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Clean energy enters business mainstream

An international organization found 8% of 2,410 large companies it surveyed last year got at least half their electricity from renewable energy.

Some companies are investing in electric vehicles
Some companies are investing in electric vehicles (AN/J. Heilprin)

An international organization found 8% of 2,410 large companies it surveyed last year met at least half their electricity needs from renewable energy sources like wind and water.

The International Renewable Energy Agency, or IRENA, based in the United Arab Emirates, said 200 mostly European and North American companies reported more than half the electricity they consumed came from renewables. Just 2%, or 50 companies, reported all their electricity came from cleaner, non fossil fuel-burning energy sources.

Among major businesses surveyed for their use of clean energy were Microsoft, Intel, Alphabet, Deutsche Bahn, Volkswagen, IKEA, East Japan Railway Co. and Rio Tinto. The list reflects the huge energy needs big technology companies incur. As a result, telecoms and technology companies have been at the forefront of buying power from renewable sources.

Together, the companies surveyed paid for 465 terawatt (TWh) hours of electricity from renewable energy sources last year, or 85% of France's 550 TWh needs, IRENA reported. France, a leader in low-carbon electricity generation, gets 73% of it from nuclear power and 18% from renewable energy sources. The rest comes from gas and coal.

IRENA lauded the findings at a conference in Copenhagen last week as evidence that businesses are increasingly reliant on renewable energy sources, like wind and water. That helps the world meet its commitments under the 2015 Paris Agreement on climate change, which aims to keep rising global temperatures in check. It was the first global, comprehensive analysis of corporate sourcing, IRENA said, so there were no previous years to compare it with.

Renewable energy sourcing has become a mainstream pillar of business strategy, said IRENA's Director-General Adnan Z. Amin. “While environmental concerns initiated this growing trend," he said, "the strengthening business case and price stability offered by renewables can deliver a competitive advantage to corporations, and support sustainable growth.”

Other international organizations recently suggested creating a new global fund to accelerate creation of new technology that can fulfill the Paris accord, which was brokered within the framework of the United Nations Framework Convention on Climate Change.

IRENA's survey of 2,410 companies in 2017
IRENA's survey of 2,410 companies in 2017 (AN/IRENA)

Change in energy consumption

By volume, IRENA said, the majority of renewable electricity was consumed in the materials sector. The highest shares of renewable electricity consumption were found in the financial (24%) and information technology (12%) sectors.

But it said only 17% of companies it surveyed adopted a target for their consumption of renewable electricity, and 75% of their existing targets only take them to 2020.

Clean power from renewable energy sources is attractive partly because prices for it are declining. It often is the cheapest source of electricity, and companies have used their longterm contracts for energy from wind and solar farms as hedges against inflation in wholesale prices.

The Paris-based Renewable Energy Policy Network for the 21st Century, or REN21, says fighting climate change will require a change in energy consumption in all power sectors. Its chairman emphasized the importance of fulfilling the Paris accord's goal of preventing Earth from heating more than 2 degrees Celsius beyond the industrial age.

"When REN21 was founded in 2004, the future of renewable energy looked very different than it does today," Arthouros Zervos, an engineering professor at the National Technical University of Athens who chairs REN21, reported last year.

"No one imagined then that in 2016 renewable energy would account for 86% of all new EU power installations; that China would become the renewable energy power house of the world; and that more than half of global renewable energy investments would happen in emerging economies and developing countries," he said.

The world has already warmed about 1.1 degrees Celsius since the Industrial Revolution. The vast majority of scientists say fossil fuel-burning is causing the Earth’s climate to change because of the buildup of gases that trap heat in the atmosphere like a greenhouse.

"Holding global average temperature rise well below 2 degrees Celsius, not to mention a much safer limit of 1.5 degrees Celsius, requires nothing short of a complete decarbonization of the energy sector," Zervos wrote.

"There is no one way to achieve this; what works in one country doesn’t necessarily work in another. Finding solutions for some sectors is easier than for others," he said. "The stakes are high — financially, environmentally and socially — and as the transition progresses, there will be clear winners and losers."