production is also stepping up to the plate to deliver storage to cover intermittent demand, and smart technologies are enabling both demand and supply side load management.
So maybe we have already hit that elusive tipping point. How will we know? Gigawatts of new renewable installations have exceeded new fossil fuel installations every year since 2012. It’s likely that the fossil fuel power industry has already hit its ‘Kodak Moment’, after which its decline and replacement by new technology becomes an inevitability.
But a 200-year-old fossil fuel habit can be hard to shake off, even when it makes great business sense.
Outdated policy and market structures, designed for old centralized power systems, must be updated to enable the flow of capital from companies and others wishing to buy renewable electricity – whether it be in Europe, China or South Australia.
Awareness of the new opportunities presented by renewables is lower than it could be even in the corporate world, and we need to supercharge the often-glacial pace of energy policy review before government programs lock much of Asia and Africa into long-term investments in expensive and polluting legacy technologies.
With RE100, we are determined to accelerate change at a global scale. Through collective corporate demand for renewable electricity, and the huge investment this represents, RE100 companies represent an unavoidable force for action – a call for governments, utilities and other solution providers to create electricity markets fit for a low carbon economy.
Change is well underway. Where we have seen US President Trump take a lonely back seat on climate action, our members are stepping in with calls for bold action – backed up with gigawatt-scale, business focused investments in renewable electricity infrastructure. For example, Starbucks recently invested in a new 47 MW solar farm in North Carolina and a new long-term renewable electricity tariff in Washington State, which will together generate enough renewable electricity to power over 700 stores.
At EU level, progressive policymakers have found unexpected allies in our membership. Google and IKEA have led calls for ambitious targets and plans enabling long-term investment in renewables, as part of the Clean Energy for All Europeans package. We look forward to helping our members promote a progressive, modern Package once parliament reconvenes in September.
But the fact is, to keep warming well under two degrees Celsius, we need to pick up the pace. That’s why The Climate Group is calling on leading companies to influence their peers and suppliers to switch to 100% renewable electricity too, so that we may move faster to a strong, low carbon economy supporting millions of jobs.
Some of our members, such as Apple and H&M, are already doing this. Already 96% renewable in its own operations, Apple has now secured commitments from eight of its suppliers to produce all of their Apple products using 100% renewable electricity.
Business action spurs business action. We have ambitious plans for growing both our membership and our influence over the next three years – we’d welcome you to join us.
Sam Kimmins is Head of RE100, The Climate Group.