State of Corporate Renewable Energy Procurement in the United States. David Gardiner and Associates July 11, 2018

Transcription

1 State of Corporate Renewable Energy Procurement in the United States David Gardiner and Associates July 11, 2018

2 Agenda Welcome and introductions Key findings from industry reports on renewable energy growth Discussion of increased corporate demand Moderated panel Audience Q&A Attendees can submit written questions through the GoToWebinar side panel.

3 Featuring Shawn Rumery, Panelist Director, Research, Solar Energy Industries Association Hannah Hunt, Panelist Deputy Director, Electricity Policy and Demand, American Wind Energy Association Jenna Goodward, Panelist Energy Technology Program Manager, Microsoft David Gardiner, Moderator President of David Gardiner and Associates

4 Growing Corporate Interest in Renewables Nearly half of the companies in the Fortune 500 and 63 percent of the Fortune 100 have set clean energy goals 138 companies have joined RE100, such as AB InBev, Apple, GM, IKEA, Microsoft, Morgan Stanley, Nike, Walmart, and Unilever 75 companies have signed onto the Corporate Renewable Energy Buyers Principles

5 Our Work on Large Customer Renewable Energy Procurement DGA is sharing the latest news about policy and market on Twitter Customer Revolution Monthly Newsletter

6 Rapid Increases in Corporate Procurement Commercial Solar Procurement After several flat years, corporate procurement ramps in 2016 and 2017 due to growth of off-site projects; ITC demand pull-in falling costs Demand pull-in from expiring incentives/rate changes Corporate procurement accounted for 30% of all solar capacity brought online in highest total since 2010 Current and future growth a product of expanded procurement options Physical and Virtual PPAs Green Tariffs Community Solar Commercial PACE 3,500 3,000 2,500 2,000 1,500 1, DG Non-Residential Source: GTM Research April 2, Offsite C&I Procurement 2018E 2019E

7 Changing Sources of On-Site Non-Residential Demand Traditional C&I losing share (but not MWs) to community solar; nonprofit/gov t Non-Residential Solar PV Customer Types Percent of total Non-Residential Installed Capacity 120% 100% At same time, 3rd party ownership share increasing for both public and private customers 80% 60% 40% Contrast to residential market 20% 0% Source: GTM Research April 2,

8 Top Corporate Users Target takes the top spot for the second consecutive year Walmart has ranked 1st or 2nd for corporate solar every year since the report debuted in 2012 GGP Inc. moves up 2 spots after extensive additions in 2016 and 2017 Amazon makes the list for the first time with surge of installations in 2017 Source: SEIA, Solar Means Business April 2, Top 25 Corporate Solar Users by Installed Capacity (Megawatts) 0 Target Walmart Prologis Apple Kohls Costco Wholesale General Growth... IKEA Macys Amazon Hartz Mountain Bed Bath & Beyond Intel FedEx Johnson & Johnson Campbell Soup Co. Walgreens Staples Verizon LOreal Berry Plastics Corporation McGraw Hill General Motors Albertsons U.S. Foods Unknown Pre

9 Off-Site Corporate Grows as Prices Fall, Despite Tariff U.S. Utility PV Forecast U.S. Utility Fixed-Tilt PV System Pricing H E ($/Wdc) 12.0 $ Source: GTM Research $ 1.19 $ 1.11 $ 1.16 $ 0.95 $ 1.00 $ 0.90 $ 0.80 $ 0.86 $ 0.82 $ 0.80 $ 0.60 $ 0.40 $ 0.20 $ April 2, $ 1.20 $/Wdc Utility PV Installations (GWdc) ~10% of development from offsite C&I, E 1 8E 20 Other Procurement 9E E E E 20 2 Offsite C&I Procurement 3E H2 2016E H H2 2017E 2018E Module EBOS Labor 2019E 2020E 2021E Inverter SBOS Design & Engineering 2022E

10 Competitiveness of Utility-Scale Solar Drives Demand Utility PV PPA Prices by Contract Execution Date $ PPA Price ($/MWh) $ $ $ $ Combined Cycle Gas $75.00 $50.00 $25.00 $ Source: GTM Research April 2, PPA Contract Execution Date

11 Challenges and Opportunities for Commercial Solar Challenges Solar Module Tariff will raise prices and slow growth from Declining state-level incentives Less attractive rate design Decline of Federal Investment Tax Credit Move from early adopters to mainstream commercial consumers in established markets; customer acquisition issues April 2, Opportunities Non-module hardware costs continue to decline; lots of room for non-hardware (soft) costs to decline Increased electrification (EVs), internet of things, pushing wide variety of companies to think differently about electricity Decreased costs of storage and solar opens up markets to companies looking for alternative resilience and cost saving options More large corporates opting for 100% renewables commitment As costs come down, tons of room for growth in nontraditional state markets

