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January 2015 | Insight Briefing | Analyzing the issues that matter to the Clean Revolution
INTRODUCTION
RENEWABLE POWER PROVIDES A WIN-WIN
OPPORTUNITY DELIVERING BUSINESS VALUE
AT THE SAME TIME AS CUTTING CARBON.
AND MAJOR BUSINESSES RECOGNIZE THIS.
To meet the worlds growing demand for energy, the most influential companies are finding innovative
ways to decarbonize their power use. Driven by increasing electricity prices and internal commitments
to reduce carbon emissions, shifting to clean energy is one area where business and sustainability
strategies are perfectly aligned.
And the smartest companies are going even further than their peers. Theyre making firm
commitments to be 100% renewable as an integral part of their business strategies. Such bold
decisions will help them meet their future energy needs in a carbon-constrained world.
This doesnt mean the journey to 100% renewable is an easy one. But it is achievable; and the rewards
are demonstrably worth the commitment required.
For example, as well as seeing the value of direct investments in renewable power, companies are
also benefitting from indirect investments, such as supporting power developers and utilities through
long-term power purchase agreements, and taking advantage of renewable electricity tracking
instruments.
This RE100 Briefing Report provides a snapshot of current global trends in corporate demand for, and
investment in, renewable power. It is the first report from RE100, a global campaign working with the
worlds most influential businesses on their journeys to becoming 100% powered by renewables.
15 OF THE WORLDS MOST INFLUENTIAL
BUSINESSES HAVE JOINED RE100 AND
MADE A GLOBAL COMMITMENT TO 100%
RENEWABLE POWER.
RE100 INSIGHT briefing | JANUARY 2015
As part of the RE100 campaigns ongoing work to chart the unique pathways bold business leaders are
taking to the 100% goal, this Briefing shares insights into the action of individual companies to date,
and illustrates emerging trends in renewable power options. Importantly, it also highlights where
barriers to further progress exist and identifies how RE100 will play a role in addressing them.
The Climate Group has joined forces with CDP, We Mean Business1 and IRENA to kick start RE100. And we
will work closely with other leading organizations supporting the scale up of renewable power.
Through reading this Briefing and seeing the progress already being made by leading businesses around
the world, we hope you will be inspired to join us on our journey to 100% renewable power.
MAPPING THE JOURNEY
DECARBONIZING POWER SUPPLY
We already know why we need to decarbonize our power supply and even how we will achieve it.
It goes without saying that climate change is forcing the world to accelerate efforts to reduce
emissions, and transitioning our ever-increasing power use to low carbon energy has the potential to
make the biggest impact. The International Energy Agency suggests that to stay within a two-degree
global temperature rise scenario, 42%2 of electricity must be generated from renewables by 2030, and
57% by 2050.
There is also a wealth of information about todays growing levels of renewable power supply. In 2013,
renewable energy (including large hydropower) accounted for 22.1% of electricity generation. And
based on a raft of new, bold policy initiatives, it is likely the trend toward renewable power generation
will continue.
Figure 1. Estimated renewable energy share of global electricity production, end of 2013
Wind
fossil fuels and nuclear
2.9%
77.9%
Hydropower
Renewable
electricity
16.4%
22.1%
Bio-power
1.8%
Solar PV
0.7%
Geothermal,
CSP and ocean
12%
Source: REN21, Renewables 2014, Global Status Report (GSR 2013).
Based on renewable generating capacity in operation end-2013. Data does add up due to rounding. The GSR
2013 reported a global total of 990 GW of hydropower capacity at the end of 2012; this figure has been revised
downward due to better data availability. This adjustment also affects the global figure for total renewable
power capacity. In addition, global hydropower data and thus total renewable energy statistics in this report
reflect an effort to remove capacity of pure pumped storage from the totals. For more information, see
Methodological Notes, page 142 of GSR 2013.
