Introduction to RE100 and Its Influence
RE100 is a global campaign launched by CDP and the Climate Group to encourage companies to commit to 100% renewable energy by 2040. Since its inception in 2014, the initiative has attracted over 400 corporate members who are dedicated to transitioning from conventional to renewable energy sources. This movement toward a net-zero future is redefining corporate energy management as companies align their practices with the sustainability goals set by RE100. With recent updates to RE100’s guidance on renewable energy procurement, businesses are now prompted to enhance their energy strategies to meet the campaign’s elevated standards.
New Parameters for Renewable Electricity Procurement
One of the key changes RE100 introduced requires corporate members to observe a 15-year commissioning or repowering date limit when purchasing renewable electricity, covering at least 85% of their annual demand. This guidance aims to stimulate the development of new renewable energy projects by increasing demand for recent facilities, rather than older, established sources. This shift impacts corporate energy management by encouraging businesses to focus on supporting new projects in wind, solar, and other emerging renewable sectors, thereby promoting energy systems that are both environmentally responsible and future-focused.
Shifting Away from Unbundled EACs
In recent years, many RE100 members have relied heavily on unbundled Energy Attribute Certificates (EACs) to fulfill their renewable energy commitments. EACs represent renewable electricity generated by specific facilities, tracked from the point of origin to the end consumer, and are a relatively easy way for companies to reduce emissions on paper. However, under the new RE100 guidelines, companies are discouraged from relying solely on unbundled EACs from older hydropower plants. This change particularly impacts regions where hydropower has been a primary source, like Norway, which supplies 45% of its electricity through hydropower-based EACs. By shifting toward “newer” technologies, the guidelines incentivize companies to support more recently commissioned projects in sectors like wind and solar.
Promoting New Renewable Projects and Technologies
By emphasizing newer renewable sources, RE100 is actively shaping the demand for green energy innovations. Corporations are now encouraged to explore partnerships with recent or upcoming renewable projects, including solar and wind farms. This shift drives corporate energy management strategies toward long-term investment in the development of green energy infrastructure. Companies are also encouraged to diversify their energy sources and invest in technologies that foster a more resilient, sustainable energy market.
Hedging Against Future Procurement Risks
The updated RE100 guidance creates additional demand for new renewable projects, which could lead to higher prices for EACs from solar and wind energy sources. To mitigate this risk, companies are advised to consider multi-year forward contracts for EACs. These contracts allow businesses to secure volumes and prices for renewable energy in advance, offering a way to hedge against potential cost increases in the future. Such forward planning not only ensures energy cost predictability but also strengthens a company’s renewable energy strategy by locking in access to desired energy sources over time.
The Growing Importance of Sustainable Corporate Energy Management
The evolving RE100 standards highlight the critical role of sustainable energy management in corporate operations. Adopting a proactive approach to renewable energy procurement aligns with broader corporate sustainability goals and meets stakeholder expectations for environmental responsibility. Companies that align with RE100 not only strengthen their market positioning but also contribute meaningfully to global climate goals by fostering sustainable energy practices.
Conclusion: RE100’s Lasting Impact on Corporate Energy Management
RE100’s influence on corporate energy management is significant and continues to grow as the organization refines its standards. By pushing for newer renewable sources and encouraging energy cost stability through forward contracts, RE100 is transforming how companies approach sustainable energy. For corporations, these changes present an opportunity to lead in environmental stewardship, make strategic investments in future energy infrastructure, and secure a place in the net-zero economy. As RE100 evolves, its guidance will remain a benchmark for corporate commitment to renewable energy and sustainability.
