The EU has the opportunity to lead the world in a green economic recovery after COVID-19, says a group of more than 50 global companies today.
Europe’s biggest clean energy buyers are calling for a policy framework that will boost corporate renewable electricity sourcing across the continent. This will not only generate hundreds of thousands of jobs, ensuring a just and sustainable energy transition, but will help the EU to deliver on its goal to reach climate-neutrality by 2050.
European leaders will meet on 19 June to discuss a €750 billion (US$824 billion) economic recovery plan unveiled by the Commission at the end of May. Funded by borrowing on financial markets, the plan notes the Green Deal’s 2050 climate targets, but lacks detail as to how these will be achieved.
In response, more than 40 major corporate energy buyers (e.g. AB inBev, Nestlé, Swisscom) and suppliers (e.g. Enel, Orsted) have signed a letter to the EU and national governments, calling for the following measures:
- Stimulating additional investment by providing public credit guarantees or risk-sharing for at-risk renewable energy projects;
- Policies to support the faster roll-out of corporate renewable power purchase agreements (PPAs) – according to BloombergNEF, companies used PPAs to purchase six times as much renewable power in the Americas as in Europe last year;
- The prioritization of funding for electricity infrastructure such as transmission and interconnectors, smartening and digitalization of distribution networks and storage sites.
Of 24 national energy and climate plans submitted to date under the Clean Energy for All Europeans package, only two detail how they will deploy corporate renewable energy sourcing.
The letter was coordinated by the RE-Source platform, a multi-stakeholder alliance established by WBCSD, SolarPower Europe, WindEurope and RE100 to drive the uptake of PPAs, renewable energy investments and increase the number of corporates buying renewable power from 100 to 100,000. This Platform pools resources and coordinates activities to promote a better framework for corporate renewable energy sourcing at the EU and national level.
RE100, led by The Climate Group in partnership with CDP, now brings together more than 240 global companies committed to 100% renewable power globally – the vast majority by 2030. They have a greater electricity demand than that of Poland and the Czech Republic combined and offer a huge source of finance for clean energy.
Mariana Heinrich, Director, Energy, WBCSD, said, “Transitioning to affordable, net-zero carbon energy systems is essential for securing a sustainable recovery from COVID-19. Companies are playing a critical role in accelerating the energy transition: sourcing increasing volumes of renewable electricity to meet their power demands. We welcome the European Commission’s Recovery Plan at this critical time to spike investment in renewables and, together with companies, drive the transition to renewable power.”
Helen Clarkson, CEO, The Climate Group, said, “COVID-19 has presented unprecedented challenges, but some good can come of it if we seize the opportunity to drive emissions cuts, helping us to live better in the future. A key area is fast-tracking renewable energy use. With the right policy measures in place, businesses will channel billions of Euros of investment across the continent – slashing emissions and creating the new jobs that we need.”
Antoni Ballabriga, Global Head of Responsible Business, BBVA, one of the 40 RE100 members that signed on to the letter, said, "At BBVA as a RE100 committed bank, we are firmly convinced that corporate sourcing of renewables must be a key driver for Europe’s green economic recovery. The banking industry is ready to provide the financial solutions to promote this change at scale together with the concrete actions to take under the umbrella of the Next Generation EU plan proposed by the European Commission."
Steven Tebbe, Managing Director, CDP Europe, said, “Public funds will now determine the future direction of the European economy. Achieving a climate-neutral continent will take a wholesale transformation of our economy, powered by renewables. Decarbonizing hard-to-abate sectors requires rapidly scaling up investments in new, breakthrough technologies, so policymakers must remove barriers and incentivize this investment to put in place a green recovery.”
Giles Dickson, CEO, WindEurope, said, “More and more companies are sourcing their electricity directly from wind farms. It makes sense for them – wind is cheap and scalable. Wind helps to shift their energy consumption away from fossil fuels to more efficient electricity. Governments need to facilitate all this: e.g. remove barriers to PPAs and stop taxing electricity more than gas. The huge corporate demand for renewables can really drive the energy transition – let’s unleash it.”
Aurélie Beauvais, interim CEO, SolarPower Europe, said, “Corporate renewable sourcing is a perfect fit for Europe’s post-COVID green recovery, providing businesses with significant amounts of reliable and low-cost solar and renewable energy, and unlocking private financing for new projects. While recent years have seen a substantial uptake in Europe, there is potential for far more. Now, it is essential to simplify corporate sourcing by removing regulatory, financial and administrative barriers. The solar industry is ready to develop concrete proposals to contribute to Europe’s ambitious and necessary climate-neutrality goal.”
- Today’s letter was coordinated by the RE-Source Platform – a European alliance of stakeholders representing corporate demand and supply sides of the market. Partners include RE100 (The Climate Group and CDP), Wind Europe, Solar Power Europe, and WBCSD.
- In April, the International Energy Agency found that renewable energy had so far been the most resilient energy source to COVID-19.
- According to Bloomberg New Energy Finance (BNEF), businesses bought a record amount of clean energy through PPAs in 2019, up by more than 40% on the previous year. Most of this was purchased in the US.
- The 40 RE100 member companies signed up to today’s letter represent over 4.7 TWh/yr of annual demand for renewable electricity in EU member states.
- BNEF estimates that RE100 members alone are set to stimulate global investment in renewables worth €90 billion over the next ten years. With over 40% of RE100 members headquartered in Europe, Member States should see a significant proportion of this investment. There are more than 400 European companies in Forbes Global 2000, an annual ranking of the top 2,000 public companies in the world by Forbes magazine. Many of these have yet to engage fully with the renewables market – demonstrating even greater potential.
- Governments elsewhere around the world are recognising the potential of corporate sourcing of renewables. The growing demand for renewables from RE100 companies was recently cited in Japan’s COVID-19 Economic Stimulus Package, in which €885 million (US$1 billion) was set aside to support corporate PPAs for onsite renewables.
- Today’s letter is the latest in a line of calls to action to governments from the private sector to governments to deliver a green recovery once the worst of the COVID-19 crisis is over.