Report: The Role of Corporate Energy Procurement in Grid Decarbonization

This report was prepared by Green Strategies, Inc in conjunction with The NorthBridge Group and the Columbia University Center on Global Energy Policy. See below for the report’s abstract and a downloadable PDF of the full text.

Abstract

By adopting and implementing aggressive renewable energy goals, leading companies have enabled the development of multiple gigawatts (GW) of new renewable generation capacity and demonstrated the ability of corporate buyers to reshape the energy landscape. From 2014 to 2018, large companies announced transactions with off-site renewable energy projects representing over 15 GW of capacity – equal to around one-quarter of all such new renewable generation capacity installed across the country in that same period. This is a great success story.

To achieve mid-century targets for limiting global warming, experts indicate that the U.S. electric grid must achieve full decarbonization by 2050 (if not sooner) – an immense challenge given the current reliance on fossil generators and given the likely future demands for generation arising from the electrification of other sectors. The fastest and most certain pathway to a decarbonized grid is one that utilizes a broad portfolio of zero-carbon resources that can provide firm and dispatchable power to complement intermittent generation. Large energy buyers can accelerate this urgently needed transition to a zero-carbon grid with a new generation of procurement targets and practices. A next generation of goals would prioritize all zero-carbon electricity options, including but not limited to wind and solar, and involve an expanded range of procurement objectives and activities that seek to maximize the carbon impact of procurement and reduce a buyer’s consumption of grid-supplied fossil generation at more times and at more locations.

In this paper, we explore how a “next generation” of corporate electricity procurement strategies and goals could accelerate grid decarbonization to meet science-driven targets. Our analysis covers: A) the imperative of a zero-carbon grid and how a pathway that prioritizes a broad portfolio of zero-carbon generation best aligns with reaching that goal; B) the achievements – and shortcomings – of current corporate renewable energy procurement efforts; C) the possible elements and objectives of next generation corporate procurement strategies; D) example transaction structures for next generation corporate procurements and the potential barriers those transactions might find in today’s marketplace; and E) other challenges corporate buyers might face in adopting and executing next generation goals.

 

Full Report:

To download, find the download icon on the bottom banner of the embedded PDF. 

Green Strategies Report on Next Generation Corporate Procurement - Revised 5-2020

Don’t look to the energy sector to solve our waste problem

Working on environmental issues for a living is not for the faint of heart. It always feels like there are too many problems and too few solutions — and even the solutions can turn out to be problems.

One big problem getting a lot of attention is plastic waste. Everyone has heard the admonition to “reduce, reuse, and recycle.” The increasingly ubiquitous use of reusable water bottles, shopping bags, and straws are signs that we are getting better at reducing and reusing. When it comes to recycling, however, we may be heading in the wrong direction. Prior to severe new international restrictions on imports enacted in 2018, the U.S. was sending 4,000 shipping containers of materials per day to China for recycling — including about a third of our waste plastic. In 2018, China accepted only about 4.5% of our plastic. Since these restrictions took effect, hundreds of towns and cities across the country have either shut down or greatly reduced their recycling programs. Our waste is piling up.

And perhaps the mother of all environmental problems is climate change. The International Panel on Climate Change (IPCC), the world’s leading authority on the issue, has declared that in order to avoid the worst effects of climate change we need to transition to a net-zero carbon economy by mid-century. Such “economy-wide” decarbonization includes electricity, heavy industry, transportation, and agriculture. Of these sectors, electricity might be the most important. If we can decarbonize the grid, we not only eliminate the tremendous amount of greenhouse gases we emit in producing electricity, we also then can electrify other sectors (like transportation, the production of heat, and some industrial processes) knowing they in turn will be powered by climate-friendly energy. But today, about two-thirds of our electric grid is powered by greenhouse gas-emitting fossil energy. We have a long way to go.

