California-based Google plans to reach its goal to power all its global data centers and offices entirely with renewable energy sources (primarily wind, solar, and hydropower) by sometime in 2017. Google is the world's largest corporate purchaser of renewable energy and says that its move is "good for the economy, good for business, and good for our shareholders." The company works directly with large renewables suppliers such as NextEra Energy, which owns 115 grid-connected wind farms in North America. Google's electricity demand is huge. Since 2012, the company has signed contracts that will add nearly 2.6 gigawatts (GW) of wind and solar generation to the grid. In 2015, the company consumed 5.7 terawatt-hours of electricity—about as much power as San Francisco, California, consumes.

In the United States, 22 Fortune 500 companies—including Walmart, Apple, General Motors, Amazon, HP, Microsoft, and Facebook—are also rushing to source 100% of their electricity from renewables, according to Advanced Energy Economy. Furthermore, among Fortune 100 companies, 71 have aggressive renewable energy and sustainability targets. A global campaign for corporate use of 100% renewable energy (RE100) has commitments from 83 firms, including Ikea, Swiss RE, BMW, BT, and H&M. The RE100 campaign is now expanding from Europe and the United States to India and China.

Implications

Moves by large, successful tech companies such as Google, Amazon.com, and Microsoft to 100% renewables are significant because their power demands are massive and growing. In 2015, corporations signed more long-term renewable energy power purchase agreements (PPAs) than utilities signed, according to Navigant, reflecting the growing economic attractiveness of large commercial projects. The World Economic Forum reports that solar and wind power is now the same price or cheaper than new fossil-fuel capacity in more than 30 countries. In addition, renewable energy supply prices do not fluctuate and are a useful hedge against fossil-fuel price volatility in the 10- to 20-year time frame of energy-supply contracts. Transitioning to renewables also gives companies a way to highlight their concern about climate change.

Smaller companies are less able to sign complex and risky PPAs with renewables producers. In 2016, a group of nonprofits created the Renewable Energy Buyers Alliance (REBA) to seek alternative purchasing options for smaller firms that can't support utility-scale renewables projects. REBA's goal is to drive 60 GW of new US renewables capacity by 2025. Other nonprofits—including RE100, Corporate Renewable Buyers' Principles, and Business Renewables Center—are also targeting ways to make corporate renewables purchases easier.

Impacts/Disruptions

Corporate demand has become a key driver of large-scale renewable energy. Corporate buyers signed contracts for more than 3 GW in 2015—triple their purchases in 2014, according to the World Resources Institute. These long-term investments provide financial security for renewables developers and allow the industry to build new projects, increase economies of scale, reduce costs, and innovate.

New political realities in the United States and elsewhere have increased uncertainties about nations' abilities to reduce carbon emissions enough to avoid dangerous global warming in this century. Many leading companies are signaling their intent to continue with their own strategies regardless of government policy shifts.