1
We Mean Business is a coalition of organizations including BSR, The B Team, CDP, Ceres, The Climate Group, The Prince of
Waless Corporate Leaders Group and WBCSD
2
REN21, appraisal of the IEAs 2012 Energy Technology Perspectives report in Renewable Global Futures Report, 2013
RE100 INSIGHT briefing | JANUARY 2015
New renewables have played an increasingly important part in electricity generation over the last
ten years.3 In Figure 2, the third line shows the share of world electricity generation represented by
renewable energy excluding large hydro. This rose in 2013 to 8.5%, compared with 7.8% in 2012 and 5.2%
in 2007. Overall, renewables (excluding large hydro projects) accounted for 41.3% of the new generating
capacity installed worldwide in 2013.4 This demonstrates that new renewable power is steadily
increasing its foothold in overall generation, and there is no sign of this trend changing.5
Figure 2. Renewable power generation and capacity as a proportion of global power, 2006-2013 (%)
50%
43.7%
38.9%
40%
28.8%
30%
30.5%
41.4%
32.4%
18.5%
20%
10%
0%
7.6%
8.3%
9.2%
10.2%
11.4%
5.2%
5.3%
5.9%
6.1%
6.9%
12.6%
13.7%.
7.8%
8.5%
Renewable power capacity change as a % global power capacity change (net)
Renewable power as a % global power capacity
Renewable power as a % global power generation
Source: Frankfurt School, FS-UNEP Collaborating Centre and Bloomberg New Energy Finance, Global Trends In
Renewable Energy Investment, 2014
However, while these high-level overviews provide useful context for mapping the overall path toward
decarbonizing the power sector from a supply perspective, we currently have less understanding of
the role played by energy users such as businesses and how they are shaping the future of the power
market.
DECARBONIZING POWER SUPPLY
It is difficult to map the current total global demand for renewable energy from the private sector.
Overviews exist for energy flows in general, but understanding business demand for renewable power
specifically is more challenging to chart. Power companies and governments simply arent reporting on
private sector use of renewable power in a way that is practical to collate.
But what is clear, is that a growing number of major businesses are determined to take all measures
available to decarbonize their own energy use. A report from sustainability non-profit Ceres found 14%
of the Fortune 100 have specific renewable energy commitments.6 These businesses decisions have
been driven by rising and volatile energy prices, soaring costs of carbon, the threat of imminent carbon
pricing and increasing high-profile leadership in the fight against climate change.
3,4,5
Frankfurt School, FS-UNEP Collaborating Centre and Bloomberg New Energy Finance, Global Trends In Renewable Energy
Investment, 2014
6
Ceres and David Gardiner & Associates, LLC, Power Forward: Why the Worlds Largest Companies Are Investing in Renewable
Energy, 2012
7
CDP, Climate Change Program Reports
RE100 INSIGHT briefing | JANUARY 2015
While it is challenging to quantify what exactly this transition means for global renewable power
demand, we can see what companies are currently doing by analyzing CDP Climate Change 2013 and
2014 questionnaire data7, which is based on companies voluntarily reporting information from calendar
or financial years 2012 and 2013. The full data set is limited, because only around 500 companies
currently provide enough information about their investments and carbon emission reductions from
renewable power investments to provide a data pool of approximately 650 investments, amounting
to almost US$10 billion. However, our analysis of the data available provides a useful insight into how
companies are using renewables to decarbonize power demand. It also highlights where RE100 can
provide real value in increasing the visibility of trends in corporate renewable power, by collecting even
more detailed data from companies through CDP.
APPROACHES TO SECURING RENEWABLE POWER
Developing and implementing strategies for increasing renewable power differs across sectors and
regions. Critical variables include the amount of power required, timing and geography, but businesses
also have to choose whether it makes more sense to make a direct investment or work with a power
provider and which renewable power technology will work best for their needs.
Based on the CDP data reviewed for this report, Figure 3 outlines the level of spend companies are
directing at various approaches to increasing renewable energy use. Figure 3 breaks this spend down
further by sector.