What do these two problems have to do with each other? One of the ways we have dealt with municipal solid waste in the U.S. is to incinerate it. And through incineration, you can produce electricity that is then put on the grid (termed “waste-to-energy” or “WTE”). Some states deem WTE to be “renewable energy” and include it in policies that subsidize and support other forms of renewable energy, like wind and solar. Now, in the face of mounting waste including more and more plastic, the incineration industry believes that we can kill two birds with one stone: dispose of our mounting waste with more incineration and help fight climate change with more “renewable energy.” Sounds great, right?

Um, no.

Regarding “bird #1” — the plastic and waste crisis — incineration is not the answer. In addition to causing local air pollution and health impacts, more demand for waste streams that include otherwise recyclable materials will further undercut the economics of our already struggling recycling. And if incineration is seen by consumers as a “solution” to our plastics crisis, it could undermine our progress on improving reduction and reuse behaviors. The WTE stone might just kill the wrong bird.

“Bird #2” — climate change — is the big bird, and unfortunately, the WTE “stone” badly misses its target. Whether WTE is “renewable” is debatable. It’s also irrelevant. What the climate cares about — and what matters in our efforts to decarbonize the grid — are greenhouse gas emissions. Those of us who work on climate change support wind and solar because they are zero emission, not because they are “renewable.” To decarbonize the grid, we need all forms of zero-carbon generation — and we need a lot more of it. Stated differently, we need to stop adding carbon-intensive generation — such as waste incineration — to our energy mix and rapidly phase out the dirty generation we have.

Adding more waste-to-energy generation would set us back in our critical need to decarbonize the grid. Even before China’s import restrictions, half of the carbon dioxide emissions from waste incineration came from plastic. Plastic is made from fossil fuels and contains a lot of embedded carbon which is released to the atmosphere when combusted. With declining recycling rates, we will have only more plastic in our waste stream. The dirty secret (literally) is that the energy produced from this mixed waste incineration is nearly as greenhouse gas intensive as coal and worse than natural gas. To make matters worse, some states include WTE in “renewable” energy subsidy programs, which means this dirty source of energy competes directly with zero emission renewables like wind and solar.

The urgent task of decarbonizing our electric grid is immensely challenging. At a time that we must rapidly add clean energy to the grid, we cannot afford to take a step backward with waste-to-energy. Our only option is to move forward.

Roger Ballentine is the president of Green Strategies, Inc. He served as chairman of the White House Climate Change Task Force under President Bill Clinton.

 

Originally published by Energy News.

Decarbonizing the Electricity Sector & Beyond

This week, the Aspen Institute released its Summary Report of their 2019 Winter Energy Roundtable: Decarbonizing the Electricity Sector & Beyond. Roger Ballentine, co-author of the report along with Jim Connaughton and Dave Grossman, has been co-chair of the Aspen Institute’s Clean Energy Forum for seven years.

Aspen Institute Report Contents

The latest Intergovernmental Panel on Climate Change (IPCC) report has intensified the focus on measures to achieve deep decarbonization. For the United States, most experts say that, if the aim is to be on a 1.5°C pathway, the United States must transition to a net-zero carbon profile economy-wide by around mid-century, going negative thereafter.

At the 2019 Aspen Institute Winter Energy Roundtable, February 25-28, ~50 executives, entrepreneurs, policy makers and thought leaders gathered to tackle how the US can achieve economy-wide decarbonization on a scientifically called-for timeline while ensuring national economic competitiveness and a just transition.

Aspen InstituteDuring these discussions, the group agreed that there are five basic elements necessary to decarbonize the energy system: (1) employ energy efficiency to the maximum degree; (2) decarbonize the electricity supply; (3) electrify other sectors as much as possible, including heat, transportation, and industrial processes; (4) use zero-carbon fuels for the areas that cannot be effectively electrified; and (5) use carbon capture, utilization, and storage (CCUS) and carbon dioxide removal (CDR) for areas where fossil fuels are still needed and for achieving negative emissions.

Read the report to learn more about these five elements or contact us directly.