RENEWABLE ENERGY IS UNSTOPPABLE!
By Tom Lindberg, Oslo, February 5 2015
ECOHZ has just completed its 2014 business year, and before diving headlong into 2015, we find it useful to stop for a brief moment to reflect on what we see moving forward.
Climate change was again back on the global agenda with strength in 2014. Much attention was given to gloomy UNPCC projections, record-breaking CO2 emissions, extreme weather conditions becoming the norm, and 2014 formally becoming the hottest year ever. Much attention was also given to the need for real international commitment at COP21 in Paris later this year, and what we risk, if leading nations continue to pretend that climate change will go away or solve itself. The situation is dramatic, and change must come.
Despite thissomewhat somber and gloomy climate backdrop there is luckily much great news that should inspire optimism and constructive action from us all.
On a global basis the generation and use of energy is responsible for 40% of greenhouse gas (GHG) emissions. For the global community to succeed in curbing GHG emissions, a rapid transition away from fossil-based generation to more renewable sources is the single most important objective.
AND WHAT A YEAR 2014 WAS!
The fossil industry is finally on the ropes, and renewables are deservingly taking centre stage.
ECOHZ has a vision to “change energy behaviour”. Never have I, and the ECOHZ team, felt this vision to be more relevant and crucial.
Let usquickly look at a few of many highlights from this last year:
Institutional investors and leading pension fundssurge to divest from fossil assets
World oil prices crash - downby 50% inless than 6 months
Wind generates nearly 40% of Danish electricity
Solar prices again plummet, 82 % of world’s population in 2020 projected to live in areas with where solar will reach grid parity
In the US market, solar (PV) installations continue to boom with a new household project being installed every 3 minutes
Germany for the first time got more electricity from renewables than any other source of energy – during first 9 months of 2014
Wind energy in China became the most cost-effective renewable resource and more cost-competitive than even oil and gas
22% of worlds electricity is now renewable, and increasing
Green finance becoming preferred option for many investors. Oslo Stock Exchange is the first exchange in the world to have separate lists for green bonds.
Costa Rica is set to go 100% renewable by 2021
Renewables create more jobs than ever. Now more Canadians work in clean energy than in the oil sands.
Sales of electric cars, using clean & renewable power, reaching an astounding 13 % of all new cars sold in 2014 - in a blazing Norwegian market setting the pace for the rest of the world
Of the total electricity used on a global basis, 50% is consumed by the corporate sector. Engaging the corporate sector in changing their energy behaviour is thus one of the most critical issues on the broad climate change agenda.
Over the last decade, we have seen the corporate sector gradually stepping up to the challenge, and in 2014 this has finally materialized into a strong and cohesive “renewable movement”. Businesses around the world seem to have tired of waiting for governments, and decided to take their own action. Focus is both on using less energy, reduced costs, and on switching from carbon emitting energy sources to clean and renewable sources.
Press and media has increasingly displayed an interest in bringing renewables to the front page. Beyond the very impressive and visible actions taken by multinationals like IKEA, Apple, Google, Mars, Lego and others, we also experience a much broader undercurrent of activities –where the starring roles are filled by companies from all industries, of all sizes, with local and international presence.
Beyond the aspect of reducing energy costs, we see five clear reasons behind businesses engaging in renewables.
Carbon accounting and footprinting
Sustainability reporting and CSR rating
Competitive positioning – storytelling - “making a real difference”
Business opportunity & ROI
Energy price hedging
Businesses can choose from arange of alternatives routes to engage in renewables. When making strategic choices to purchase green power, contracting renewables through a long term PPA (Power Purchase Agreement) or making direct investment(also long term) wind- or solar-parks, companies need to consider these alternative choices with their need for flexibility, willingness to commit long-term, industrial capabilities, risk preferences and of course financial capability.
INDUSTRY RENEWABLE INITIATIVES
This last year brought numerous leading corporates together as we haven’t seen before - committing to ambitious renewable goals.
One US-based initiative spearheaded by WWF and World Resource Institute (WRI) – the Corporate Renewable Energy Buyers Principle – brought 19 multinationals together to demand improved ways of purchasing renewable energy.
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RE100 is another impressive initiative brought about by the Climate Group and CDP. Their target is to have 100 of the world’s largest companies commit to 100% renewable power use by 2020.
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After four years of diligent work and widestakeholder consultations, the GHG Protocol published a revised Scope 2 Guidance, bringing new clarity and international consistency to how companies shall measure and manage their energy related CO2 emissions.
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CDP, the world’s leading corporate environmental “watchdog”– saw 81% of Fortune 500 companies report on CDP’s comprehensive questionnaire. Renewables is an integral part, and will be 100 % aligned with GHG Protocol during 2015.
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The global data centre industry is growing fast, as is their energy consumption. Greenpeace has worked to create an urgency among the major players, and have impressive results with their “Clicking Clean” initiative.
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GREEN POWER – TRACKED AND DOCUMENTED
The demand for tracked, documented green power is growing sharply – in all geographies where such markets are established. This means primarilyGO (Guarantees of Origin) in Europe,RECs in North America and national markets in countries like Australia and Japan.
Also outside North America and Europe, the interest ison the rise, and a new initiative – International REC Standard (I-REC) – was established in 2014, to ensure that corporate demand can be fulfilled on a more global scale. I-REC is a standard and a system – based on international best practices - for delivering green power in new markets. ECOHZ is committed to be an active contributor in this process.
In Europe, the growth in the GO-based green power market has been impressive since its inception, but 2014 looks to be a real turning point. Purchased volumes will for the first time surpass 400 TWh.This represents in excess of 40% of all renewable power in “greater Europe”.
On the supply side, the story is similar. During the last year another three countries adopted the GO standard and joined the common “tracking hub”, with a list of new applicants still growing. And, for the first time all five renewable technologies are finally “well represented” with significant volumes.
As a response to the increased demand for green power, and signals from corporate purchasers that they will look for solutions that directly link green power purchases with the financing and building of new renewable power, ECOHZ launched GO2. This is a new and innovative approach, which brings measurable impact from a green power purchase. GO2 has been well received by the market – and has secured recognition from both CDP and the GHG Protocol.
Moving forward…
ECOHZ has taken great steps in 2014 in building an organization that shall serve all our great partners and customers in 2015 even better. For some market players 2014 was turbulent, and ECOHZ therefore takes pride in showing profitable growth again in 2014 – with sales up by 8 %.
The ECOHZ team is enthusiastic about 2015 – and is ready to work even harder to ensure that you reach your renewable goals.
Let’s go out and change energy behaviour!