2015: the year of renewable energy in business
- 04 February 2015
After a successful World Future Energy Summit in Abu Dhabi last month, Pedro Faria, Technical Director at CDP and Technical Advisor to RE100 - a new initiative helping companies switch to 100% renewable power – explains why he is optimistic in the quest for renewable energy adoption across the world and in the Gulf Cooperation Council (GCC).
As landmark years go, 2015 is shaping up to be a significant one in the energy world. The true impact of the on-going slump in oil prices, which began last year, is still unclear; but it could potentially shape key climate policy decisions in the coming months. For renewables, however, the future looks much brighter.
This year opened with news that Denmark had set a new world record in wind power – generating nearly 40% of its overall electricity from wind in 2014. As renewable energy capacity, investment and innovation continues to grow globally it’s likely that this record - and many more - will continue to be broken.
GCC countries have over 30 year’s history in renewable energy projects, but we are increasingly seeing more ambitious projects being realized across the region. With increased activity across the entire energy industry value chain, building a strong renewables industry here in the Gulf will encourage the world to realize the potential power of green energy as a fuel source.
Many of the world’s largest companies are already convinced. In November alone both IKEA and Google furthered their investment in renewable energy with new wind farm deals. Indeed, the Swedish furniture giant plans to commit nearly $2 billion to wind and solar projects by the end of 2015. The increased expectation of emissions regulation and the awareness that there is a business case for decarbonizing energy sources in an increasingly resource-constricted world has led ambitious companies to renewables.
But this switch has not been easy. Credit should go to companies making the brave commitment to power their businesses entirely via renewables. There are significant barriers holding many corporations back from making this shift. A key restriction is that a number of decision makers lack the basic knowledge of how to transition to renewable energy sources. Company executives tasked with this challenge face many questions: what form of renewable will best suit my company’s needs? How competitive are the contracts? Does it make more sense to work with a power provider or make a direct investment?
Companies signed up to The Climate Group and CDP’s RE100 initiative are at the forefront of the movement to decarbonize the world’s power system. In a collaborative way, they are helping to break these barriers in understanding associated with corporate renewable power procurement. These businesses, BT, IKEA, Mars and Swiss Re, amongst others, have pledged to procure 100% of their electricity from renewable sources.
The aim is that at least 100 other major businesses join RE100 by 2020 and make the 100% renewable resolution. Through their investment and procurement decisions they are leading the way forwards, helping to shape the energy market into becoming more conducive to other corporate renewable customers.
This year climate regulation will take center stage in Paris as countries come together to agree a global deal. And legislators will have a central role to play: companies will be taking policy considerations into account when deciding on their procurement strategy. By working with policy makers, governments across the world can help to drive faster change in energy markets.
The RE100 initiative is a petri dish for legislators to understand how they can enable companies to make renewable procurement decisions. But it is an environment that companies can learn from also. As more businesses transition to renewables, the increase in demand will help to fell the current obstacles facing this nascent market.
For those not wishing to be left behind, this year will be the best opportunity yet to embark on becoming a corporate renewable leader.
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- 2015 could be tipping point for the clean revolution
- India sees surge in clean energy investment
- China accounts for 29% of world’s total renewable energy investment
- Switching to renewables is a smart business decision, IKEA Group and Nestle say at the World Future Energy Summit in Abu Dhabi
- Infographic: 100 of world's most influential companies will commit to 100% renewable power
- We must 'bend the curve' from trends in energy sector for low carbon future: IEA