Corporations Begin to Lead the Cleantech Movement: Power Purchase Agreements (PPAs)
Decades of profit-hungry corporations have caused many of the negative environmental realities that exist today. But it’s a pleasant surprise to know that the tectonic plates of the business landscape are finally shifting. Corporations are now actually leading the charge to a clean future.
Corporations Seeing the Light
Tech companies use an enormous amount of data. Siri needs a home and so does all of the world’s data. And data centers use an enormous amount of energy, around 2% of total U.S. consumption. Corporations could reduce or even eliminate this big cost by switching to renewable energy.
Google made headlines in 2017 as the first company to achieve the 100% renewable energy mark. That means that Google has brought enough electricity onto the grid by purchasing it from clean energy project developers to run all of its operations.
Just this year, Apple also announced that all of its facilities across 43 countries, including retail stores, offices, and data centers are now powered by 100% clean energy. Apple is actually generating much of its own energy; below is an image of solar panels atop Apple Park, the company’s new “spaceship” HQ.
Most other companies are switching to clean energy by contracting Power Purchase Agreements, or PPAs, as Google has done.
So how does it work? Are these companies literally using the electrons from solar panels and wind turbines to turn on their lights and power their gourmet meals and cappuccino machines?
What Does a Corporate PPA Look like in Practical Terms?
As you can see below, many companies partake in PPAs.
Power purchase agreements are long-term and large-scale contracts to buy renewable energy. To understand how they work, let’s look at an example.
Microsoft recently announced that it will buy 315 megawatts of solar power in Virginia from project developer sPower. Microsoft struck this deal to power all the data centers in Virginia and it happens to be the largest corporate purchase of solar power in the US.
Because Microsoft owns the power generation, it locks in the rate at which it will pay for electricity throughout the life of the contract.
But PPAs do not necessarily mean that every light turned on by a company is fueled by clean energy. PPAs allow companies to pay for the production of clean energy that will be used by someone on the grid.
A Google report states: “From a physical perspective, this is just as good as consuming the renewable energy directly. That’s because electricity on a grid is fungible; electrons generated in one spot can’t be directed to any specific user on the grid, any more than a cup of water poured into a river could be directed to a particular stream. So it doesn’t make much of a difference where the renewable energy that we buy is located, as long as it’s on the same grid as our data center.”
Who knows, maybe your computer right now runs on electricity made possible by a corporate PPA. Check out all the PPA locations that Google has around the world:
In a Capitalistic System, Corporations are King
…and that’s a good thing in this case.
RE100 is a collaborative, global initiative uniting more than 100 influential businesses committed to 100% renewable electricity. Here are the 100 companies.
Utilizing PPAs is just the beginning. Companies are recognizing the importance of leading towards a clean future, which is what we all want. Now they are mobilizing their extensive resources to do so. Lisa Jackson, Vice President for Environment, Policy, and Social Initiatives at Apple said, “We have to be the ripple on the pond…we can’t just be 100% renewable energy — we have to bring others with us.”
Act on Climate
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