Figure 3. Breakdown of companies renewable power spend
% Of SPEND
Installation: Multiple
Installation: Wind
Installation: Solar PV
Purchase: PPA
Installation: Biomass
power or CHP
Purchase: ETI
40%
34%
19%
3%
2%
2%
Installation: Hydro
<1%
CDP, Climate Change Program Reports
RE100 INSIGHT briefing | JANUARY 2015
Figure 4. Breakdown of the number and type of renewable power investments by sector
Transport
Retail
Manufacturing
ICT
Heavy industry
Consumer products
Construction
Commercial and professional services
0
10
20
30
40
50
60
ENERGY EFFICIENCY
ALTHOUGH RE100 IS FOCUSED ON INCREASING
CORPORATE USE OF RENEWABLE POWER, IT
IS RECOGNIZED THAT ENERGY EFFICIENCY
HAS A KEY ROLE TO PLAY IN ENABLING
COMPANIES TO REDUCE OVERALL ENERGY
USE. IT IS OBVIOUS THAT REDUCING POWER
DEMAND ALSO REDUCES ENERGY COSTS. AND
IT IS CLEAR A JUDICIOUS MIX OF ENERGY
EFFICIENCY AND CLEAN POWER WILL BE
KEY TO A SUCCESSFUL AND FINANCIALLY
ATTRACTIVE DECARBONIZATION STRATEGY.
COMPANIES TAKING PART IN RE100 HAVE
COMPREHENSIVE ENERGY EFFICIENCY
PROGRAMS THAT WILL HELP THEM
ACHIEVE THEIR 100% RENEWABLE POWER
COMMITMENTS, BY REDUCING OVERALL
POWER DEMAND.
Installation: Biomass power or CHP
Installation: Wind
Installation: Hydro
Purchase: PPA
Installation: Multiple
Purchase: ETI
Installation: Solar PV
Note: This is based on a total of 549 renewable power investments reported to CDP in 2013 and 2014 where
companies provided financial and carbon saving information.
70
POWER PURCHASE AGREEMENT (PPA)
A POWER PURCHASE AGREEMENT IS A
CONTRACT BETWEEN AN ELECTRICITY
PURCHASER (ELECTRIC UTILITY OR END
CONSUMER) AND A PRIVATELY-OWNED
POWER PRODUCER FOR THE PURCHASE OF
ELECTRICITY GENERATED BY A SPECIFIC
PROJECT CONNECTED TO THE GRID. A PPA
DEFINES REVENUE FOR THE PROJECT, THE
SCHEDULE FOR THE DELIVERY OF ELECTRICITY
AND OTHER CONTRACTUAL TERMS. PPAS ARE
USED TO SECURE A REVENUE STREAM FOR A
PROJECT AND AS SUCH ARE AN INSTRUMENT
OF PROJECT FINANCE. PPAS ARE SUBJECT
TO POLICIES AND REGULATION AND TAKE
DIFFERENT FORMS IN DIFFERENT COUNTRIES
OR SUB-NATIONAL REGIONS. THE TRANSFER OF
ELECTRICITY TRACKING CERTIFICATES ISSUED
BY THE PRODUCER TO THE PURCHASER ARE
NORMALLY THE BASIS FOR CLAIMING ZERO
GREENHOUSE GAS (GHG) EMISSIONS AND
100% RENEWABLE ON THE POWER PURCHASED
THROUGH A PPA.
RE100 INSIGHT briefing | JANUARY 2015
THE VALUE IN OWNING POWER FOR BIG ENERGY USERS
The biggest energy users included in our data set are making the largest investments in their own
renewables installations. This suggests companies see real value in direct investment in renewable
power, whether they are on-site or off-site installations, and prefer direct investment to paying higher
and likely rising energy costs through existing power providers.
