The Netherlands remains dependant on fossil fuels which still make up about 95 percent of its energy supply, according to a 2016 report from the ministry of economics affairs.
WASHINGTON – Last year nearly 40 percent of US wind contracts were signed by corporate power users, along with university and military customers. That's up from just 5 percent in 2013, according to the American Wind Energy Association trade group.
These users also accounted for an unprecedented 10% of the market for large-scale solar projects in 2016, figures from research firm GTM Research show. Just two years earlier there were none.
The big reason: lower energy bills.
Costs for solar and wind are plunging thanks to technological advances and increased global production of panels and turbines. Coupled with tax breaks and other incentives, big energy users such as GM are finding renewables to be competitive with, and often cheaper than, conventional sources of electricity.
The automaker has struck deals with two Texas wind farms that will soon provide enough energy to power over a dozen GM facilities, including the US. sport utility vehicle assembly plant in Arlington, Texas that produces the Chevrolet Tahoe, Cadillac Escalade and GMC Yukon.
The company is already saving $5 million a year worldwide, according to Rob Threlkeld, GM's global manager of renewable energy, and has committed to obtaining 100% of its power from clean sources by 2050.
"It's been primarily all driven off economics," Threlkeld said. "Wind and solar costs are coming down so fast that it made it feasible.'' (For a graphic showing the corporate green-energy rush, see: http://tmsnrt.rs/2spS81j )
Growing corporate demand for green energy comes as US. President Donald Trump is championing fossil fuels and targeting environmental regulations as job killers. This month he announced the United States will withdraw from the landmark Paris Agreement to fight climate change, a move that was condemned by several prominent US. executives, including General Electric Co Chief Executive Jeff Immelt.
Trump’s administration, however, has made no moves to target federal tax incentives for renewable energy projects, thanks mainly to bipartisan support in Congress. Many Republican lawmakers hail from states that are major solar or wind energy producers, among them Texas, Oklahoma and Iowa.
US. companies, meanwhile, are pursuing their own clean-energy agendas independent of Washington politics. Over the past four years, corporations have contracted for about 7 gigawatts of renewable energy – enough to power more than 1 million homes. That number is expected to rise to 60 GW by 2025, according to the Edison Foundation Institute for Electric Innovation, a utility-backed non-profit based in Washington DC.
Growth in renewables for years was driven by utilities laboring to meet tough state mandates to reduce carbon emissions, particularly in places such as California. Early corporate adopters included Alphabet Inc and Amazon.com Inc, leading-edge companies with progressive company cultures, deep pockets and major power needs.
Now mainstream industries are stepping in as costs have plummeted. Wind-power costs have dropped 66% since 2009, according to the American Wind Energy Association, while the cost to install solar has declined 70% since 2010, according to the Solar Energy Industries Association trade group.
This year alone, home improvement retailer Home Depot Inc , wireless provider T-Mobile US Inc, banker Goldman Sachs and food producer General Mills announced major purchases of renewable energy.
Power to the PPA
Such deals can take many forms, but most are so-called power purchase agreements. Known as PPAs, these are roughly 10-to-20-year contracts in which the owner of a large solar or wind project sells electricity to large customers, often at rates lower than those charged by utilities. These agreements allow energy users to buy renewables at attractive prices with no upfront investment.
These agreements also help companies avoid outages if the sun doesn't shine or the wind doesn't blow. The massive wind farms and solar plants that support these contracts often supply electricity straight to the grid rather than feed it directly to corporate customers' plants and offices. Companies get the benefit of clean energy without cutting themselves off from the security of the grid.
The arrangement also saves companies from having to do it all themselves. Mark Vanderhelm, vice president of energy for Wal-Mart, said the retailer is about half way to its goal of sourcing 50% of its power from renewable sources by 2025. While the chain has installed solar panels atop hundreds of stores, it has purchased much of its green energy via two PPAs. "For us to meet our goals, we wouldn't be able to get there by doing it all on site. We just fundamentally don't have enough roof space," Vanderhelm said.
He said Wal-Mart is seeing roughly single-digit percentage savings with its green-power contracts.
Furniture retailer IKEA is a notable exception to the PPA trend, preferring to own the renewable-energy assets that serve its US. business, including rooftop solar systems on most of its buildings and two wind farms in Texas and Illinois. The approach is part of the Swedish company's long-term corporate strategy of owning all of its stores, factories and the land on which they're built.
Demand from big corporations has benefited a host of wind and solar developers including Pattern Energy, First Solar and NextEra Energy. BNB Renewable Energy Holdings LLC, a privately held New York-based developer, said corporations now make up about half its business.
"There is a convergence right now where price is low and their sustainability commitments are high," said Jos Nicholas, a managing partner with BNB.
The developers or owners of the projects, meanwhile, get the stability of long-term contracts plus those federal tax breaks. The solar credit is worth up to 30 percent of a project's value. For wind, the most popular tax credit is a maximum of 2.4 cents per kilowatt-hour of electricity produced for a decade.
Since 2014, nearly 100 large global companies have committed to transitioning to 100% renewables through a partnership with The Climate Group, a nonprofit that's working to reduce greenhouse gas emissions. Roughly two corporations a month are joining that effort, according to Amy Davidsen, the organization's executive director for North America.
In addition to GM, US. companies that have made the commitment include Johnson & Johnson, Procter & Gamble Co and Nike Inc.
Still, many big firms remain on the sidelines because they lack an overall corporate sustainability mandate, view renewables as having unattractive returns or because the contracts are too long, according to a 2016 PricewaterhouseCoopers survey.
Many small- and medium-sized businesses have a hard time benefiting too. They don't consume enough energy to negotiate large, lowest-cost PPAs like the big guys. Smaller projects, such as installing rooftop solar panels, tend to depend heavily on state and local incentives that come and go.
The 2020 expiration of the federal tax incentives is another concern. But industry watchers expect US. companies will continue their ambitious public commitments to boost renewable energy use even if those breaks aren't renewed.
General Mills, for instance, sees climate change as a major threat to the agricultural supply chain behind products such as Cheerios cereal and Yoplait yogurt. The company has a goal of reducing its greenhouse gas emissions by 28 percent by 2025.
"If the front end of that business model breaks down -- Mother Nature -- we're in a world of hurt," Lynch said.