Why 100% renewable promises are an impossible dream without ‘going local’
Are you committed to 100 percent renewable power? If not, it probably won’t be long before you’re in the minority. Companies and countries are making some big commitments – but the bigger question is how are they going to follow up on their promises? Is going local the answer?
Many of us want the world to run on 100 percent renewable energy — and day-by-day more and more companies, cities, states and countries are committing to doing just that.
But, right now, we cannot feed that demand. So, right now, this is an impossible dream.
The RE100, a global campaign to get major companies to commit to 100 percent renewable electricity targets, now has 161 signatories from 23 different markets (at the time of writing).
According to BloombergNEF research , those companies consumed 189TWh of electricity in 2017. That’s the same as is consumed by Egypt.
Estimates suggest the RE100 alone will need to purchase an additional 190TWh of clean electricity in 2030 to meet their targets.
And that’s just the RE100.
Many other companies are committing to going green, including 515 in the Science-Based Targets initiative.
And in the US alone, more than 90 cities, ten counties and two states have committed to 100 percent goals and 250 mayors have pledged for 100 percent renewables in their towns by 2035.
Currently, corporations buy renewable energy through Power Purchase Agreements (PPA) with either utilities or large privately owned renewable sites such as wind farms or solar fields.
Every site feeds energy to the grid and earns renewable energy certificates, which companies then buy as confirmation of their commitment to green electricity — although they are not directly using that specific energy.
Corporations have directly purchased 32GW of renewable electricity via PPA since 2008 and the momentum is growing. A massive 86 percent of those purchases were made in the last three years, 40 percent in 2018 alone.
And it’s truly global. Last year, companies in 21 countries signed up to PPAs. More than 60% of that was in the U.S, while the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions purchased in record volumes.
Meanwhile, with the imminent passing of a renewable portfolio standard in China, more than 30,000 large commercial and industrial companies will also have to commit to renewable electricity targets.
Even oil companies are getting in on it, with ExxonMobil becoming the first to sign a clean energy PPA for its own operations last year, purchasing 575MW of solar and wind in Texas.
This is a fundamental step change — because it now positions companies alongside utilities as the biggest buyers of clean energy globally.
THE IMPOSSIBLE DREAM
Right now, however, there is not enough supply to meet current demand, let alone future demands.
We can try to build for it, of course. But boy would we need to build.
Even to meet the requirements of the RE100 alone by using solar farms and wind plants would require over 100GW of new installations — that’s more than the whole of the UK’s renewable power generation in 2017.
Some of the world’s biggest companies have taken it into their own hands to try to solve the problem, joining the Renewable Energy Buyers Alliance (REBA) to grow supply and connect sellers with buyers.
The group has more than 200 buyers and 150 clean energy providers and developers. Its board includes energy experts from Google, Facebook, Walmart, General Motors, Johnson & Johnson, First Solar and Salesforce.
Its aim is to help new buyers through the minefield of buying PPAs and work with developers to bring more than 60GW of new capacity online by 2025 — almost the same as the total US solar capacity in 2018.
To put that in perspective, that’s around 187 million 320W PV panels or 25,800 utility-scale wind turbines.
That’s all good. It’s very positive progress. But it’s not enough. Not by a long shot. We’re talking Terrawatts of demand here, not Gigwaatts.
So, we need another solution — and, fortunately, it’s staring us right in the face.
It’s right there every time we walk down the street: every time we see the sun glint off a rooftop solar panel; every time we hear the swoosh of a mini turbine blade; and every time an EV whirrs past.
Yes, there are rapidly increasing numbers of distributed renewable resources — rooftop solar, batteries, EVs — being installed and used by private individual ‘prosumers’ around our cities.
Each one provides independent generation or storage on a small scale, but when put together, the excess electricity not used at source could provide a mammoth additional resource.
Not only that, but there is also a massive growth of smart devices and appliances, which when connected can help prosumers improve their energy efficiency, leaving more available to be supplied to others.
There are, however, restrictions — both technological and regulatory –holding us back from using that resource to its fullest.
Firstly, the only way for companies committing to 100 percent renewables to get their green energy — aside from installing their own renewables (which many do) — is through buying PPAs.
But only installations that generate high enough volumes of electricity (e.g. more than 250KW in the UK) can sell PPAs directly to companies. Smaller generators must sell to the utilities, which then control the sale of PPAs.
Also, only companies that use large amounts of electricity can buy PPAs — although smaller companies, including 34 in the US last year, are beginning to use ‘anchor tenants’ to aggregate demand and purchase PPAs together.
So, there is currently no regulated way for an independent prosumer to sell energy to someone else.
And there is no regulated way for the companies committed to 100 percent renewables to buy directly from the distributed resources around them.
But there IS a way. We can make this impossible dream a reality.
The answer is transactive energy.
Large-scale renewables resources will still play their part — and that is one area existing utilities can still have a piece of the market — but this is the rise of the ‘prosumer’ and private generation is going to take over.
Connecting local resources together in community microgrids using blockchain technology makes it possible for everyone to transact energy within a local energy marketplace — cutting out the middleman.
Clearly, we are at the cusp of global energy disruption. And at LO3, we are building the platform and tools that are going to accelerate the transition.
These local energy marketplaces can include prosumers, private consumers and any local or global businesses based in the area.
So, rather than buying a PPA from a far-away resource that ticks the box of 100 percent renewables, businesses big or small will be able to literally buy direct from the nearest renewable power supply.
And by making it possible on a micro scale, it will allow smaller generators, right down to owners of individual PV panels, to get involved, pool their resources and benefit financially without the need for a middleman.
Transactive energy is likely the only way to get to the penetrations of renewables that could meet the Paris Agreement targets.
It will allow companies to meet their targets by buying (and/or selling) locally generated energy and ancillary services from the communities around them.
So, with transactive energy, we CAN do ‘100 percent renewable.
But in the future, that just isn’t going to cut it any more. It’s ‘100 percent LOCAL renewable’ that we will all be striving for.