The most financially attractive direct investments made by the companies reviewed in our data (see
Figure 5), are in biomass energy to produce heat and power for industrial processes. However, solar
projects are also proving popular, and in some cases, wind makes commercial sense. As electricity
prices climb and companies gain more experience and insight into the technologies that best work for
them, it is likely the trend for direct investment in renewable installations will continue.
It will also be interesting to see the new technologies that emerge. For example, Formula E has made
a commitment to become the first motor racing championship to be powered by 100% renewable
power and is already demonstrating alternative fuels such as glycerine based Aquafuel that is used in
generators to power Formula E cars.
INDIRECT INVESTMENT IN POWER PROVIDERS
Across all business sectors, working with electricity companies and power providers to set up power
purchase agreements (PPAs) is a popular choice for companies that want to switch to renewable
power, but dont want to invest directly in power generation.
Supporting funding of renewables through PPAs makes sense for companies that have a large power
footprint across multiple facilities serviced by one power company, or those with a long-term and large
power footprint across fewer locations that dont offer good opportunities for renewable installations.
It takes out the risk of ownership of the renewable energy asset, but it also means the company cant
make a financial return. However, a company may secure longer term firm pricing or price reductions
through the PPA.
BT
In the UK, which represents approximately 85% of BTs total power use, the company has
a contract with energy company npower to supply 100% of its electricity from renewable
sources. BT has also entered into a number of PPAs directly with energy generators to purchase
renewable energy, supporting the creation of new wind farms and a large solar array in Suffolk.
BT plans to expand this further by reaching similar deals with energy providers outside the UK for
worldwide operations.
As part of the BT-npower renewable energy contract, npower has initiated carbon labeling of
electricity to provide assurance of its carbon status. Electricity is rated from A-G with A having
the lowest carbon content. BT purchases 100% A-certified electricity. BT hopes this labeling
system will increase demand for renewable energy and help increase investment in renewable
energy infrastructure.
Nestl
Following a power purchase agreement with Mexican wind-turbine company CISA-GAMESA, 85%
of the total electricity consumed by Nestls factories in Mexico is now supplied by wind power.
Nestl estimates that this will reduce air emissions, including GHGs, by more than 124,000
tons of CO2eq annually comparable to taking 39,000 small cars off the road. It is the first
food company in Mexico to obtain nearly all the electrical energy needed for its manufacturing
operations from a renewable source.
In the US, companies are keen to seek more options for purchasing renewable power directly from
utilities. A group of leading businesses have come together with the support of WWF-US and the World
Resources Institute to develop the Corporate Renewable Energy Buyers Principles8 in an effort to raise
WWF, Corporate Renewable Energy Buyers Principles: Increasing Access To Renewable Energy, 2014
GREEN ELECTRICITY TARIFFS
A GREEN ELECTRICITY TARIFF IS A
CONTRACT FOR ELECTRICITY SUPPLY
WHERE PART OR ALL OF THE ELECTRICITY
CONSUMED BY THE PURCHASER IS
MATCHED BY RENEWABLE ELECTRICITY
PURCHASES MADE BY THE POWER
SUPPLIER. THE CONTRACT BETWEEN THE
SUPPLIER AND THE POWER PURCHASER
CAN BE STRUCTURED IN DIFFERENT WAYS
WITH RESPECT TO THE QUANTITY AND
QUALITY OF RENEWABLE ELECTRICITY
THE PROVIDER WILL SUPPLY. THE POWER
SUPPLIER, USUALLY AN ELECTRIC UTILITY
OR OTHER POWER MARKETER, MAY
PURCHASE RENEWABLE ELECTRICITY
FROM A VARIETY OF SOURCES AND
PROJECTS CONNECTED TO THE ELECTRIC
GRID. THE BASIS FOR THE PURCHASER
CLAIMING THE ELECTRICITY PURCHASED
IS RENEWABLE MUST BE APPROPRIATE
CERTIFICATION AND TRACKING OF THE
ORIGIN OF ELECTRICITY, AS WELL AS THE
CANCELLATION OF INSTRUMENTS AT THE
TIME OF CONSUMPTION.
