Corporate decision makers face an increasingly complex landscape when it comes to sustainable energy procurement. They must decide how to realize more comprehensive sustainability goals. At the Ascend Summit 2023, Glen Davis, President of Agile Energy Advisors, moderated a panel that focused on conditions and directions for power purchases and corporate clean energy. Panelists included Chris Taylor, CEO of GridStor; Amanda Peterson Corio, Global Head of Data CenterEnergy at Google; and Vibhu Kaushik, Senior Vice President and Global Head of Energy, Utilities, and Storage at Prologis.

Key Takeaways

• Significant future load growth will require companies to take diverse approaches to meeting renewable energy goals.
• Corporate sustainability goals will evolve from annual net-zero targets to round-the-clock, 24/7 green goals, to perhaps even more granular, marginal carbon metrics at the nodal level.
• Positive outcomes occur when industry leaders align approaches to meeting sustainability goals; current alignment exists with regard to the importance of 24/7 decarbonization and storage.
• Corporations must improve effectively communicating complex energy procurement decisions to stakeholders who are not as well versed in the nuances and intricacies of this sector.

Transitioning to 24/7 Clean Energy in an Era of Significant Load Growth

As panelists addressed future sustainability outlooks for their respective companies, Mr. Kaushik explained that Prologis expects significant load growth throughout their value chain, potentially quadrupling on a kilowatt-hour per square foot of warehouse space per year (kWh/sq-ft/year) metric in the next decade. This projection assumes only 30% adoption of electrification technologies for logistics essentials such as forklifts and HVAC; additional load growth becomes possible with greater adoption levels. He noted that, in some cases, Prologis 'oversizes' renewable procurements and rooftop solar installations to account for this future growth and to help meet sustainability goals in communities surrounding its real estate portfolio.

Ms. Corio highlighted how, despite high data center energy consumption (already at 20 TWh annually and growing), Google achieved a goal of matching energy use with 100% renewable energy purchases in 2017. The company now works toward accomplishing the more challenging task of running on 24/7 green energy, a goal Google has set to achieve by 2030. To meet this goal, Google mainly procures clean energy through corporate PPAs and investments in new technology.

Corporate Clean Energy Procurement Challenges

Ms. Corio described some of the challenges that larger players like Google face when attempting to integrate new, large loads (such as a new data center) onto the grid, likening that process to delays faced by generators stuck in an interconnection queue bottleneck. To achieve their 24/7 clean energy by 2030 goal, Google targets the hard-to-decarbonize hours of the day. Ms. Corio argued for a more streamlined procurement process that fully captures the value of tax equity.

Mr. Kaushik noted the complexities of international procurement for a multinational company like Prologis, which has warehouses all over the world. He also highlighted the importance of standardized metering to understand and track energy consumption patterns on a consistent and granular basis and detailed the current development of his company's own carbon and energy data tracking system. Mr. Taylor summarized corporate sentiment by observing that good outcomes occur when industry leaders align their approaches to meeting sustainability goals, and that industry leaders appear to be aligning around the importance of 24/7 decarbonization and storage in meeting such goals. He added that corporates may be a little more agile – having more“degrees of freedom” in the form of a broader diversity of options for procuring power to meet their goals – and can therefore move faster. In contrast, utilities may move slower in the market, but can more fully realize the value streams of resources like storage assets that can provide other benefits, such as ancillary services, in addition to energy.

Making the Case for Sustainability Benefits to Customers

Corporates and utilities alike have realized that customers must be a part of decarbonization efforts, collaborating to enable the clean energy transition. However, the rationale for sustainability initiatives can be trickier to convey to non-technical or non-energy stakeholders. From Google’s perspective, Ms. Corio outlined an economic argument, in which these sorts of procurements serve as a physical hedge to the type of energy market volatility seen in recent years due to various macroeconomic factors. Mr. Kaushik asserted that Prologis sustainability goals have business benefits because actions taken to meet these goals can in turn help meet customers’ emissions goals, especially Scope 3 emissions associated with value chains. He also cited the added benefit of renewable energy credit (REC) value streams conferred to customers from rooftop renewables installations on Prologis properties. Mr. Taylor observed that companies must improve in terms of effectively communicating complex energy procurement decisions to stakeholders who are not as well versed in the nuances and intricacies of this sector.

Storage will Play a Significant Role

Panelists offered a variety of perspectives on storage's ability to offset fossil-fueled electricity generation in specific hours where other renewables may not be able to. Mr. Taylor emphasized the need for a well-established metric like an REC to properly ascribe and quantify such benefits to a storage asset. Ms. Corio explained that Google has actually piloted such a concept (Time-based Energy Attribute Certificates, or T-EACs). Mr. Kaushik believes that storage will play a significant role in helping to meet sustainability goals, regardless of whether environmental attributes for storage are developed and considered.

In the end, Ascend Summit panelists outlined a vision of a decentralized and sustainable future where co-located energy resources and load couple with sufficient storage options to meet 24/7 decarbonization goals.

Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy supply. The company’s offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.