100% Clean and Profit Maximizing

 

apple headquarters

Apple’s headquarter running on renewables. Photo c/o Forbes.com

 

Tech giants Apple and Google are now 100% powered by renewable energy.

Google hit the goal early this April after confirming that the firm’s RE purchases exceeded the amount of energy the company used for operations worldwide in 2017. “For every kilowatt-hour of electricity we consumed, we purchased a kilowatt-hour of renewable energy from a wind or solar farm that was built specifically for Google,” Google Senior Vice President Urs Hölzle proudly announced.

Google is the largest corporate buyer of RE worldwide. Its vow of going 100% renewables started as early as 2010. By 2015, the tech firm was able to source 44 percent of its power needs from renewables.

Apple is not far behind. Less than two weeks after Google’s announcement, the iPhone maker proudly told the world that its global facilities spread across 43 countries are now running on 100% renewable energy. Apple has been rapidly increasing its use of RE in the last few years as it started sourcing 16% from green energy in 2010 until reaching 96% in 2016. Its data centers have been running 100% on RE since 2014.

“We want to put new, clean power on the grid so that we’re not sucking up all the clean energy that’s there,” said Apple VP of environment, policy, and social initiatives Lisa Jackson said in an interview.

Google and Apple are not the only large global companies opting to go for clean energy. Some 130 big brands like General Motors, Wal-Mart, Nike, and Ikea, just to name a few have vowed to use 100% renewable energy under the RE100 initiative.

These big brands’ choice of sourcing their power needs from RE is not surprising. After all, as our teachers in economics taught us, all firms are profit maximizing. It does indeed make business sense to choose renewable energy.

Perhaps, our regulators and even some of the local industry players should take notice of how and why big global firms are betting on renewable energy. As I have been saying for some time now, fossil-fuel powered plants are not exactly the least cost.

These global firms choose to go renewables as part of their commitment to save the planet and also to save money. These companies are reducing their financial risk of having to pay more for their power bills in the future by reducing if not eliminating their dependence on traditional sources of power. This is the same observation of Bloomberg New Energy Finance Analyst, Kyle Harrison when he said: “It gives them stability into what they’re paying for their energy prices, but it also gives them the potential to save money in the longer term.”

Many of the global brands’ management understand the risk of relying heavily on traditional sources of power knowing that commodity prices are unpredictable. These big brands do not want to be vulnerable to commodity price surges, so they diversify their energy mix to hedge against potential increases in world prices. They know that the least cost is not about looking at the upfront costs alone, but rather, also computing the price they will need to pay in the future for the costly consequences of factors beyond their control such depletion of fossil fuels, price spikes, and foreign exchange fluctuation, to name a few.

Plus, of course, the falling cost of RE technology makes going 100% renewable more cost-effective. The price of solar photovoltaic systems alone have dropped by 73 percent since 2010 and will fall further by 2020 according to IRENA.

Surely, these global firms will be grateful to have made the shift to RE when they see their financials in the future. Going renewable makes business sense. And the Philippines could do well by following the footsteps of these global companies instead of sticking with traditional forms of energy.

References:

https://www.forbes.com/sites/energyinnovation/2017/01/26/clean-energy-is-at-the-core-of-american-strategic-interests/#1dc0d6225765

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