ELECTRICITY TRACKING INSTRUMENTS
(ETIS)
COMPANIES CAN CLAIM THE ENVIRONMENTAL
BENEFITS OF RENEWABLE ENERGY BY
ACQUIRING ELECTRICITY TRACKING
INSTRUMENTS, ISSUED BY A GRIDCONNECTED RENEWABLE POWER
PRODUCER. INSTRUMENTS LIKE RENEWABLE
ENERGY CREDITS KNOWN AS RECS
(US), GUARANTEES OF ORIGIN (EUROPE)
AND I-RECS (OTHER REGIONS) CAN BE
PURCHASED SEPARATELY FROM ELECTRIC
POWER, TO MATCH THEIR ELECTRICITY
CONSUMPTION FROM NON-RENEWABLE
SOURCES. EACH MWH OF POWER CONSUMED
HAS TO BE MATCHED WITH THE PURCHASE
AND CANCELLATION OF AN INSTRUMENT
TRACKING ONE MWH OF RENEWABLE
ELECTRICITY, ISSUED BY A PRODUCER
CONNECTED TO THE SAME GRID. THIS OPTION
IS AVAILABLE ONLY IN COUNTRIES WITH
APPROPRIATE TRACKING SYSTEMS IN PLACE.
RE100 INSIGHT briefing | JANUARY 2015
awareness of corporate demand for renewable power. The initiative is gaining traction in the US and
provides additional evidence of the desire big businesses have to increase their use of renewable
power. RE100 will continue to track and collaborate with such aligned initiatives.
In Europe, credible renewable electricity tariffs with independent verification are becoming popular
with businesses that dont have the time or resources to undertake their own feasibility studies, but
want to make a simple switch. Renewable power utilities are also springing up to respond to increased
demand from businesses keen to secure a quick and easy route to going 100%. Even mainstream
renewable energy tariffs arent always the cheapest option, but many are becoming competitive. Plus,
the additional brand and reputational value generated through employees and customers that choose
these options is often worth the additional cost. Philips, J Safra Sarasin and Swiss Re have all used this
approach to support the delivery of their 100% commitment. Providers, such as E.ON, see the long-term
benefits of focusing on low carbon power generation.9
Swiss Re
Swiss Re introduced a carbon emissions reduction plan as part of its Greenhouse Neutral
Programme in 2003. As three quarters of Swiss Res energy consumption comes from power
use, switching to renewable power was a big part of the program, alongside implementing
energy efficiency measures. Swiss Re has developed minimum standards for renewable
power sourcing, which in Switzerland means purchasing naturemade star graded electricity,
while in Germany, renewable power is purchased from energy company NaturEnergie.
VERIFIED ELECTRICITY TRACKING INSTRUMENTS
The use of electricity tracking instruments (ETIs) is critical for many in the journey to going 100%
renewable, but problems arise because there are so many different rules in different countries, and
in some cases, different rules within countries. In other cases, there are no clear rules at all.
ETIs offer a useful option for companies who rent a lot of their commercial space or have lots of
small offices and facilities where individual on-site generation or complicated PPAs simply dont
make sense. It allows them to essentially offset their electricity.
But while good ETIs come with a guarantee that the renewable energy claims are unique to that
company, some systems fall prey to the same credits being sold multiple times which leads to double
counting. Companies joining the RE100 campaign understand the importance of accessing credible
ETIs, which is an approach used by Commerzbank, KPN and Reed Elsevier. Further guidance on this
will be developed by RE100 in collaboration with experts and other organizations that recognize the
importance of establishing credible systems which enable companies to choose this option, knowing
their contribution to renewable power use is genuine. Some types of ETIs have a limited and verifiable
positive impact, so RE100 is committed to advocating and helping companies adopt renewable
options that have the largest impact on emissions reductions.
