Businesses increasingly demanding renewable energy to cut costs

08/10/2012

New Corporate Renewable Energy Index report finds growing number of companies buying 100 per cent of their energy from renewables.

New Corporate Renewable Energy Index report finds growing number of companies buying 100 per cent of their energy from renewables.

A growing group of green businesses are choosing to source all of their energy from renewables, rather than just making a token purchase, according to a new report by Bloomberg New Energy Finance (BNEF) and Vestas.

Launched today, the 2012 Corporate Renewable Energy Index (CREX) ranked over 300 companies globally according to their voluntary renewable energy procurement, as well as how and why they do it.

The report found that CREX companies tend to fall into two extremes, with an emerging group of companies choosing to buy 100 per cent of their energy from renewable sources.

Previous CREX reports found most respondents buy a small amount of renewable energy, either by installing on-site generation such as wind turbines, or purchasing Renewable Energy Certificates (RECs).

In this year's report nearly one third of respondents said they used less than five per cent renewable energy – but by contrast, 35 CREX companies said they used 100 per cent renewable energy, mostly through RECs, to cover all their power usage.

Consumer-facing companies in the financial, telecoms and services sectors used the most green energy – a trend the report said was driven by a desire to communicate a commitment to the environment.

High-energy-use sectors such as paper and aluminium production also purchased greater amounts of renewables in order to save costs. Many of these companies made a direct investment in on-site generation, such as wind turbines or biomass boilers, to cover their energy use.

Hydroelectric power was the most popular form of on-site renewable energy – at 47 per cent of the total share – followed by wind, at 29 per cent. Biomass and waste-to-energy accounted for a combined 23 per cent total share.

According to previous Bloomberg figures, global investment in new renewable capacity outpaced that of fossil fuel generation in 2011, with $257bn invested in renewables compared with $223bn for additional fossil fuel generation.

The CREX report predicted companies will increasingly choose to buy renewable energy, but the pace of growth will depend on political and regulatory support.

Data compiled for CREX over the past three years found that renewable electricity procurement as a percentage of the global total electricity mix increased from 14 per cent in 2009 to 16 per cent in 2011.

"Companies are increasingly shifting the focus of their sustainability strategy from energy efficiency to renewable energy," said the report.

"However, there are CREX companies in all the key countries calling for an expansion in regulatory support for renewable energy, through mechanisms such as liberalising power markets, supporting incentive schemes or taxes on carbon dioxide emissions.

"Therefore governments and policymakers have an important role to play in the growth of this market."

By K.A

Businesses increasingly demanding renewable energy to cut costs

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