12 Featuring Shawn Rumery, Panelist Director, Research, Solar Energy Industries Association Hannah Hunt, Panelist Deputy Director, Electricity Policy and Demand, American Wind Energy Association Jenna Goodward, Panelist Energy Technology Program Manager, Microsoft David Gardiner, Moderator President of David Gardiner and Associates

13 C&I customers procured over 2,400 MW of wind power in 2017 U.S. Non-Utility Wind Power Purchases by Year Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2017 Additional 1,359 MW procured in 1Q 2018 Over 10,000 MW procured from Q 2018 C&I customers represent 95% of total non-utility procurement

14 Non-utility customers represent 40% of total wind capacity contracted via PPAs in 2017 PPA Capacity Signed over Time PPAs continue as preferred offtake method for C&I customers (83% of total) Increased diversity in procurement options Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2017 Green Tariffs Direct Investment Long-term REC purchases

15 More than 50 C&I customers have procured at least 10 MW of wind power Contracted Capacity by Customer 2,500 2,000 1,500 1, Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2017 M ar s x ui ni Eq on az rk Am -C la ng Ki m be rly t en s C or ni ar m al W w IK s EA O G en er al M ot ob or ile al TM m he C ow D ic &T AT ft so ic ro M Am az on G W eb Se rv i ce s ok bo ce Fa oo gl e En er gy 0

16 C&I activity focused on Texas, with increasing state diversity Capacity Contracted by State 4,000 3,500 Capacity (MW) 3,000 2,500 2,000 1,500 1, TX OK IA KS IL OH NE IN NM NC OR SD CA PA WA MI WV NY NH WI MA RI Through 2014 Source: AWEA Q1 2018

17 C&I activity concentrated in ERCOT and increasingly SPP followed by MISO and PJM Capacity Contracted by RTO/ISO 1,000 Capacity (MW) ERCOT SPP Through 2014 Source: AWEA MISO 2015 PJM 2016 N/A 2017 CAISO ISO-NE Q NYISO

18 Challenges and Opportunities Continued wind cost declines Transmission investment RTO/ISO engagement Federal and state policy drivers Utility partnerships Procurement opportunities for smaller buyers

19 Featuring Shawn Rumery, Panelist Director, Research, Solar Energy Industries Association Hannah Hunt, Panelist Deputy Director, Electricity Policy and Demand, American Wind Energy Association Jenna Goodward, Panelist Energy Technology Program Manager, Microsoft David Gardiner, Moderator President of David Gardiner and Associates

20 Powering the Cloud: Microsoft s Energy Journey Jenna Goodward Senior Program Manager Webinar -- State of Corporate Renewable Energy Procurement in the U.S.

21 2 Mil kilometers intra-datacenter fiber >1GW installed capacity 42 Azure regions 100+ datacenters Millions of servers

22 Commitment to sustainability 2012 Carbon neutral % energy use from 60% energy wind, solar & use from wind, hydropower solar & hydropower Long-term goal 100% energy use from wind, solar & hydropower

23 Leading an advanced energy economy that benefits everyone Generate clean energy Enable the next generation of energy technology Bring new solutions to market

24 Generate clean energy Enabling the transition towards a grid powered by carbon-free energy 20 Supporting solar energy in Virginia MW 37 Advancing wind power in Ireland MW 110 MW New wind power in Texas 175 Harnessing the wind in Illinois MW 180 Capturing clean energy in the Netherlands MW

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26 Next generation energy technology: Flow batteries As more renewables come onto the grid, use existing resources as backup power options Long term: Grid-interactive batteries store hours of energy vs. minutes

27 agder energi Smarter grid with Agder Energi in Norway

28 Questions? Please submit any written questions through the GoToWebinar panel on the right side of your screen, and we will answer as many as possible.

29 Panelist discussion Shawn Rumery, Panelist Director, Research, Solar Energy Industries Association Hannah Hunt, Panelist Deputy Director, Electricity Policy and Demand, American Wind Energy Association Jenna Goodward, Panelist Energy Technology Program Manager, Microsoft David Gardiner, Moderator President of David Gardiner and Associates

30 Thank You To learn more about DGA, visit dgardiner.com Additional questions?