The commercial and industrial (C&I) sector started announcing a new round of clean energy procurements at the start of 2020 after a banner 2019 of renewable energy buying. That initial momentum has been slowed by the events of the past few months.
But while some deals are getting delayed due to the economic downturn caused by the novel coronavirus, industry stakeholders anticipate continued C&I activity in renewable energy this year due to long-term demand.
The Renewable Energy Buyers Alliance (REBA) sees a shift in the short term, as new projects announced in 2020 dip below the quarterly results of 2019.
Corporate renewable deals announced in the U.S.
Year |
Q1 | Q2 |
|---|---|---|
| 2018 | 1.58 GW | 1.23 GW |
| 2019 | 0.99 GW | 2.8 GW |
| 2020 | 0.53 GW | 1.24 GW |
SOURCE: REBA's State of the Market
Despite these changes, 70% of REBA's members said they are not changing their clean energy goals and strategies due to COVID-19.
Some 6% of REBA members are accelerating their clean energy goals and strategies, seeing "opportunities against the crisis," Bryn Baker, REBA director of policy innovation, told Utility Dive. The remaining 24% are slowing down activity to pause and assess, although their long-term sustainability goals remain in place.
While REBA could not disclose the identities of members that are ramping up their renewables plans during this period, another recent analysis points to major continued growth in renewable purchasingfor data centers.
Adding a large-scale data center with renewable energy commitments can be a driver for renewable energy as well as for the local economy, a case study published in May shows.
The Institute for Energy Economics and Financial Analysis (IEEFA) calculated the local economic benefits of Facebook's new data center construction in Los Lunas, New Mexico, announced in February 2019, including increases in businesses and development activity as a byproduct.
The buildout of the data center vastly expanded the town's gross receipts tax revenue, from $11.8 million in 2015-16, prior to beginning the work on the data center, to $22 million in the 2019-20 fiscal year.
Facebook signed commitments to add more than 396 MW of new wind and solar resources in New Mexico, to support the data center, driving the state's largest investor-owned utility, the Public Service Company of New Mexico (PNM), to add more renewables.
Of PNM's 1,064 MW of approved solar, wind and geothermal capacity expected by the end of 2021, 37% represents renewables being added to serve Facebook's data center.
Data center use increases with COVID-19
"Data center growth has been booming for years," Jason Tundermann, business development vice president at LevelTen, told Utility Dive, adding that the trend is expected to continue post-COVID-19.
Interest in renewable energy-powered data centers has "firmed up slightly since January," Aaron Binkley, senior director of sustainability at Digital Realty, told Utility Dive. The company invests in carrier-neutral data centers and provides services to a variety of customers, including IBM and AT&T.
"Lots of our customers have ... interest in renewable energy, we don't expect that demand to go away any time soon," Binkley said.
Digital Realty announced at the end of April that 13 of its data centers in the Greater Dallas region will be supplied with 260,000 MWh of wind energy through a 7.5 year contract. The transaction was consistent with its energy supply strategy for Texas, where wind energy is available at low prices.
Digital Realty started sourcing for renewables around the world several years ago, making its first solicitation in 2015. "On an annual basis since then, we've expanded our renewable capacity," Binkley said.
Data center growth is in the news even during a pandemic because more businesses are relying on data centers as services transition online, making Digital Realty "well-positioned in that regard" during an anticipated economic downturn, Binkley said.
"Really stable businesses can keep going" with renewable purchases during the current economic crisis, REBA's Baker said. However, some members in the retail, healthcare and hospitality sector have had to "hit the pause button."
"A number of deals were ready to go and companies chose not to go ahead with them at this time," to focus their corporate messaging on helping employees, Baker said. But even among those industries, some continue to make progress on their goals.
Other groups tracking C&I renewable purchases are building a pipeline of interest in wind and solar purchasing, including data centers.
According to LevelTen, a digital platform for procuring renewable energy, there continues to be active interest in renewables purchases from the industrial, construction and home goods sectors, as well as other large-scale buyers in Europe and North America, despite COVID-19.
"We also are talking with a number of buyers who have had to take a step back," Tundermann said. "They're having to trade roles and go through furlough, they're putting out fires that they hadn't even thought of as being possibilities three months ago."
