Interested in the forecast of where the renewable energy market is headed, you merely must have to check with the world’s biggest technology companies. The technology titans — Amazon, Facebook, Apple, Google, Microsoft- have always been at the forefront of renewable energy procurement. Lately, midsize companies such as Salesforce have also pushed the industry forward.
As the world’s largest electricity buyers, they have wielded their immense purchasing power to transform the industry. They set the bar for corporate sustainability objectives, and each year they move that bar higher. As we head into 2021, these will be the new goal markers we predict corporate renewable energy purchasers will be reaching toward due to the tech titan’s leadership.
1. Social Justice Will Be An Integral Factor In Renewables Procurement
The Renewables Forward initiative plans to increase diversity and inclusion within member corporates and the industry. The George Floyd and Black Lives Matter movement protests have sent ripples through every business and every boardroom, affecting issues far beyond police brutality.
Companies aren’t just taking a more in-depth look at the diversity of their employees. They are also reevaluating how they support social justice through their business practices and procurement.
When it is about renewable energy market, Microsoft has set an innovative model that we expect others will follow. In July, Microsoft committed to developing a portfolio of 500 megawatts of solar power projects in under-resourced communities in the United States, working with neighborhood leaders and prioritizing minority and women-owned companies.
The business will also aim to secure in “communities which are economically under-resourced, disproportionately affected by pollution and/or lack access to the advantages of clean energy development”. Another leader in this area is Salesforce, which recently released its”more than a Megawatt” paper, which offers a starting framework and specialist third-party advice about the best way best to maximize the positive consequences of renewable energy investments and reduce the adverse effects.
They’re not the only ones. This year LevelTen was requested by numerous corporate buyers to assess social justice criteria when choosing a renewable energy project for a power purchase agreement.
These buyers not only need to understand how the project will positively affect the community — such as reducing pollution, making tax revenue, and creating jobs — they also need to learn how the developer of the project treats its workers, such as diversity and fair pay. They also want to ensure that the programmer creates supply chain liability and adheres to responsible business practices.
To be more competitive, developers will need to reevaluate their own companies, and many are already starting to do so. A couple of weeks ago, a group of solar and renewable energy businesses and trade organizations established an initiative named Renewables Forward, which will develop concrete actions to improve workforce diversity and inclusion throughout the industry.
2. More Business Will Aim To Be 100% Renewable Constantly
First, the goal was to be carbon neutral. After that, 100% renewable. And then, carbon negative. And today, thanks to Google, the new objective is to become 100% renewable every hour of every day. Companies can claim they are “100% renewable” by buying enough clean power to cover the total amount of energy they use yearly — not on an hourly basis.
In other words, “100% renewable” means that organizations are consuming over the renewable energy they are buying at several hours of their day. So, although these businesses may have attained a”100% renewable” goal, fossil fuels have to support their energy requirement so you can watch a cat video on YouTube, do a little online shopping on Amazon, email your coworker on Outlook, or surf Facebook on your own iPhone at night. Every tech company leads to this.
Google wants to remove the need for fossil fuels together by fitting the renewable energy production period to the time the energy is consumed. The business has developed a new technology that changes its biggest data centers’ electricity needs to match the clean energy source to get there. The company is also searching for ways to boost its renewable energy procurement with PPAs. In Google’s white paper describing its strategy for 24/7 fresh energy, the company said:
“In 2010, Google contracted its first Power Purchase Agreement (PPA) for power by an Iowa wind farm, assisting to popularize a tool which has become a mainstay for businesses that buy renewable energy. Yet as important as conventional PPAs have been and will continue to be, they also have limitations.
We can break down barriers that prevent Google and others from purchasing clean energy by creating new transactional approaches, such as 1) moving from single-source PPAs to multi-source and multi-technology blended PPAs, 2) generating utility programs to enable wider access to affordable, clean energy, and 3) creating new models where multiple users may share clean energy resources.”
Fortunately, the new technology doesn’t have to be invented to make this happen. Examples of these kinds of transactional approaches that exist now include 1) the portfolio of solar and wind PPAs which Starbucks entered into the past year; 2) Constellation’s CORE+ program, which allows its business customers to advocate new development projects; and 3) the partnership between Cox Enterprises, Bloomberg, Gap Inc., Salesforce and Workday to collectively buy 42.5MW of solar energy this past year.
3. More Businesses Will Commit To Decreasing Scope 3 Emissions Through Supply Chain Initiatives
Scope 3 Emissions result from the creation and use of an organization’s goods and are often the greatest source of emissions for a company. By way of instance, Scope 3 emissions from production constitute about 75 percent of Apple’s total carbon footprint.
Unlike Scope 1 and 2 emissions, which a company can decrease through energy efficiency measures and renewable energy procurement, Scope 3 emissions are out of the corporation’s direct control, so they’re the toughest to reduce. That is not stopping them from trying.
