Corporate sourcing in emerging renewable energy markets

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Corporate sourcing in emerging renewable energy markets

The number of companies setting renewable energy goals is increasing, and so is the number of those which join the RE100. This highlights the importance, and challenges, of corporate sourcing for renewable energy in countries where the electricity market is non-liberalized or is liberalizing. Multinationals are looking for market based solutions, for their operations and for their supply chains.

In this article we summarize three points for companies to pay attention to, especially for energy procurement in areas without an established market.

1. The importance of taking action:
Moving forward with what exists will help other solutions to develop.

Energy professionals need to encourage companies to take action and make use of already existing and available systems. Some ways to move forward can be making contractual agreements, using I-RECs and encouraging energy suppliers to work with I-RECs or existing tracking systems in that area.

There is not one “correct” way of becoming 100% renewable, especially for multinationals. The right action is to take action, even in countries with non-liberalized electricity markets, even in places where no one has tried it before.

Consumers don’t necessarily need to wait for national legislation to become established. Their demand sends signals to the market and that’s how they push national legislation into existence.

2. Reliable tracking and avoiding double counting:
Having the legal right to claim the renewable attributes of energy is necessary.

Regardless of the reasons or methods which a company buys renewable energy, they’re advised to report their carbon footprint and CSR/sustainability activities.

Reporting these is possible only when renewable energy fulfils the rules outlined in GHG Protocol Scope 2 Guidance. (See our summary of GHG Protocol Scope 2 in 19 languages) In other words, wherever renewables are sourced, be it in China, India or elsewhere, energy consumers need to make sure they can claim the renewable attributes. The best way to ensure this is by making use of a reliable tracking system.

We see reliable tracking systems for renewable energy in regions where consumers and the energy sector have a history of experience understanding each other’s needs. This allows consumer friendly ways of procuring renewable energy to be developed. Such cooperation can be achieved in other countries when consumers start demanding information and clarity. The operations of many multinational companies reach across many regions through their production facilities and supply chains. And their demand contributes to the development of legislative frameworks and reliable tracking.

3. Communication about sustainability:
Announcing it proudly inspires others.

Large energy consumers should be more vocal about their switch to renewables, not only to inform and educate their customers but also to inform and educate their peers and competitors.

Energy procurement managers should cooperate more with their communication departments to announce their purchase of renewable energy to the public. Communicating about it openly will also encourage more companies to come on board. Even large corporations often don’t engage their communication departments in their renewable energy purchases. There’s a lot that front runners can do to communicate.

“100% renewable electricity is becoming the new normal”, says Pedro Faria, Strategic Advisor from CDP. But the transition is not going as fast as it should. If companies using renewables communicate about it, it will demonstrate to others that it can be done.

Going beyond renewable energy and doing even Two people signing a corporate EKOenergy contractmore has become very easy. Choosing EKOenergy labelled renewable energy and using the EKOenergy logo is a way for companies to show their commitment. The EKOenergy ecolabel serves as an easily recognizable tool for sustainability communication. SAP, Groupe Rocher, VMware and many well known companies chose EKOenergy. To learn more about the additional benefits that EKOenergy brings along with ways to use the logo, see our sustainability criteria, EKOenergy Climate Fund projects or contact us at info@ekoenergy.org.

Merve Güngör, 15.01.2019

(Simultaneously published on LinkedIn)