David Ozment, Walmart’s energy czar, insists the world’s largest company is committed to achieving its goal of using 100% renewable energy, but it is frustrated with the lack of choices in the marketplace.
Amy Hargroves, Sprint’s director of corporate responsibility & sustainability, admits the telecom giant has been “surprised” by how hard it is to reach its modest goal of getting 10% of its electricity from renewables by 2017. She listed the lack of financing options and standardized contracts as well as a shortage of utilities and regulators in the renewable space.
“We are a relatively large company,” Hargroves said. “If we can’t do those things, how can we ever make this easier for smaller companies to participate.”
Walmart (WMT) and Sprint (S) are among 12 major American companies that endorsed a series of principles released Friday to increase access to renewable energy. The group, convened by World Wildlife Fund and the World Resources Institute, also includes heavyweights like GM (GM), Facebook (FB), Mars, Procter & Gamble (PG), Johnson & Johnson (JNJ) and Intel (INTC). Together, they hope to cut clean energy costs and push for production so they achieve their target of using 8.4 million megawatt hours of renewable energy per year through 2020.
“It’s really no secret that American companies are buying more renewable energy than ever before,” said Marty Spitzer, WWF’s director of U.S. climate and renewable energy policy. “It seems like we hear about another deal at least once or twice a week lately.
He continued: “These iconic companies, despite their tremendous success buying renewable energy, are having hard trying bringing on enough renewables to meet their own goals. This is holding back the entire market.”
According to a WWF report that came out last month, 43% or 215 of the companies in the Fortune 500 have set climate and/or clean energy targets. Fifty-three of those companies have reported saving $1.1 billion annually through energy efficiency and renewables which equates to taking 15 coal plants off-line.
The problem, according to Spitzer, is that the supply of renewables hasn’t kept up with demand. According to the U.S. Energy Information Administration, renewable sources only accounted for only 10% of energy consumption in 2013 and 13% of electricity generation.
“They are facing two big challenges,” Spitzer said. “Many utilities are not providing the renewable energy products their corporate customers need so the companies are forced to go around utilities to obtain the renewables they want. When they do bypass utilities and go to renewable energy developers or providers, they are often able to purchase the renewable energy they need but the deals are overly complex, take a long time to execute and are not happening at the scale the large buyers want.”
The Corporate Renewable Energy Buyers Principles calls for greater choice in procuring renewable energy, more access to cost competitive options, longer and variable-term contracts, access to new projects that reduce emissions beyond business as usual, streamlined third-party financing and increased purchasing options with utilities.
WWF was careful to say these principles should be treated more like policy recommendations aimed at sparking a conversation on closing the gap between supply and demand of renewables. The companies have no plans to collectively buy power in bulk but their executives and WWF are planning to meet with regulated utilities and their regulators in the coming weeks to solve the problem.
“These Buyers’ Principles lay the groundwork for partnerships to help energy buyers like us go further faster,” said Walmart’s Ozment, whose company, among other things, wants to procure 7 billion kilowatt-hours of renewable energy by the end of 2020. “We know our company’s goal to be supplied by 100% renewable energy is good for business and good for the environment. If we can buy renewable energy for less, we can operate for less — and we can pass on the savings and a cleaner energy future to our customers and their communities.”
WRI’s Letha Tawney said she is hopeful the voluntary principles will inspire utilities powered by polluting fossil fuels like oil and gas to speed up their entry in the renewable markets.
“They could deliver the renewable energy these companies are looking for,” Tawney said, adding that utilities including Duke Energy in North Carolina, NV Energy in Nevada, and Dominion Virginia Power have begun exploring ways to provide renewable power to their largest customers.
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