As of December 1st, Google became the single largest corporate purchaser of renewable power in the world, joining 116 other companies that have committed to ‘going 100% renewable.’ It’s tempting to see corporate renewable pledges as a balm to otherwise bleak predictions. But what does ‘going renewable’ actually entail? Are companies like Apple and Amazon actually using 100% renewable energy? And are their purchasing decisions truly driving the production of more renewable energy for the rest of us?
This is the first in a series of fact forward articles about the nation’s energy future, delving into who, what, and how 21st century electricity production is nothing like we’ve seen before. Don’t worry if you’re not a technical whiz. We’re starting with the fundamentals, and breaking those pesky buzzwords down to the atomic level.
ELECTRICITY PRODUCTION AT THE SOURCE
To understand the clean energy revolution, it’s first important to understand how electricity is generated. Nearly all buildings in the U.S. are connected to a regional power grid (there are 9 in total), a self-contained system that creates, transmits, and distributes electricity. Within each grid, electricity is created by various generation stations, such as wind turbines, hydroelectric plants, nuclear facilities, natural gas or coal fired power plants. This crowd of generators is managed by a regional transmission organization, which determines which stations power the grid at any given moment. Depending on the electricity needed, any or all generators can be in use at the same time. Once the power is converted to a lower voltage, utility companies such as Duquesne Light or West Penn Power distribute the electricity to individual properties.
In Pennsylvania, electricity supply and distribution are managed by different companies. Distribution utilities are determined by geographic area, but customers are allowed to choose their electricity supplier. For example, if your house uses 10,000 kilowatt hours (kWh) of energy per year, and you choose Green Mountain Energy’s wind energy plan, 10,000 kWh of wind energy will enter the regional grid at some point during the year. Your house is not specifically powered by renewable energy. Within an electrical grid, there is no way to guide which electrons go where, so your house receives whatever mix of electricity is currently powering the entire grid. Even if you have installed an independent solar array, your house still receives the grid’s overall electricity mix.
That is not to say that your choice doesn’t make an impact. On the contrary, if everyone purchased renewables, or even half of local customers, the regional grid’s carbon intensity would be significantly reduced, and regional renewable energy production would rise to match increased demand. However, this distinction is the key to understanding how companies ‘go renewable’ in entirely different ways, and with varying effects on local communities, the environment, and the clean energy supply at large.
A RENEWABLE (REC)LAMATION
Every company that ‘uses’ renewable energy employs different methods to achieve their status, many a combination of several sources. To publicly claim renewable resource use, companies must purchase a Renewable Energy Certificate (REC), or a credit released with every 1,000 kWh of renewable energy produced. If for example a wind farm produces 5,000 kWh of energy, they can sell 5 RECs on the market. A company which uses 5,000 kWh per year could then purchase those RECs to its annual energy usage, and legally claim to be 100% renewably powered. RECs allow companies to trace ‘the source’ of their electricity, even if facilities are still connected to the grid.
The varying impacts of these purchases largely depends on what kind of REC the company acquires. In many cases, companies can purchase RECs from producers outside their regional grid, claiming to green their power while saving significantly from market efficiencies (solar energy in Arizona is much cheaper than in Pennsylvania). Though the company is supporting renewable energy production in the nation, they have not actually improved the electricity supply to their facilities.
THE GOOGLE EFFECT
Google’s energy purchase has received a lot of attention because of its sheer size. Google’s parent company, Alphabet, powers data centers, corporate campuses, and research facilities, to the tune of 3,186 gigawatts of energy per year. That’s the same as 318,600 homes in the U.S, and double the renewable energy use of Amazon as of 2016. Google buys RECs directly from renewable electricity generators, and most importantly, Google only purchases energy that is ‘additional to the grid.’ As explained by the brains behind the operation, “Imagine a power company built a wind farm many years ago…The power company figures it could sell Google the output of their wind farm; for their existing customers they would just make up the difference by buying some other source of energy, perhaps from the coal plant down the street.” By directly purchasing from producers with stated plans to expand, Google can ensure that renewable energy production will grow beyond their own needs. Indeed, the size and stability of their recent commitments will bring three new wind farms online in the coming 3 years.
Google is setting the standard for corporate renewable purchasing, and its competitors are already scurrying to match the tech giant’s transparency. But for the average consumer, expansions of this magnitude have a far greater impact. Not only does corporate purchasing drive down the price of renewable energy, it also shifts the dirtiest plants offline. Often run on gasoline or diesel, these peaker plants only operate when electricity usage reaches its maximum, such as in the heat of the summer. When large quantities of renewable energy becomes available, these plants can be removed from production, and even eventually driven out of business.
To learn more about the energy choices available for you, visit papowerswitch.com. Stay tuned as we dive deeper into mysteries of the grid, and nerd out on all things electric. Yes, it will be awesome.