July 19th, 2016 by Aisha Abdelhamid
In search of low-cost, fixed-rate electricity, great wind energy deals are swaying Fortune 500 companies and other major players to throw their money “into the wind.”
Signing contracts for over 2,000 megawatts (MW) of electricity, big brands, high-tech companies, and other non-utility customers represented 52 percent of wind energy generating capacity in 2015.
An Emerging Class of High-Class Wind Customers
Representing big name brands, big box operations, and high-tech firms, corporate buyers include the Google Energy, Amazon Web Services, Salesforce, IKEA, Walmart, Dow Chemicals, Tide, and Downy. Washington, DC, and a growing list of US cities, as well as Cornell University, Oklahoma State University, and other academic institutions leaned into the wind, too.
According to the American Wind Energy Association (AWEA) 2015 U.S. Wind Industry Annual Market Report, this non-traditional but quickly emerging customer class contracted for the majority percentage of capacity through wind power purchase agreements (PPA) for the first time. Investing in either PPAs or direct ownership, a total of 70 organizations made up this emerging class of high-class customers.
Helping customers purchase renewable energy, Altenex is a popular third-party buyer’s agent. Managing Partner Charles Esdaile notes, “Today’s leading companies understand that a long-term purchase of wind energy can help them lower costs and improve the environmental performance of their operations.” He continues, “and those that have not already executed deals are working aggressively to identify and understand their purchasing options.”
“One of the Most Attractive Markets in the World”
The 2016 Sustainable Energy in America Factbook offers logical answers for the rising trend of corporate investment in wind energy. Released by the Business Council for Sustainable Energy (BCSE) and Bloomberg New Energy Finance (BNEF), the Sustainable Energy Factbook states that US electricity rates have remained 5.5 percent lower than 2009 rates. It also notes that the US hosts “one of the most attractive markets in the world for companies whose operations entail significant energy-related costs.”
“At 7.1 cents per kilowatt-hour (kWh),” reports the Sustainable Energy Factbook, “the retail price of electricity for the industrial sector in the U.S. is lower than that in other major economies, such as Germany, China, and India.”
Last year’s bipartisan vote for a multi-year extension of the federal Production Tax Credit (PTC) is likewise encouraging strong corporate interest in wind power. Promoting long-term stability in the US wind industry, the PTC has bolstered the US economy for over ten years with over $128 billion in private investment.
The US Leads the World in Wind Energy Production
The Sustainable Energy Factbook squares with recent data by the Global Wind Energy Council (GWEC) and the US Energy Information Administration (EIA), confirming that the US now leads the world in wind energy production.
In 2015, the GWEC data indicate that US wind energy produced more than 190 million megawatt-hours (MWh), equivalent to powering around 17.5 million average US homes. Although China has around twice as much installed wind energy capacity as the US, it placed second in production, at 185.1 million MWh. Germany placed third, at 84.6 MWh.
The US is well on target to supply 20 percent of its electricity from the wind by 2030. In Iowa, wind power supplied over 31 percent of in-state electricity last year, closely followed by Kansas and South Dakota, each supplying over 20 percent.
AWEA CEO Tom Kiernan notes additional, compelling reasons why US wind power is number one across the globe: “The US is blessed with world-class wind resources. Now more than ever, low-cost, stably-priced, zero-emission wind energy is keeping our air clean and cutting costs for consumers.” He explains, “We’re tapping into this homegrown resource more than ever thanks to American innovation and U.S. workers building some of the most productive wind turbines in the world.”
The Biggest, Cheapest, Fastest Way to Cut Carbon Pollution
While corporate and other non-utility investors represent the fastest rising customer class, wind energy investment is also high among traditional utility buyers. Forward-thinking policy makers recognize that wind energy is one of the biggest, cheapest, and fastest ways to cut carbon pollution.
Political power plays notwithstanding, carbon regulations like the EPA Clean Power Plan are ultimately inevitable, recognizably necessary, and easily achievable with the rising adoption of wind power production.
As AWEA notes, “one new wind turbine can avoid over 4,200 metric tons of carbon dioxide (CO2) annually, the equivalent of nearly 900 cars’ worth of emissions. By displacing the use of fossil fuels, these purchases of wind energy directly reduce air pollution emitted by the electric power sector.”
CEO Kiernan adds, “Made-in-the-USA wind power will help keep our economy competitive and our air clean for generations. Our wind energy will never run out.”
Great Wind Energy Deals are Easy to Say “Yes” to
Corporate customers don’t always invest in direct ownership when purchasing wind power. Although on-site or off-site turbines may be the right answer for some operations, it’s not the only answer. The more popular option continues to be the convenient purchase power agreement. Structured something like a fixed-rate mortgage for a term of 10-20 years, a wind PPA offers the buyer a fixed price for electricity produced from a wind farm owned and operated by a third party.
Not only securing low-cost, fixed-rate, clean electricity for visionary corporate players and city administrators, these investments also help offset environmental impacts, further boosting the buyer’s reputation and image.
Kiernan points out, “Every time Americans use the Internet or do laundry, it’s more likely that wind energy made it possible.” He adds, “Innovation has driven down the price, resulting in phenomenal growth in demand for wind energy from corporate buyers, in large part because it saves them money. Signing a long-term wind contract provides these buyers with a package of benefits—low-cost, fixed-price, clean energy—that’s easy to say ‘yes’ to.”
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