KPN
KPN has made a commitment to have net zero CO2 emissions by 2020, which is supported by its
aim to use 100% renewable power. The company has purchased renewable electricity in Holland
since 2011, and 2% of the gas it consumes is biogas.
KPN also believes in coupling renewable energy purchases with energy efficiency measures and
smart ICT to reduce overall energy consumption. Any emissions from non-renewable sources
are offset in the Netherlands using Gold Standard Climate compensation.
http://www.bloomberg.com/news/print/2014-12-01/eon-split-to-fortify-german-green-energy-transformation.html
RE100 INSIGHT briefing | JANUARY 2015
INVESTMENT IN RENEWABLE TECHNOLOGIES BY NON-POWER COMPANIES
The total investment in renewable power technologies from companies included in the data analysis
for this report amounted to US$9.8 billion. It is recognized that this is a small proportion of actual
investment being made by businesses. However, data collection will be improved in the future because
increased transparency in reporting is a key aim of RE100, with the CDP disclosure cycle as the primary
tool we will use.
Figure 5. The average investments in different technologies based on data reported to CDP.
70
60
50
40
30
20
10
0
Biomass power
or CHP
Multiple types
of technology
Wind
Solar PV
Hydro
Average investment per company (million US$)
Note: This chart is based on a total of 408 on-site and off-site renewable power investments reported to CDP in
2013 and 2014 data sets where companies provided financial information.
RE100 INSIGHT briefing | JANUARY 2015
SOLAR SHINES THROUGH
Power generation using photovoltaic panels (solar PV) is growing from strength to strength. BT, H&M,
IKEA and YOOX Group all use solar PV as part of their 100% renewable strategy. Based on the data
reviewed for this Briefing, it was found to be the most popular renewable power technology used
across all sectors. And as costs of this technology continue to come down, the financial case for solar
PV makes perfect sense. This is particularly the case where companies are building new facilities in
areas with access to land or roof space and reliable sunshine.
Many companies are putting panels in places where it is immediately visible to colleagues, customers
and other stakeholders to showcase their commitment to renewable power. But solar PV is not just a
vanity option. The Solar Energy Industries Association10 reports that companies in the US are adopting
solar at unprecedented rates with over 1,000 MW of solar PV installations added between 2012 and
2013. As of mid-2013, cumulative commercial deployment totaled 3,380 MW at over 32,800 facilities
throughout the country an increase of over 40% compared with 2012.
BIOMASS IS QUIETLY DELIVERING MAJOR CARBON CUTS
Although solar is the most popular choice of renewable power technology due to the relatively low
installation costs and ease of application, biomass is playing an important role in supporting energy
intensive sectors that need large amounts of power and heat, because it boasts strong financial
returns [see Figure 6] as well as carbon emission reductions.
Figure 6: Average annual CO2e savings for different renewable power investments
Note: This chart is based on information from
393 companies that provided financial and
carbon saving information on their renewable
power investments to CDP in 2013 and 2014.
25
50
75
Installation: Biomass power or CHP
Installation: Hydro
Purchase: PPA
Installation: Wind
Purchase: ETI
Installation: Solar PV
Installation: Multiple
Installation: Solar thermal
Solar Energy Industries Association, Solar Means Business 2013: Top U.S. Commercial Solar Users
10
100
10
RE100 INSIGHT briefing | JANUARY 2015
Waste from food or paper and pulp processing can be used as a biomass fuel for generating power
and heat both of which are critical for many industrial processes. These win-win opportunities
make perfect sense from a holistic resource efficiency perspective, by helping to reduce both waste
management and energy bills.
MARS
Mars has a wide range of renewable energy installations across its facilities globally. Food
waste is used to generate power and heat in its Wrigley factories in Shanghai and Guangzhou,
China; Pozna, Poland; Porici, Czech Republic; and Biesheim, France. These factories treat
wastewater anaerobically, which produces biogas. The biogas is then used to fuel boilers
and heat water. This approach prevents methane from being released into the atmosphere,
in addition to reducing consumption of fossil-fuel derived natural gas by approximately 3%
annually at these sites.
