Renewable Energy

The Big Picture

The use of renewable energy, also called green energy or green power, can be a key strategy for a company looking to reduce greenhouse gas emissions. While fossil fuels, which come from coal, oil, and natural gases, contribute to global warming and cause significant damage to our air, soil, and water, green energy provides clean alternatives that cause little or no pollution at all.

From a long-term perspective, a national switch to renewable energy may eventually become imperative since fossil fuels will eventually run out or simply become so rare that they would be too expensive to retrieve. Green energy, however will never run out and is the ultimate key to a sustainable future.

A decision to go with renewable energy sources entails several factors, depending on the type of company and how that company uses energy. In many cases, electricity provided by a utility is the easiest to switch to renewable sources. Often times, utilities already provide green power options that they can extend to companies who are interested. Usually, this source of power is wind-generated, a form of renewable energy that has grown by 31% in the last year and is the most popular source available.

Companies that don’t purchase a significant part of their power from utilities have other options for using renewable energy, including solar power, geothermal power, biomass and hydropower. However, businesses should be aware that some power sources aren’t necessarily “green” just because they don’t produce greenhouse gas emissions. For example, nuclear power and large-scale hydroelectric generation don’t produce any emissions from power generation, but have other significant environmental drawbacks and thus are rarely recommended for companies seeking to improve their environmental performance.

Key Players

Several government agencies and nonprofit organizations exist to buy, offer information about, or provide green energy.

Collaborative efforts and partnerships. The U.S. Environmental Protection Agency runs the Green Power Partnership, a program for companies that commit to purchasing renewable energy. The World Resources Institute runs a similar collaborative program, the Green Power Market Development Group, made up of companies that have agreed to work together to develop green power markets. Among the goals of both organizations is spurring the development of new sources of renewable energy. For example, General Motors, a member of the Green Power Market Development Group, has announced plans to purchase 8 million kilowatt-hours of landfill gas per year, while fellow member Johnson & Johnson has equipped three buildings with solar panels generating a total of 300 kilowatts.

Organizations providing information. The federal Department of Energy (DoE) has several programs that help businesses with understanding and purchasing renewable energy. DoE’s National Renewable Energy Lab operates The Renewable Energy Analytic Studies Network (REASN), which provides extensive tools and information on green power. DoE’s Office of Energy Efficiency and Renewable Energy also provides in-depth information on different types of green power. The DoE Green Power Network provides resources on renewable energy markets.

Other government programs focus on specific types of green energy generation. EPA’s Landfill Methane Outreach Program, for example, helps companies develop green power using landfill gas.

Green tags and green energy certifiers. Several organizations exist to supply “green tags,” which are created by substituting renewable power for a non-renewable source (e.g., a coal-fired power plant), even if the renewable power is unavailable to the end user because it is created in another area of the country. One of the most prominent is the Bonneville Environmental Foundation, which offers green tags at www.greentagsusa.org/GreenTags/index.cfm. Green-e,a program of the Center for Resource Solutions, certifies green power sources from providers.

The Upside

• Straightforward reductions. Using renewable energy often leads to clear, quantifiable emissions reductions. For example, the emissions resulting from a kilowatt-hour of electricity used in the U.S. can be easily quantified based on available data, so the emissions savings from using renewable sources instead of fossil fuel-based sources are easily calculated.
  
• Price stability. Price stability. On average, $65 billion is spent each year to import fossil fuels from outside of the country. By making the transition over to renewable energy, that money will not only remain within our own economy and create more jobs for Americans, but it will also work to protect against price volatility. This means that while prices for natural gas and oil continue to fluctuate, our future energy costs will remain rather controllable since it is obtained from renewable sources within our own country.
  
• Complementary emissions reductions. Using renewable energy typically reduces not only greenhouse gas emissions, but also a variety of other air pollutants, including sulfur dioxide, nitrous oxides, and particulates. Switching to renewable sources and avoiding the production of these pollutants can avoid current and future regulatory costs.
  
• Strengthened National Security. A shift towards renewable energy decreases our dependency on foreign oil and therefore reduces the risk of outside sabotage to the U.S. energy supply.
  
• Power reliability. By using green power generated on-site, as through the use of installed solar panels, a company protects itself from disruptions in energy availability through the grid due to power outages. With the use of other diverse renewable sources, the area effected in the case of a black out would be rather limited if a grid connection were to fail, and the black out wouldn’t last nearly as long than if the energy came from a large power plant.
  
• Stakeholder approval. Using renewable energy is an approach to reducing emissions that is easily understood and appreciated by a variety of stakeholders. This is especially true because of the reduction or elimination of air pollutants in addition to greenhouse gases.

Reality Check

• Higher costs. In general, renewable sources tend to cost more than the use of fossil fuels, and even the cost of wind power is not consistent within itself as it varies from location to location. However, due to the constant rise and fluctuation of prices among fossil fuels, the differences will eventually dissipate over time.
  
• Upfront investments. Development of renewable generating capacity within a company, such as installation of solar panels, may require a significant up-front investment— the payback for which may not reveal itself in full until much farther down the line.
  
• Lack of public education. Green tags are not well understood by many stakeholders, and their benefits may be difficult to explain. Some stakeholders may continue to see green tags as a less beneficial option than direct purchase of renewable energy, not taking into account that such purchases are not possible in all areas.

Action Plan

The actions a company can take to implement renewable energy depend largely on where it is located, and the energy sources it currently uses.

• Determine whether green power is locally available. If much of a company’s energy comes from electricity purchased from a utility, then the easiest starting point may be determining if the utility offers green power. Many utilities offer power from wind sources or other green options. If this is the case, the purchase is simple and the main decision for the company is likelyfinancial. Because the renewable power may be a bit more expensive than conventional energy, the company must decide how much money to put into the green power purchase.
• Consider green tags. If the company is located in an area served by a utility that doesn’t offer a green power option, or if the company chooses not to use the utility option, then green tags are a possible alternative. Green tags use carbon offsets as renewable energy certificates to replace fossil fuel sources. They share in the benefits of green power by providing clean, secure and sustainable energy obtained through solar and wind sources throughout the country.
• Generate power on-site. For large companies, another option might be to create on-site power generating capacity, most commonly done by installing solar panels. Another option would be to use wind turbines, fuel cells, or other technologies.

  The Green Power Partnership also offers a step by step purchase process for companies who are ready to begin their investment.

Leads

• Green Power Market Development Group

is a project of the World Resources Institute and ten large corporations dedicated to increasing the use of renewable energy by corporations.

• Center for Resource Solutions runs several renewable energy programs including Green-e, which certifies renewable energy sources, and the Public Renewables Partnership, which helps public organizations integrate renewable energy into their operations.
• International Energy Agency has tools and resources for companies seeking renewable energy in other countries.
• Bonneville Environmental Foundation is a leader in developing, marketing, and selling green tags.

Bottom Line

For companies seeking to improve the impact their business has on the environment, it is best to start by reducing emissions and increasing energy efficiency. However, these simple efforts eventually reach a point of diminishing returns. If a company wants to reduce its emissions from energy use beyond gains achievable by efficiency improvements, then switching to renewable energy sources is the ideal option, thus providing long term benefits not only for the company itself, but for all of society.

— Updated October 2007 by Christina Syriani.