The current update of the European Union’s energy policy framework will impact the European energy market for years to come. As many leading businesses look to source 100% renewable power globally, our Head of RE100, Sam Kimmins, blogs on an important change needed to the Renewable Energy Directive (REDII), to maximize corporate uptake of renewables in Europe.
RE100 is a global collaborative initiative bringing together over 100 influential and multinational businesses that are committed to sourcing 100% renewable electricity globally. Together, they represent more than enough renewable electricity demand to power Poland.
These companies have made this highest-level commitment because they know that renewable electricity makes long-term business sense. The technology is ready, unsubsidized costs are competitive, and companies are ready to invest at scale.
Corporate sourcing of renewables represents a major new flow of capital and finance into Europe’s renewable electricity infrastructure. Much of the electricity used by our members in Europe is already from renewable sources, and they are leading the way through a combination of power purchase agreements (PPAs), on-site generation, green contracts and certificates.
IKEA Group, a founding member of RE100, owns more wind turbines than stores and is aiming to produce as much energy as it consumes by the end of the decade. The company has also invested an impressive $1.78 billion (€1.5 billion) in purchasing its own wind and solar power generation equipment since 2009 and in FY15 committed a further $715 billion (€600 million).
Last year, Mars, Inc. signed a PPA for a wind farm in Scotland to power its entire UK operations.
RE100 members Royal DSM, Google, Royal Philips and AkzoNobel joined forces to sign an exciting joint PPA for 350 gigawatt hours per year in the Netherlands.
And Microsoft, which has invested more than $3 billion in Europe to date, has continued to champion renewables. John Frank, Vice President EU Government Affairs, Microsoft said back in May: “As our cloud continues to grow, so does the energy consumption of the data centers that power the cloud. We are committed to using more renewable energy to meet those needs, and we believe that this is good for our business, the economy, and the environment."
He added: "We’re pleased to play a part in supporting this important and growing sector in the EU and welcome new policies that enable us to develop and deploy greater amounts of renewable energy.”
But not every business is sourcing renewables in Europe yet – how can forthcoming changes to the EU’s energy policy framework accelerate the growth of this movement, boosting business competitiveness, while delivering on the Paris Agreement?
Let’s be clear – corporate buyers are not looking for subsidies. Renewables are increasingly cost-competitive with fossil fuels. What we need is a clear, transparent and fair electricity market with long-term stability, that enables companies to purchase or generate renewable electricity for all of their operations in Europe.
Over the last year, RE100 reports and events supported by our members have helped to raise awareness among Members of the European Parliament (MEPs). The answer now lies in a recent amendment to the Clean Energy for All Europeans package, tabled by MEPs José Blanco López and Eva Kaili.
Amendment 757 to the Renewable Energy Directive Article 15 Paragraph 9 (below) provides for the clear, transparent and fair electricity market needed to innovate new renewable electricity investment models, scale up investments and achieve our shared renewable electricity ambitions.
Amendment 757 to the Renewable Energy Directive Article 15 Paragraph 9 full text:
Member States shall carry out an assessment of the barriers to and the potential of the purchase of energy from renewable sources by corporate customers in their territories and shall set up an enabling regulatory and administrative framework for the growth of this new way to finance renewables and facilitate their uptake.
In particular, such enabling framework shall comprise the possibility for all customers, individually or through aggregators, to sign one or more single-buyer or multiple-buyer power purchase agreements with on-site, nearby and off-site electricity generating installations using renewable sources. Such power purchase agreements shall be deemed compatible with competition rules and with support schemes for renewable energy and shall not be subjected to burdensome procedures and excessive costs. Member States may allow a single power purchase agreement to be signed between an electricity generating installation using renewable sources and a corporate customer to cover the consumption of multiple sites belonging to the corporate customer.
RE100 is calling on MEPs and EU Member States to support this Amendment because it makes provision for corporate buyers – an important new market that can drive rapid growth in renewable electricity investment.
Specifically, it:
- focuses on the removal of market barriers and burdensome costs, to enable a more effective, competitive market in which corporate customers can purchase electricity from the provider of their choosing;
- provides a flexible but enforceable framework through which EU Member States can develop locally appropriate solutions;
- encourages competition and innovation in electricity markets;
- recognizes the importance of market innovation (e.g. PPA models) in enabling a wide range of corporate off-takers and renewable electricity suppliers to participate in the renewable electricity market; and,
- enables the market to play a stronger role in driving the development of EU renewable electricity capacity well beyond the modest ambition of 27% by 2030.
The inclusion of Amendment 757 will strengthen REDII’s ability to deliver a renewable electricity system that meets the needs of a growing number of corporate buyers, attracts corporate investment, and shows global leadership in energy market innovation.
We’re looking to everyone in the European Parliament to support its progress though the coming months, to help many more companies to reach their goal of becoming 100% renewable.
RE100 is brought to you by The Climate Group in partnership with CDP.