LARGE SCALE WIND
Based on the data set we looked at for this report, direct investments in more traditional large-scale
generation technologies like hydro and wind projects are still dominated by the utility sector. However,
two companies bucking this trend are IKEA and Mars. Both have made the bold commitment to be 100%
renewable and this means looking at technology options that make economic sense for providing large
amounts of power.
IKEAs most recent announcement was a 165 MW wind farm installation in Texas, the companys single
largest global investment in renewable energy. Mars also unveiled its Mesquite Creek 118 turbine wind
farm, with a 200 MW output. This investment provides 100% of Mars US electricity needs, helping boost
its global journey to 100% renewables.
It is likely that as more companies make the 100% renewable power commitment, wind projects will
become attractive options for those looking for solid investments that make long-term sense.
DIFFERENT REGIONS STRENGTHS
Many major companies committing to go 100% renewable know there will be some early wins in
countries where on-site or off-site renewable power projects, PPAs and ETIs all make good business
sense, and demonstrate a credible and authentic option. But many are also operating in regions like
Asia, where the opportunities are less immediately obvious.
In India, although there was a limited number of investments available for review, of the companies
that did report to CDP, most are investing in solar PV and solar thermal projects, and gaining better
financial and carbon returns on those investments than other renewables.
11
RE100 INSIGHT briefing | JANUARY 2015
INFOSYS
In 2014 the solar PV installations on Infosys campuses in India produced 1,101 MWh of electricity,
and in total, 30% of Infosys power came from renewable sources. The company plans to
increase the solar PV installations on its campuses from 2 MW to 50 MW over the next two
years. Increasing renewable power makes sense for Infosys due to conducive solar policies and
increasing electricity and diesel costs. Infosys hopes to be carbon neutral by 2018, by reducing
electricity consumption by 50% and sourcing the remaining energy from renewable sources.
As the worlds largest energy consumer, China is increasingly making renewable energy a top strategic
development priority. According to REN21s Global Status Report11, China led the rest of the world in
renewable energy investment in 2013, spending a total of US$56.3 billion on wind, solar and other
renewable projects. Chinas push for renewables is supported by a host of policies and regulations
aimed at encouraging energy efficiency and expanding domestic renewable energy deployment.
To date, the majority of Chinas renewable energy projects have been erected on a utility-scale basis.
However, in January 2014 a new distributed solar PV subsidy took effect, which paves the way for
corporations to invest in smaller on-site renewable energy projects.
The subsidy encourages self-consumption, because payment for electricity sold to the grid is often 2-3
times lower than the cost of buying electricity from the grid. As such, the ideal adopter of PV in China
is a commercial or industrial enterprise that can consume the majority of electricity generated at
source.
Figure 7. Numerous corporate solar PV projects are already starting to be realized in China.
20 MW PV project
announced April, 2014
13 MW PV project
announced October, 2013
10 MW PV project
announced July, 2014
14.62 MW PV project
announced November, 2014
50 MW PV project
announced December, 2013
4 MW PV project
announced October, 2014
50 MW PV project
announced September, 2014
REN21, Renewables 2014 Global Status Report
11
35 MW PV project
announced May, 2014
12
RE100 INSIGHT briefing | JANUARY 2015
Given the excellent solar resources in China, on top of subsidies and tax incentives, solar PV can provide
attractive returns on investment. Although awareness of the opportunities is currently relatively
low, increased visibility of projects through initiatives like RE100 will help demonstrate what can be
achieved to help scale the growth of corporate demand for renewable power.
THE POWER OF FINANCIAL RETURNS
One of the biggest challenges for many companies looking to go 100% renewable is the lack of data
about the financial returns associated with the various renewable options.
