A growing number of the biggest and most influential companies on the planet are recognising the business value of renewable energy. Globally recognised brands are committing to renewables in order to achieve greater control over energy costs, increase energy security, enhance competitiveness, and deliver on emissions goals. Most recently at NYC Climate Week 2017, Kellogg, Estée Lauder, Citi and JPMorgan Chase amongst others all signed up to the RE100:- a collaborative, global initiative that unites more than 100 global firms committed to 100% renewable electricity. Companies joining the RE100 typically set a public goal to source 100% of their global electricity from renewable sources by a given year. There are now 110 members and collectively these companies now represent more 150 TWh of renewable electricity demand, equivalent to the energy needs of New York State.
This trend is not surprising given the very latest data on the economics of renewable energy summarised last week by Michael Liebreich of Bloomberg New Energy Finance (BNEF). Some of the major global developments highlighted in his 'State of the Clean Energy Industry' keynote address include:
a world record, unsubsidised price of 2.42c/kWh for solar generated electricity
the price of lithium battery storage plummeting since 2010 confounding even the most optimistic predictions
and renewables attracting more than 60% of new investment in power generating capacity worldwide.
Globally, current data suggests that the electricity sector is in the early stages of a remarkable transformation. The renewables sector has entered a key phase where 'new vs new' costs are comparable or better than building new gas or coal power stations. In the future BNEF predict that we will hit a tipping point where 'new beats old'. That is, the price of running existing gas or coal powered stations will be higher than installing and running renewable installations. This will result in market-driven, mass adoption of clean energy supplies. The proliferating availability of data and analytics for utilities, will further influence how the world generates, distributes and consumes power.
There are big challenges and exciting opportunities ahead. Expertise in demand led electricity markets is likely to be highly sought after in geographies with high renewables penetration. We are already seeing solar and more broadly cleantech as a hotbed of activity, particularly in California. Talented executives with deep experience in energy efficiency & procurement, policy and finance deployment are in very high demand.
There could also be opportunities for entrepreneurial investors in feedstock chemicals, coupling, for example, methanol plants and carbon dioxide capture with renewable energy installations. The technology already exists, pioneered in Iceland where the world's largest CO2 methanol plant went online in 2012 powered by hydro/geothermal. Utilising off-peak or surplus electricity generated by renewables to create industrial feedstock materials traditionally derived from petrochemicals has enormous potential to proliferate with access to cheap renewable energy sources.
The RE100 announcements at Climate Week demonstrate that large corporations can adapt very quickly to innovations in energy supply chains. Given that around half of global demand for power is from the private sector, this level of commitment will lead to further investment in renewables driving innovation, reducing costs and providing exciting opportunities for those with expertise in this rapidly evolving sector.