The largest ever corporate
deal for direct purchase of green power has been signed recently in Asia. Taiwan Semiconductor Manufacturing Company (TSMC), a supplier of Apple, will buy the entire output of Orsted’s 920 megawatts (Mw) offshore wind farm (Great Changhua 2b & 4). The final investment decision on the wind farm is expected to be taken by 2023, and full commissioning is likely by 2026.
Companies around the world are setting up renewable energy
projects on their own sites — when they have the space and they can — or buying green power directly from the generators. They often finalise the purchase agreements at the construction stage of the project, as has been done by TSMC.
green power market has been dominated by the US, with companies like Google, Facebook, Amazon and Microsoft taking the lead. Activity now seems to be picking up pace in the Asia-Pacific region, which accounted for 18 per cent of the corporate
power purchase agreements totaling 11.2 gigawatts (Gw) signed so far this year. Last year, the region’s share was limited to 6 per cent in total global deals of 19.6 Gw.
Using green power is one of the routes for companies to limit carbon emissions. The most ambitious of them want to offset all the carbon emissions that they have been responsible for over their lifetime, make sure their current operations are carbon-neutral or even carbon-negative and maximise the actual use of green power (rather than merely offsetting usage).
Google is the world’s top corporate buyer of green power on a cumulative basis. Google and Alphabet’s CEO, Sundar Pichai, made three significant announcements last month:
Google’s entire carbon legacy has been “eliminated” through high-quality carbon offsets. “Google’s lifetime net carbon footprint is now zero. We’re pleased to be the first major company to get this done,” he said.
After matching annual electricity consumption with renewables, it will attempt, by 2030, to run its business on carbon-free energy at all times — every hour of every day. “This is our biggest sustainability moonshot yet, with enormous practical and technical complexity. We are the first major company that’s set out to do this, and we aim to be the first to achieve it,” he said.
Google intends to sign up for 5 gigawatts of new carbon-free power by 2030, which would “spur” clean energy investments of $5 billion.
100 per cent renewables
The number of companies that have committed to powering their operations completely with renewable energy
under the RE100 initiative has crossed 260. The list covers diverse sectors and regions, with the recent entrants including names like PepsiCo, Intel and Sanofi.
The average target year for companies to reach the 100 per cent renewables goal is 2028, according to the RE100 annual report of 2019, which also showed that over 40 per cent of the new joiners last year were from the Asia-Pacific region.
The lower cost of renewables is a big driver for the corporate swing towards green power, but there is a sustainability push coming from consumers of products and services too.
Some countries are also talking about being powered 100 per cent by carbon-free energy. The diesel-driven economy of Maldives, for instance, wants to be 100 per cent powered by green energy ultimately, and is expecting its ongoing transition to clean energy to increase the flow of tourists, besides halving the cost of power. In an interview with BloombergNEF, Maldives Environment Minister Hussain Rasheed Hassan said: “It will be an advantage for us to be environmentally more sustainable because that can be a driving factor for tourism as well. People like to come to a resort which is run by solar energy or other renewable energy.
The number of Indian companies that have committed to power themselves 100 per cent with renewable energy is limited to five for now — Infosys, Tata Motors, Dalmia Cement, Mahindra Holidays and Hatsun Agro — but there is a long list of large and small companies which are expanding renewables use.
For Asian Paints, renewables accounted for 57 per cent of the total power consumed at its manufacturing locations in the last fiscal year ended March 2020. It has about 40 Mw installed, according to its latest annual report. Pharmaceutical company Cipla expanded its rooftop solar capacity, procured offsite green power and invested capital in a special purpose vehicle, AMPSolar Power Systems, for setting up a 30 Mw (DC) captive solar plant in Maharashtra. JK Tyre managed to get 50 per cent of its power from renewables last year (39 per cent in 2018-19). Apparel firm Arvind is adding 10 Mw of rooftop solar to its existing 24 Mw solar rooftop capacity while dairy company Heritage Foods has over 10 Mw of solar and wind capacity for captive consumption.