All of the companies currently in the RE100 campaign have made a significant investment of their
time and resources in identifying the best options. But they also recognize that to get to the scale of
renewable power needed to reduce emissions globally, many more companies need to follow the path
to 100%.
Part of the role of RE100 is to raise awareness about the options and the associated financial benefits
companies can expect to achieve, in order to attract more businesses to switch to renewable power.
Based on the data reviewed as background to this report, the global average IRR for renewable power
investments ranged from 0-18%. Figure 8 indicates how this breaks down across technologies.
Figure 8: Average internal rate of return (IRR) on renewable power investments
18
14
% IRR
5
Note: This chart is based on a total of 339 on-site
and off-site renewable power investments reported
to CDP 2013 and 2014, where companies provided
financial information and stated an expected
lifetime of the project. It should also be noted that
the information provided for hydro is based on
information from one investment.
0
Biomass power
or CHP
Multiple types
of technology
Hydro
Solar PV
Wind
13
RE100 INSIGHT briefing | JANUARY 2015
There are also significant ranges in the financial returns across technology types applied in different
industry sectors. And there are certainly challenges caused by the lack of information being disclosed
about investment in renewable power projects by companies outside of the power sector. But as part
of RE100, the intent is to increase transparency in this area and build a clearer picture of the growth in
demand from major corporations to decarbonize their power supplies.
NEXT STEPS TO 100% RENEWABLE
This RE100 Briefing Report provides an initial snapshot of the appetite major businesses have to drive
demand for renewable power.
Over the next five years, The Climate Group and CDP, with the support and collaboration from many
others, aim to increase awareness of the business case for renewable power and encourage others to
commit to the journey our target is that by 2020, 100 of the worlds most influential businesses join
RE100 and commit to 100% renewable power.
To find out more contact info@theRE100.org or visit theRE100.org.
Follow the conversation on Twitter by using: #RE100
Partners are also invited to join RE100 on LinkedIn for discussion in an exclusive group.
ACKNOWLEDGEMENTS
Powered by
CDP data analysis provided by Point380
China analysis provided by Azure
International
Author: Emily Farnworth
Editor: Clare Saxon
Designer: Jo Violaris
14
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RE100 INSIGHT briefing | JANUARY 2015
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international non-profit. Our goal is a prosperous,
low carbon future. We believe this will be achieved
through a clean revolution: the rapid scale-up of
low carbon energy and technology.
We work with corporate and government partners
to develop climate finance mechanisms, business
models which promote innovation, and supportive
policy frameworks. We convene leaders, share hard
evidence of successful low carbon growth, and
pilot practical solutions which can be replicated
worldwide.
@Climategroup
CDP is an international NGO that provides the only
global system through which more than 5,000
companies and 207 cities report, manage and share
vital environmental information. These insights
enable investors, companies and governments to
mitigate risks from the use of natural resources
and identify opportunities from taking a responsible
approach to the environment. Please visit www.
cdp.net.
@CDP
AN ACTION OF:
SUPPORTED BY:
We Mean Business is a coalition of organizations
working with thousands of the worlds most
influential businesses and investors. These
businesses recognize that the transition to a
low carbon economy is the only way to secure
sustainable economic growth and prosperity for
all. To accelerate this transition, we have formed
a common platform to amplify the business voice,
catalyze bold climate action by all, and promote
smart policy frameworks.
@WMBTweets
The International Renewable Energy Agency (IRENA)
is an intergovernmental organisation that supports
countries in their transition to a sustainable energy
future, and serves as the principal platform for
international cooperation, a centre of excellence,
and a repository of policy, technology, resource and
financial knowledge on renewable energy. IRENA
promotes the widespread adoption and sustainable
use of all forms of renewable energy, including
bioenergy, geothermal, hydropower, ocean, solar
and wind energy in the pursuit of sustainable
development, energy access, energy security and
low-carbon economic growth and prosperity.
@IRENA
