Clean energy consumption increases, yet many RE100 members push back their renewable energy targets
Findings from the annual RE100 report have shown that collectively members have increased their consumption of renewable energy, however, several firms have seen their targets pushed back as they grapple with the energy crisis and tough economic conditions.
RE100 is a joint initiative between CDP and the Climate Group, which aims to bring together corporations committed to 100% renewable electricity, with commitments by member companies to meet this target by 2040. The latest disclosure included 334 responses from a potential 355 members who had been asked to report on their progress in this reporting cycle. The headline finding from the latest research was that RE100 member companies reported consuming 49% renewable electricity in 2021, up from 45% in 2020[i]. Yet, challenges faced by companies, including high costs of renewable energy, procurement issues, and limited supplies, have seen a number of RE100 members push back their targets. This has caused the average target to move backwards by one year, to 2031, compared to last year’s report. However, despite market challenges, there was positivity, with 14 members bringing their 100% renewables targets forward- on average, these improved by 12 years.
Figure 1: Overview of RE100’s growth
Trends in sourcing energy
The research also identified trends in how renewables are being sourced, with power purchase agreements (PPAs) now being used to deliver 35% of the reported volume of renewable electricity members consume. A PPA is an agreement that a business or organisation will buy electricity from a generator (for example, a solar or wind farm) at an agreed price over a fixed term, usually a long-term period of 10-15 years[ii]. The benefits of PPAs are that they not only enhance reputation through the use of renewable energy but provide long-term commitment and price certainty. Crucially, PPAs held by RE100 members tend to be with new renewable electricity projects; thus members play an essential role in the financing of new renewable electricity capacity.
Challenges and disparities between markets remain
Regional trends are important, and the latest research highlighted the challenges in fledgling markets for renewables. Whilst RE100 has more traditionally sourced its members from western markets, as of 2018, new membership to RE100 has largely been headquartered in the Asia-Pacific region, and in 2021, 58% of all new members were from APAC.
At present, Asia accounts for 36% of all energy use by RE100 members, yet only 15% of the procurement of renewable electricity is reported. In addition, EACs (Energy Attribute Certificate) dominate in the region and are used to deliver 52% of purchased volume. With EACs, companies can claim renewable energy as part of their own electricity consumption. However, EACs do not represent the electricity itself: “they are contractual instruments to convey information about the produced electricity like the type of power plant (i.e. hydropower plant, wind power plant, solar plant), the actual powerplant where the renewable electricity has been produced (i.e. name of the plant, location) and the actual amount of electricity produced (unit is one-megawatt hour MWh of renewable electricity)”[iii] Thus, these are short-term contracts, which can be traded and sold, and are limited in their availability.
According to RE100s latest research, Japan, the Republic of Korea, Singapore, and China maintain their positions as the markets where the greatest number of members report facing barriers to procuring renewable electricity. To tackle this, RE100 works with members, international partners and non-governmental organisations to address the market and policy barriers preventing companies from sourcing renewable electricity. To achieve this, RE100 has created a list of Global Policy Messages. In countries including India and the Republic of Korea, RE100 has adapted its policies to create localised messaging tailored to each specific market. RE100 believes that policy change in challenging markets will give members the confidence to set earlier target dates.
The RE100 global policy messages are as follows:
- Create a level playing field on which renewable electricity competes fairly with fossil-fuel electricity and reflects the cost-competitiveness of renewable electricity.
- Remove regulatory barriers and implement stable frameworks to facilitate the uptake of corporate renewable electricity sourcing.
- Create an electricity market structure that allows for direct trade between corporate buyers of all sizes and renewable electricity suppliers.
- Work with utilities or electricity suppliers to provide options for corporate renewable electricity sourcing.
- Promote direct investments in on-site and off-site renewable electricity projects.
- Support a credible and transparent system for issuing, tracking, and certifying competitively priced EACs[iv].
[i] CDP_RE100_Report_2023 (2).pdf (there100.org)
[ii] PPA: A beginner’s guide to power purchase agreements - Renewable energy help centre - City of Sydney (nsw.gov.au)
[iii] Energy Attribute Certificates (EACs) (energy-attribute-certificates.com)
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