Walmart’s aspirational goal to be supplied by 100% renewable energy – and to drive the production or procurement of 7 billion kWh of renewable energy globally while doubling the number of on-site solar projects in the U.S. by 2020 – just plain makes business sense. Between Walmart’s 2020 commitments to renewables and energy efficiency, the company could avoid up to $1 billion a year in energy costs.
Walmart’s Mountain View, California store is a perfect example of Walmart’s commitment to on-site solar energy, with 14.5% of the facility’s energy coming from a rooftop solar system installed by SolarCity. However, this facility also demonstrates the challenges in procuring a 100% renewable energy. Available roof-space alone for a solar system is not enough to power the entire facility with renewable energy. It’s just further proof that more options for sourcing renewable energy are needed.
This means that in order to reach 100% renewable energy, Walmart needs to complement its onsite efforts with significant purchases from other sources such as third party suppliers and their local utility.
Why is it so hard to get to 100%? The barriers are beyond Walmart. Two of the biggest challenges are market structures that prevent companies from directly contracting renewable energy and the fact that electric utilities have no incentive or directive to offer customers such as Walmart renewable energy above and beyond their current grid mix and/or the state renewable portfolio standard.
Walmart and 11 other major companies developed the Corporate Renewable Energy Buyer's Principles that outline how renewable energy providers and utilities can help meet their growing corporate demand for renewable energy.
Primarily, the Buyers’ Principles seek greater opportunities to work with utilities and regulators to expand renewable energy choices. Walmart – and other U.S. corporations – recognize that utilities are experts in providing their customers with access to least-cost energy resources. With this expertise, utilities can provide companies with the low-cost renewable energy they need to reach their sustainability goals.
At the same time, it’s important to increase access to third-party financing vehicles (e.g. PPAs) and standardize contracting processes so it’s simpler for companies to get what they need. At the end of the day, it’s about increasing the options and flexibility companies have to green their energy inputs, just as they are doing with other commodities.
Walmart is doing its part – committing publically and financially – to be supplied by renewable energy, but achieving 100% renewable energy will require overcoming obstacles and catalyzing new opportunities. And that means utilities and other suppliers have an opportunity to step up to serve a multi-million megawatt hour demand for renewable energy. That’s a market opportunity ripe for the picking.
Foundation has financially supported WRI's and WWF’s work on corporate
procurement of renewable energy and Walmart
is also a member of WRI's
Corporate Consultative Group.
Co-authors: Joshua Ryor of World Resources Institute (WRI), and Bryn Baker of World Wildlife Fund (WWF)