For example, Apple has a goal to transition the power used across its entire manufacturing supply chain to 100% renewable sources by 2030. During Apple’s Supplier Clean Energy Program, 71 manufacturing partners in 17 countries have committed to 100% renewable energy for Apple production.
As a consequence of the program, Taiwan Semiconductor Manufacturing Company, and Apple provider, signed the biggest corporate PPA to-date in August, a 20-year contract for the whole output of a 920 MW offshore wind farm owned by Ørsted in Taiwan.
Facebook, Amazon, Google, and Microsoft are also have dedicated to reducing emissions in their supply chain. Given the size of the supply chains, this will have enormous repercussions around the globe.
Their providers in Europe and Asia are turning to renewable energy procurement for the first time, transforming international energy markets. Based on BloombergNEF, the first half of 2020 saw significantly higher procurement volumes in Europe, Australia, and Taiwan than last year.
One-way corporations can help their suppliers buy clean energy via buyer aggregation; the company can team up with many suppliers to buy the whole output of a job. We hope to see more of those aggregated deals next year.
4. Electricity Storage Will Be Added to PPA Portfolios
In 2021, Corporations will not only be signing PPAs with solar and wind projects, but they will also be doing deals with utility-scale storage jobs.
There are a few renewable energy market reasons for this:
- They are economically attractive. The industry has climbed to the point where prices to create jobs have diminished, and more storage jobs are getting to be accessible to enter into contracts — as we have seen on the LevelTen Marketplace. Moreover, storage jobs have the special ability to control when electricity costs are low and sell when energy costs are high, allowing off-takers to catch the gap and equilibrium wholesale market exposure in their renewable energy portfolio.
- They extend access to clean energy. Corporations (such as Google) who want to coincide with the period of energy use to the period of energy production frequently invest in a portfolio of solar and wind projects to maximize the number of hours that clean energy has been generated each day. Those hours could be extended with storage, ensuring that clean energy has been made available once the wind is not blowing and the sun is not shining. This can be when fossil fuels are used the most, which means storage considerably reduces emissions.
However, Facebook has not publicly proclaimed any storage contracts. It’s investing in technology. Facebook and Carnegie Mellon University recently declared they are trying to utilize artificial intelligence to locate new “electrocatalysts,” which can help store energy generated by renewable energy resources. Besides the technical challenges of preserving energy, grid utilities, and infrastructure will have to adapt to the new capacities. But with the appropriate policies and regulatory frameworks in place, the energy storage market is expected to flourish, and corporations will help fuel that growth.
5. The 2030 Deadline Will Drive Innovation
Many of the Tech firms’ most ambitious sustainability goals are set for 2030. Though a decade might feel like a very long time, it may take years to develop, fund, and construct a new renewable energy project.
At exactly the same time, these companies have to keep up with a constantly growing demand for energy. It’s not sufficient to cover their current energy use. They also have to be ready to cover what they will use years from now.
Corporations are up against the clock and can not sign deals quickly enough. The current PPA process is time-consuming and too manual to fulfill their needs. We forecast that new solutions will appear, either from the technology titans from other market participants, to construct the renewable energy trade infrastructure required to get deals done quicker.
Alternative Energy Stocks To Watch For Q1 2021
Alternative energy stocks and the renewable energy market have always been something investors have thought of. However, it was only more recently that we have seen a legitimate push from investors. The average investor would have thought of them as a complement to their investment plan when considering energy stocks to purchase. However, heading into 2021, alternative energy stocks might be taking a larger portion of the business’s spotlight.
A lot of that’s to do with President-elect Joe Biden. His government’s stance on fossil fuels or decrease reliance on them has caused a shakeup among energy stocks. The Biden government has a $2 trillion strategy to combat climate change by encouraging things like solar energy and battery technology, renewable energy, and electric vehicles.
Once ruled, gas and oil are now seeing a far more competitive and larger increase in green energy recently. These are not just power generation companies. We are also seeing infrastructure firms benefiting from an increasing interest in alternatives.
What’s more, is the demand from investors for renewable energy stocks may have been clearer than when almost each of the electric automobile stocks exploded this year. It didn’t matter whether the firm had a prototype or even only a memorandum of understanding in place. If a press release mentioned the two words”electric car” or “E.V.,” dealers were all over them.
Alternative Energy Stocks For 2021:
First Solar Inc (NASDAQ: FSLR)
Enphase Energy Inc (NASDAQ: ENPH)
ReneSola Ltd (NYSE: SOL)
SunPower Corporation (NASDAQ: SPWR)
Sunrun Inc (NASDAQ: RUN)
Tesla Inc (NASDAQ: TSLA)