Businesses bought a record 13.4 GW of energy produced from renewables sources last year, bringing the total since 2008 to more than 32 GW, an industry report from Bloomberg New Energy Finance has revealed.
The achievement is certainly impressive: according to the report, titled 1H 2019 Corporate Energy Market Outlook, some 121 companies operating in 21 countries contributed to the increase, which was more than twofold on 2017, when companies bought 6.1 GW of energy produced from renewable sources.
Companies in the United States accounted for over 60 percent of the total power purchase agreements for renewable energy in 2018 and tech giants such as Facebook and AT&T spearheaded the buying spree.
Facebook alone bought 2.6 GW of the total 8.5 GW of renewable energy U.S. corporations purchased last year. That was a triple increase in 2017, as more and more businesses—not just in the technology sector—pivot to a more environmentally responsible energy consumption models. Yet, there is a more prosaic reason the tech sector is in the lead as well: it is simply one of the largest energy consumers with huge data centers requiring a constant flow of electricity, and a lot of it. Diversifying the sources of this electricity makes a lot more sense to large consumers.
Europe also broke its own record, at least in wind power: last year European companies signed power purchase agreements for a total 1.5 GW, up from 1.3 GW a year earlier, out of a total 2.3 GW in PPAs, according to BNEF data. The pharmaceutical and automotive sectors joined the renewable energy buying pack for the first time last year. Also for the first time, PPAs for wind power were signed in Germany, Poland, and Spain. Related: The Chatroom Cartel Running Global Bond Markets
Last year also saw another first: in November, Exxon inked a 12-year deal with Danish renewable energy company Orsted to buy 500 MW of electricity produced by solar and wind farms to power its oil production in the Permian. Although the terms of the contract remained undisclosed, it is the largest such contract featuring an oil company as a party.
“We frequently evaluate opportunities to diversify our power supply and ensure competitive costs,” Exxon spokeswoman Julie King told Bloomberg in a statement. The company has been the target of a lot of criticism—and lawsuits—regarding its attitude to climate change and renewable energy use. Yet now that solar and wind power is becoming cheaper and demand for the commodity in the Permian is soaring, the time is apparently right for Exxon to start changing.
It will more likely than not be followed by other U.S. energy companies as well as they catch up with their European peers who are investing a lot more heavily in renewable power. A recent study from CDP, a climate research provider, found that European supermajors such as Shell, Total, and BP accounted for 70 percent of the total renewable energy capacity in the industry. Their U.S. peers are far behind because of less pressure from regulators. However, pressure from shareholders is increasing and things are changing slowly but surely.
Last year, the world’s 24 public oil and gas companies spent just 1.3 percent of their combined budgets of US$260 billion on less carbon-intensive energy, Reuters reported in November. With pressure from shareholders growing and the cost of renewable energy falling, even if the total investments don’t grow much soon, chances are oil majors will stat using more renewable energy, if nothing else, to mend their oil-stained reputation in the public eye.
By Irina Slav for Oilprice.com