PARIS and BRUSSELS, December 8, 2015 /PRNewswire/ --
Hundreds of companies are turning to wind energy as a business imperative because it makes good financial sense
As COP21 negotiations progress, global multinationals are playing a key role in achieving climate targets and they are using wind power to reach their goals
As COP21 climate change negotiations progress in Paris, leaders of some of the world's leading blue-chip companies have spoken out about why they are taking the lead in making significant investments in renewable energy, wind in particular. Companies such as Aveda, Google, IKEA, Lego, SAP, Unilever and more are leading from the front in making long-term investments in wind energy.
Why wind? Onshore wind is the cheapest form of new power generation globally. With the cost of wind power decreasing, many new investors have been attracted to the sector. This goes beyond utilities and includes global business and blue chip companies that are not traditional energy companies. Institutional investments in renewables in the EU alone leapt from €300m in 2004 to €6bn in 2015.
Business leaders say that wind makes good business sense and are making substantial, long-term investments in the energy. More and more major global companies are turning to wind as their primary renewable energy source as they move - or already have become - 100% renewable or carbon-neutral. SolutionWind, a global coalition of wind energy associations, is leading a consortium of global business leaders investing in wind. The campaign is gaining momentum and aims to recruit at least 50 multinationals by December 2016.
Thanks to wind energy, multinational software giant SAP has increased its use of renewable energy from 43% in 2013 to 100% in 2014. "SAP is committed to buying from renewable sources, and we mainly focus on wind energy" said Bill McDermott, CEO of SAP.
Explaining why Google is making significant investments in wind energy, Joseph Kava, Global Vice President for Google, said: "Wind PPA's [Purchase Power Agreements] give us long-term visibility into our pricing and is also great for business predictability in the future".
Renewable energy - mostly wind - powers 35% of Google's data centres. Kava observes that many other technology and traditional companies are following suit: "I believe we're starting to see industry in general realize that this is good business".
IKEA has invested €500m directly in wind power. By producing its own renewable energy IKEA is able to reduce costs and protect itself against fluctuating energy prices.
Even toymaker LEGO has invested about $456 million to construct an off-shore wind farm in the German North Sea.
"Wind energy is clean, safe, easy to install - and it's free," says Jeff Colruyt, CEO of the Colruyt Group supermarket chain. The multinational group has invested substantially in wind energy to power its operations.
The investment case for wind energy rests on three main pillars: a mature technology with a successful track-record of introducing technology evolutions, a predictable revenue stream based on regulated tariffs and prudent wind forecasts, and the increasing economic competitiveness of wind power.
"Wind power constitutes a competitive source of electricity," says Jean-Laurent Bonnafé, CEO of BNP Paribas. The bank recently announced that it will more than double the financing resources allocated to the renewable energy sector, from €6.9bn in 2014 to €15bn in 2020.
The main reasons global corporations say they are investing in wind energy are:
- It allows companies to own energy production and thereby successfully predict their energy supply;
- It reduces companies' exposure to the cost volatility of hydrocarbons and affords them long-term pricing predictability;
- It allows companies to use their purchasing power to drive a major change in business models of energy use. Doing this early gives them a longer-term competitive advantage;
- It drives down long-term business energy costs: the cost-effectiveness of the market is beneficial to growth, and investing in wind helps increase demand and thus the competitiveness of the market, which will further drive down long-term energy costs;
- It allows companies to respond to customer and societal demand: Lego, for example, understands that investing in renewables support a better future for its young customers and therefore also benefits its business.
The scalability of wind energy has helped it emerge as a viable alternative to fossil fuel. Wind energy's share of renewable electricity generation has more than doubled in the previous decade achieving more than one quarter (27.4%) of all renewable generation in 2013. This trend is set to continue - the European Commission expects wind to represent at least 43-45% of all renewable energy produced by 2030.
"This is happening. We're not turning back," said US President Barack Obama during COP21 when talking about setting carbon reduction targets and adopting clean energy.
SolutionWind allows CEOs and senior executives of leading global multinational blue-chip corporations such as AVEDA, BNP Paribas, Google, Lego, SAP, Unilever and others to explain why they are ahead of the curve in making substantial investments in wind energy. SolutionWind makes the compelling business case for wind as told not by energy companies but by the businesses themselves that are investing in wind energy. The SolutionWind campaign is organised and run by an international consortium of wind energy associations spanning the globe.