The Corporate Commitment To Green Energy Is Helping Rural America
Turbines blow in the wind at an Xcel Energy wind farm located on the border of Colorado and Wyoming south of Cheyenne, Wyo., in this file photograph taken on Oct. 10, 2002. A three-day national convention will open on Monday in Denver as the American Wind Energy Association expects about 4,000 participants to take part as interest hits new highs in using wind to generate power. (AP Photo/David Zalubowski, file)
The signage is all around — that renewable energy has all green lights ahead, despite the current White House’s emphasis on the expansion of traditional fossil fuels. Both corporate America and the governors from 20 states are going all-in to support sustainable fuels.
Their reasoning is grounded in economics — that the cost of wind and solar technologies has fallen dramatically and that, in turn, has led to their impressive growth. Indeed, about 60% of the electricity added to the grid in 2016 came from wind and solar energy.
“The growth of the renewable energy industry is an American success story built on federal research and development, state policy leadership, private sector investment, and ingenuity,” write Governors Gina Raimondo, D-RI. and Sam Brownback, R-Kan., also the chair and vice-chair of the Governors Wind Energy Coalition, in a letter to President Trump.
And it is rural America that is benefiting from this expansion, they insist, which makes up Trump’s core support. For example, U.S. wind facilities have paid rural landowners $222 million a year while 70% of the nation’s wind farms are located in low-income areas.
The result? Last year, wind energy employed more than 100,000 workers in all 50 states while the solar industry is employing more than 200,000 people. Texas, meanwhile, leads the nation with 20,000 megawatts of its 82,000 megawatt wind energy base.
The trend has no doubt been facilitated by American companies that have vowed to increase their stakes in renewable energy, which could take place by either investing directly in such projects or by entering into power purchase agreements in which they agree to buy the output from those that generate it. General Motors and WalMart are two such companies.
Walmart, for example, is the first retailer with an emissions-reduction plan approved by the Science Based Targets Initiative, in alignment with the Paris Climate Agreement in December 2015, the company says. Under the approved plan, Walmart will use a combination of energy-efficiency measures and renewable energy to achieve an 18% emissions reduction in its own operations by 2025.
Additionally, Walmart will work with suppliers to reduce emissions by 1 gigaton by 2030, which it says is the equivalent to taking more than 211 million passenger vehicles off of U.S. roads and highways for a year.
And GM is investing in renewable energy to mitigate its carbon emissions. It has a goal of ending coal use in North America and to continue investing in green energy, which means increasing its current 106 megawatts of renewable energy to 125 megawatts in the coming years.
“At GM, we’re committed to efforts in our facilities that create business value and strengthen communities where we live and work,” says Rob Threlkeld, GM global manager of renewable energy, in a news release.
Nationally, about 30 states have enacted some variation of renewable portfolio standards. Those rules, in fact, are given credit for the preponderance of wind and solar installations, says IHS Emerging Energy Research. But the utilities domiciled in those states are also adding that green power because their customers are requesting it.
A decade ago, for example, Duke Energy didn’t own any renewable energy assets. Today it owns or contracts for 3,000 megawatts — a number that it expects to increase to 8,000 megawatts by 2020.
“We will need to decrease our carbon footprint over the long-term and we will need to work with our stakeholders to have this happen,” says Steve Young, chief financial officer for Duke, in a interview.
Neither the utilities nor the companies buying into green energy are deterred by the Trump administration’s cold shoulder. Bloomberg New Energy Finance, for example, is projecting 33% growth in wind and solar energies over the next two years even without a national carbon strategy.
Corporate America makes capital allocations with an eye toward the future. To that end, the sign posts are pretty clear and a low carbon economy is the ultimate destination. The recent growth of wind and solar energies is thus just a precursor of more to come.