The goal of powering a company, city, state, or nation with 50% to 100% renewable electricity would have seemed preposterous (and nearly impossible) not long ago. As we outline in our most recent Clean Edge benchmarking report, Getting to 100, a growing number of companies and governments are reaching such targets, or aiming to achieve such goals - and nobody is laughing. This dramatic shift is both technically and economically feasible, and will have perhaps the greatest impact on the global economy and environment as any other energy trend unfolding today.
But it will take political will, and aggressive policies resulting from it - so it's heartening to read the headlines from recent months. In 2015 alone, California established a 50% by 2030 renewable portfolio standard (RPS); Vermont a 75% RPS by 2032; and Hawaii a 100% RPS by 2045. And just last week, New York Governor Andrew Cuomo announced his plan to ask state regulators to mandate a 50% RPS by 2030 in the Empire State (generally reflecting what the governor had outlined earlier in the year as part of the state's REV utility reform initiative).
Outside the U.S., jurisdictions that are already 100% powered by renewable electricity include the nation of Iceland, several small islands, and the states of Carinthia in Austria and Schleswig-Holstein in Germany (the latter with a population of 2.8 million). According to the 2015 Global Status Report from research organization REN21, renewables now outpace coal and natural gas combined for new generation capacity additions around the world. Renewables represented 59% of net additions to global power capacity in 2014, with wind, solar PV, and hydropower dominating the market. Globally, renewables comprised 27.7% of the world's power generating capacity last year, equaling 22.8% of total global electricity generation.
And it's not just governments. Dozens of major corporations are now procuring 100% of their electrons from renewables for their U.S. operations, including Apple, Intel, Kohl's and Voya Financial. Many more are aiming to green their electricity purchases across the globe, committing to getting to 100% within the coming years, including Walmart, Goldman Sachs, Starbucks, and Nike.
A host of non-governmental organizations have stepped in with initiatives to help these companies reach these goals, including Rocky Mountain Institute's Business Renewables Center; the Corporate Renewable Energy Buyers' Principles, founded by World Wildlife Fund and World Resources Institute; and RE100, led by The Climate Group and the Carbon Disclosure Project. The global business community is starting to get the message: 100% RE is not just the right thing to do, but it's becoming the profitable thing to do as well.
What's enabling this dramatic shift? A unique confluence of forces, including:
• Distributed solar is becoming increasingly cost-effective across geographies
• Utility-scale renewables have grown into a mature industry
• Energy storage, with declining costs, is poised to complete the intermittency puzzle
• Net zero buildings and smart connected devices are driving an efficiency renaissance
• An emboldened, resilient power grid is taking shape, enabling the two-way flow of electrons
Reaching such high penetrations of renewables requires tapping the full portfolio of clean-energy options, including renewable electricity deployment paired with energy efficiency, demand-side management, and energy storage. On the generation side of the equation, it includes a range of financing and systems integration solutions spanning onsite generation, utility-scale renewables, renewable energy credits (RECs), green energy tariffs, and more.
Our research identified four key steps that make up the 100% Renewables Toolkit for any organization or entity looking to transition to mass renewable electricity. The main decision-making processes include the following steps: 1) Assess baseline electricity usage, 2) Pursue energy efficiency measures, 3) Deploy clean energy, and 4) Balance, where needed, with energy storage.
But not all pathways are created equal, requiring market players to assess and choose options based on individual needs and requirements. Or¬ganizations that want to procure electrons generated close to their energy consump¬tion, for example, would not likely be as interested in RECs, which typically pay for the environmental attributes of clean energy generated at locations hundreds or thousands of miles away. And an organization looking to acquire renewables with little or no upfront cost would be more interested in a power purchase agreement, loan, or lease arrangement than buying a system or systems outright.
So what will the future look like? A decade and a half into the 21st century, the mission to reach 50% to 100% renewable electricity is an increasingly realistic goal (and in some cases, already a reality). Some, like Stanford University professor Mark Jacobson, have made the case that most nations can reach 100% renewable electricity by 2050. The energy plans and future scenarios (per Jacobson's team's research) for 139 countries can be found in this nifty interactive tool.
We can debate the exact timelines, but one thing is clear: there is no turning back. The disruption of the traditional electricity system as we know it is unfolding steadily - and will result in cleaner, more resilient electric power systems that are aligned with both economics and the environment across the globe. It represents the greatest shift in our energy systems since the invention of the light bulb (and the electricity grid as we know it) by Thomas Edison and others more than a century ago.
With climate and other environmental and equity issues looming large, and as nations meet in Paris to discuss how to address these challenges on a global scale, this new reality can't come soon enough. It will require political and business will, along with financial innovation and the unleashing of capital, but we have the technologies to achieve this massive shift. It will be a marathon, not a sprint, but the pace shows no signs of slowing down.
Clean Edge's Getting to 100 report is available free of charge at www.cleanedge.com/reports. Two webinars, one focused on corporations and the other on governments, are scheduled for December 2 and January 12. Learn more at: http://cleanedge.com/events/latest-webinar.
Information contained in this article is not intended to be investment advice or used as a guide to investing.