Why small-time thinking is next big thing for corporate green power

With RE100 Sam Kimmins has helped sign up many of the world’s biggest companies to the goal of using 100% renewable power in their operations, but now he's unashamedly thinking small-time – meaning in hours rather than years.

What started as a handful of corporates now exceeds 400 of the most recognisable names in global business; think Google, Nike, Sony, Samsung, Unilever, Heineken, HSBC and Intel and you start to get a flavour of its scope. That has brought the programme a surprising measure of heft when it comes to dealing with policymakers, said Kimmins, director of energy at the Climate Group, which started RE100 along with partner CDP.

“What's changed since we launched is the recognition that this is about the influence that members have to drive more general change. To drive policy change to open markets for everybody.

“In achieving their goal, these companies are spending billions of dollars on power purchase agreements, on direct installation of renewables. And it's helping countries towards not only their climate goals but installing necessary energy infrastructure.”

Kimmins added: “We are equivalent to the eighth-largest country in the world in terms of electricity use. And in terms of the total hours per year, it's beyond the imaginings of what we had [at launch] in 2014. But the level of policy influence that we have, the level of interest from policymakers is also greater than we anticipated.”

Most recently that policy influence has been at work in Asia, which for years was the outlier in a corporate renewable energy market dominated by the US and then Europe. Kimmins cites recent progress in Vietnam, South Korea and Taiwan, among other markets.

RE100 has just spent two years engaging with the biggest beast in the global renewable energy jungle, China. The reward came in May when RE100 announced that China’s Green Electricity Certificates (GEC) scheme was now aligned with international standards after previous concerns in areas such as ‘double counting’ – meaning the environmental benefit of one project was being counted twice – and the lack of an expiry date for certificates.

China is from the perspective of Western-based organisations and companies often seen as tough to deal with and has faced questions over transparency. Was that the case when RE100 approached the Chinese authorities?

In fact, “they actually approached us”, said Kimmins. China’s motivation was a recognition that to attract corporate investment in renewables “they needed to have a transparent system that was recognised by an internationally recognised body like RE100”.

While RE100’s track record of getting big names on board with renewable energy procurement is impressive, Kimmins admits that eventually it can bump up against the limitations of power systems that are still far from perfect.

24/7 and 'windless night in December' are next challenge

The RE100’s goal of 100% renewable is based on a system of annual matching. That tallies over the course of a year the amount of renewable power a business procured via the various mechanisms available and compares it with consumption.

Kimmins said a number of companies in the US and Europe are already meeting their 100% goal on an annual match basis. In practice, however, when looked at on a 24/7 basis, that equates to about 70% renewables penetration. There will be times “like a quiet, windless night in December” when supplies will be coming from fossil sources still on the grid.

“We’re now looking at what’s next,” said Kimmins. The Climate Group is involved in launching a pilot scheme called 24/7 Carbon-Free Coalition (24/7 CFC) aimed at “those companies and countries that have achieved their RE100 goal, or are close to achieving it, and want to take the next step”.

A small group of companies including Google and AstraZeneca is working to help define what round-the-clock accounting for a corporate entity’s energy consumption looks like in terms of gathering data on where, how and – very specifically on an hourly-matched basis – when it was generated. This is seen as a crucial final step to helping develop markets that can account for, for example, the role played by storage.

Kimmins said: “We know that the Greenhouse Gas Protocol [widely used for emissions accounting purposes] is changing. It's likely to go to a more granular level and demonstrating how you're buying electricity on an hourly or even a 15-minute basis.”

'We've recognised that nuclear exists'

It is notable that the 'RE' (Renewable Energy) of the RE100 changes to the 'Carbon-Free' of the new initiative.

That's because unlike the original scheme, 24/7 CFC recognises and allows a role for nuclear power, albeit judging by Kimmins' comments without any great enthusiasm.

The closer to 100% round-the-clock power accounting you get, the harder it currently becomes to meet it with renewables, hence the description of the new initiative as "the next frontier in energy".

"We've recognised... that nuclear exists, that there are nuclear power stations all around the world and they're a recognised carbon-free source of electricity. And we brought that into the 24/7 portfolio."

He added: "Renewables are the absolute priority. We can get close to 100% on renewables alone in most countries. But in some situations, you might need a bit of nuclear to service those dark, still nights.

"And so that's allowed. But our view on nuclear is, if you've got a nuclear power station down the road that exists [such as in France] go ahead and use it. But you've got to bear in mind that nuclear is very, very expensive [and] is usually built... and heavily subsidised by the state.

"And it takes a very, very long time to build. So we joke, if you want your energy expensive and late, then nuclear is an option."

"The reality is, companies are looking at nuclear as a way to fill those gaps [but] they need to be realistic about the role particularly new nuclear can play."

Kimmins said: "Actually, what we need to be doing is filling those gaps now with renewables. You can build a wind farm or a solar farm in gigawatts of capacity in a matter of months and years. We shouldn't be waiting 25 years plus for very expensive nuclear to come online."

'This is an unstoppable movement'

While China and other previous laggards in corporate renewables such as South Korea in Kimmins’ view are making strides, what about the US market that for many years led the corporate renewable energy charge but now looks decidedly shaky in terms of its overall green power policies?

Donald Trump and the RE100 were both born in New York (the latter at NY Climate Week 2014) but it is probably fair to say that’s about all they have in common.

With Trump’s policies putting question marks over the immediate future of US green power Kimmins reckons a longer-term perspective is needed, pointing to the policy shift back to renewables that has occurred in South Korea.

“They [South Korea] just elected a more pro-renewables president. Things go up and down, but overall, globally, things accelerate. While the US steps back, China, Asia are racing ahead.”

Kimmins also claims a mismatch between the language used by the Trump Administration in regard to renewables and that of American business.

“We think this is an unstoppable movement, and the reason why is straight economics. And what we're seeing in the US, for example, is a lot of companies, I think rightly, talking about their renewables purchases in terms of energy security, in terms of reliability, in terms of competitiveness.

“Who doesn't want homegrown energy that is cheap? And so the language is changing in the US. It's becoming far more focused on the business case and the business reality of renewable electricity [so] companies are continuing to act.”