Author: Jenna Bieller assists Renewable Choice in providing market-based insights and analysis, as well as sustainability communications.
2015 was a hallmark year for renewables in North America. U.S. corporate buyers surpassed all previous records of green power purchasing, and renewable energy goals became more ambitious than ever. Corporations are looking to extend this momentum across U.S. borders. 2016 is proving to be the year for global clean energy procurement.
Of power purchase agreements (PPAs) signed this year, some of the most notable deals have occurred outside of North America. Google, Facebook, and Nestle are among the first corporations to venture into international renewable energy markets to provide clean power for facilities abroad. While there is uncertainty around how regulations in international markets will shake out, one thing is for sure — these examples represent only the tip of the proverbial iceberg for globalized renewable energy efforts. These visionary companies are ahead of a trend that is certain to continue.
Why are companies expanding into new markets now? In the past, multinational corporations applied clean energy purchased in their HQ country to global operations. Due to a simultaneous convergence of factors — including updated emissions reporting guidance, the emergence of trustworthy instruments to reduce emissions in new geographic regions, and rising participation in global sustainable business initiatives like the RE100 — companies are becoming more creative with their renewable energy efforts.
Check out this SlideShare for an overview of opportunities in key emerging markets
The Greenhouse Gas Protocol’s Scope 2 reporting guidelines, a widely accepted standard for tracking emissions from purchased electricity, are subject to important changes this year forward. Updates require corporations to shift clean energy procurement strategies geographically closer to the region where their energy consumption actually occurs. This ensures that contractual instruments , such as PPAs and Energy Attribute Certificates (EACs), will contribute to the amount of clean energy on local grids. Multinational operations that wish to maintain or advance their global clean energy goals must invest in products that match the location of their electricity burden in order to comply with the updated guidance.
Fortuitously, as companies are being pushed to produce more tangible climate impacts with their sustainability efforts, new instruments to do so are simultaneously becoming available. Driven in part by corporate demand, certification programs such as the I-REC Standard, Green-e(R), the Gold Standard, Goldpower(R), and TIGRs have emerged as new solutions for international renewable energy transactions. The rapid expansion of trustworthy renewable energy instruments into international markets is exciting because it offers corporations the opportunity to demonstrate sustainability stories in local terms. The movement to develop new clean energy solutions is also a positive indicator for clean energy development abroad.
Of these emerging options, India and Mexico are forming green power markets that are particularly promising for corporate buyers. While still in nascent stages of development, these markets introduce unique benefits for companies that choose to participate. Shifting policies in both countries introduce the element of choice in electricity purchasing, which positions renewable PPAs as an economically advantageous alternative for the first time.
Pressure to Perform
Pressures from peers, NGOs, and business groups making ever more ambitious commitments to sustainability are compelling corporations to take climate action to the next level. Initiatives to advance renewable energy are increasingly adopting a global lens. The RE100, for example, is a coalition of private sector players with a shared mission to accelerate the transformation of the global energy market and aid the transition to a low carbon economy. Companies committing to using 100% renewable energy across all operations must look outside the U.S. to reach this target.
Corporates that enter the international space first will assert themselves as innovators. In exchange for the inherent risk they take on as early adopters, they enjoy the benefit of knowing the part they play in developing new international markets. In many of these markets, including India and Mexico, it behooves companies to get in sooner rather than later in order to reap the most attractive benefits an international PPA offers, including flexible terms and predictable electricity cost.
Renewable Choice is currently one of the only North American green power providers with a track record of successful corporate renewable energy deals across a diverse range of international markets. Contact us today to learn how we can help your company become a global sustainability leader.
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