Solar may beat wind as corporate renewables grow — report

Source: By Haley Weiss, E&E News reporter • Posted: Thursday, August 22, 2019

Facebook sign. Photo credit: Facebook

A new report finds that corporate leaders set a record last year with contracting power purchase agreements for renewables. Facebook ranked first in terms of having the most renewable gigawatts under contract. Facebook

Sustainability commitments by major U.S. corporations over the next decade will create demand for up to 85 gigawatts of renewable energy, according to a report released this morning.

The analysis from Wood Mackenzie and the American Wind Energy Association found that projects contracted by top companies last year will generate a total of 6 GW of renewable energy once up and running, and analysts expect this number to grow in coming years. And though contracts in 2018 set a record, 95% of the energy consumed by the companies included in the report still comes from nonrenewable sources, the report said.

“In the absence of a federal mandate to decarbonise the US power grid, corporates are stepping up their efforts to address climate change,” said Dan Shreve, head of wind research at Wood Mackenzie and lead author of the report, in a press release.

Also, solar power soon could overtake wind power in some regions in terms of procurements of corporate and industrial customers.

“Wind’s long fight with fossil fuels is quickly transitioning to a need to craft a strategy to cope with solar competition,” the report reads. “As the energy transition unfolds in the United States it introduces new power market dynamics that fundamentally favor solar power over wind.”

Shreve said that power market dynamics and the continued reduction of solar power’s costs will place “significant pressure” on wind.

In the long term, both markets may evolve to together bolster the overall energy needs of the country, analysts said.

“Wind and solar are stronger in different parts of the country, so states must ensure they have competitive policies and adequate transmission infrastructure to attract investment in the renewable projects and business activities that they will power,” AWEA CEO Todd Kiernan said in the release.

The strengths and energy returns of wind and solar infrastructure vary based on factors such as an area’s weather conditions and available space, according to the report. In the Midwest, wind capacity is expected to double by 2040 while solar capacity increases twentyfold. But in the Northeast, where winters are dark and coastlines abound, wind is expected to maintain a clear advantage.

In the corporate and industrial market, Facebook, Google and Amazon had the most gigawatts of renewables under contract through 2018, Wood Mackenzie and AWEA said.

The report comes as federal tax credits for wind and solar are phasing down. A report this month from the Department of Energy found that wind costs are at record lows but the industry faces challenges from low natural gas prices and tax policy (Energywire, Aug. 13).

Reporter Christa Marshall contributed.