The research, conducted in August, shows that while the continually improving economics of utility-scale wind and solar are helping convert corporate commitments into a decision to buy, companies are determining their own definition of value in the procurement process. The cheapest option is not necessarily the best strategic fit.
“This market is rapidly maturing and expanding, providing corporate and industrial purchasers with an immense number of options in terms of offtake, additionality, and financial participation in renewable energy projects,” said Steve Vavrik, chief commercial officer of Apex Clean Energy.
More than 150 respondents from companies with annual revenues of greater than $250 million participated in the 2017 State of Renewable Energy Procurement survey. In addition, 12 in-depth, one-on-one interviews were conducted with executives from companies helping lead the maturation of the direct renewable energy procurement market.
“Improving prices are bringing more purchasers to the table to achieve their sustainability goals,” continued Vavrik. “But the research proves that the market sees sustainability in terms of decarbonization and industry leadership, not just a renewable version of the business-as-usual commodity deal that maximizes market timing. The next steps are enhanced market education to reflect the fast-evolving options now available, and broader coordination to further expand purchasing opportunities through state and federal procurement policies.”
Among the key findings from the Apex/GreenBiz study were:
- The primary drivers of corporate renewable energy goals are addressing emissions targets (70% of respondents) and demonstrating corporate leadership (65%).
- While 65% of respondents cited price as a factor considered when purchasing renewable energy, more than a quarter of respondents also chose value, energy intensity of facilities, length of contract, and credit toward goals. The reputation of the renewable energy developer was also cited by 23%.
- Despite the federal action to withdraw from the Paris climate accord, 84% of all respondents plan to actively pursue or consider directly buying clean energy, and 43% plan to become more aggressive in the next 24 months.
- The in-depth interviews of market leaders highlighted a clear trend toward moving beyond purchasing renewable energy credits (RECs) as a strategy due to the lack of additionality. This was driven by skepticism that REC purchases alone were driving new renewable energy capacity and creating real-world greenhouse gas reductions.
The full 2017 State of Renewable Energy Procurement survey along with a full perspective from Steve Vavrik on the research findings can be found here.