Are You Ready to Switch to Renewable Power?
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By Chris Petersen   
Sunday, 01 July 2007
smc The cost of using energy sources such as wind, solar, biomass and geothermal is decreasing as capacity increases.
The cost of using energy sources such as wind, solar, biomass and geothermal is decreasing as capacity increases.
The earliest industries had no choice but to use renewable energy sources. Millers relied on wind and water to power their mills, farmers used animal labor to tend to their fields and blacksmiths burned wood to heat their forges. Hundreds of years later, the majority of businesses run on energy generated by fossil fuels or nuclear energy, and are coming to grips with the potential long-term impact those energy sources have on the environment.

The good news is that the renewable energy option is making a big-time comeback, and it’s easier than ever for your company to commit to it. The cost of using energy sources such as wind, solar, biomass and geothermal is decreasing as capacity increases. Electricity providers are offering wider energy source choices, and businesses even have the option to purchase green energy credits without actually being powered by a renewable energy source.

As environmental restrictions become tighter and public perception of a company’s ecological impact becomes more important, many companies are looking for ways to incorporate renewable energy in their portfolios. Although it might seem difficult for big companies to make such a move, many of the country’s largest enterprises have already taken the plunge.

A growing partnership
U.S. EPA’s Green Power Partnership is made up of businesses and other organizations that have made significant commitments to the purchase of renewable energy. Among the more than 700 businesses, municipalities and other organizations in the partnership are companies such as Starbucks, Johnson & Johnson and PepsiCo. PepsiCo, in particular, purchases 100 percent of its 1 billion-kilowatt-hour (kWh) energy usage from a variety of renewable energy sources, according to the EPA.

“It’s snowballing, quickly, all across the country,” says Michael Eckhart, president of the American Council on Renewable Energy (ACORE), a nonprofit organization that promotes the use of renewable energy. He says the practice is gaining so much momentum because of the influence of the next generation of emerging business leaders.

“This is a classic case of the new-generation people – who are going to be living in the world for the next 50 years – [being] concerned about the state of the world,” Eckhart says. “Adopting strategies to embrace the concept of sustainability is a fundamental, responsible and positive thing that every board of directors can do and every CEO can do, and they should all do it.”

There are three main ways in which a business can commit to renewable energy, according to EPA. A company can either purchase electricity directly from renewable power sources through its electrical provider, it can purchase credits toward renewable energy in the form of renewable energy certificates (RECs) or “green tags,” or it can build its own on-site renewable generation system.

Atraight from the source Of those three options, buying renewable electricity directly from the utility is the most straightforward. In its Guide to Purchasing Green Power, the EPA says businesses can either purchase renewable energy in fixed-quantity blocks or as a percentage of their monthly usage.

However, the utility structure of each individual state determines whether or not green electricity is available from a utility. Although less direct than buying renewable energy straight from the source, RECs provide a business with an alternative way to support cleaner energy.

Giving credit RECs allow an electricity consumer to offset its consumption of conventional energy by contributing to green power providers, who then add the power generated to the grid. Each 1,000 kWh of green energy produced is given its own REC, which is then sold on the open market.

The principle is similar to Kyoto Protocol’s carbon credit system, through which a country that produces too much carbon dioxide can “balance the books” by purchasing credits from a country that produces much less carbon dioxide. Eckhart says the advent of RECs has made it easier than ever for businesses to support renewable energy.

“[There are] no obstacles anymore because of the green tag market,” he says. “Anyone can get started immediately with no barriers and leave those problems to the developers of those projects.”

RECs are how PepsiCo and other members of the Green Power Partnership were able to achieve their status. The only drawback to RECs, the EPA says, is that they do not provide businesses with the same protection against rate fluctuations that direct green power does.

On the other hand, RECs can help a business go greener without the intense investment required by other methods. Eckhart says businesses interested in purchasing green electricity directly or building their own generation plant should consult an outside expert before jumping into the market, since the utility structure of each state is different. “It does take good technical and financial advice to do it well, but for those who don’t want to get into those issues, simply buying green tags from the market [will do],” he says.

Do-it-yourself power
Companies also have the option of eliminating the middleman altogether and building their own on-site renewable generation. These can take the form of solar panels, wind farms, landfill or sewage methane gas combustion engines, biomass burners that burn plant material or hydrogen fuel cells. EPA says that “on-site renewable generation offers advantages such as enhanced reliability, power quality and protection against price volatility.”

Even though the capital costs of on-site generation are higher than traditional generation, EPA says, “annual budgets for maintaining the system are much easier to justify, which makes it easier to sustain a commitment to renewable power.” Eckhart says the technology currently available makes it possible for a company to install virtually any type of renewable energy source at its facilities. “We are faced with a wonderful pipeline of technologies coming at us right now,” he says. “We can buy all these systems today and be sure that there will be better systems tomorrow.”

Baby steps
Even without making the choice to switch to renewable energy, Eckhart says, a company can become a greener electrical consumer by making a few common-sense changes to its operations. They may not have the flash and PR benefits of switching to renewable resources for energy, but they will contribute to the goal of reducing your business’ environmental footprint.

“The first and most immediate thing is energy efficiency and energy conservation,” Eckhart says. “We use a lot more energy than we need.” Simple things like energy saving light bulbs, shutting down unused electronics and cycling loads during nonpeak periods are steps that businesses can take to reduce their energy usage and save money, he says. Even without using renewable energy, simple changes such as these can go a long way to improving the overall energy efficiency and environmental health of companies of any size.

Many companies are already taking this to heart, and with the growing movement toward renewable energy, Eckhart says he’s seeing a dramatic shift toward environmental responsibility in the business world.

Going green isn’t just a marketing buzzword – it’s a realistic, attainable goal for businesses of practically any size. What’s more, it’s gradually becoming the norm.

The business world has made huge strides since the earliest days of commerce, but renewable energy may be one area in which looking to the past may be the right model for ensuring the best possible future. “Buying the dirtiest, cheapest electricity is no longer the thing to do in corporate America,” Eckhart says.
 
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