Author: Brian Publicover, Solarplaza
“The idea was to change the narrative around what is best practice for corporate purchases of renewables,” says Sam Kimmins, head of RE100 at The Climate Group.
Participating companies are reaching their targets through different approaches. Some are generating electricity from factory rooftop PV arrays, while others are sourcing power from utility-scale generators. And many participating retailers are purchasing renewable-energy certificates, given that they tend to operate stores in shopping malls and work with third-party manufacturers.
Companies such as RE100 co-founder IKEA are also selling electricity from their own PV arrays back to local grid operators. But while some Asian countries even allow private electricity sales — notably, Japan recently liberalized its retail electricity market — in other jurisdictions, it can be difficult to simply sign a bilateral PPA with a local utility.
The idea was to change the narrative around what is best practice for corporate purchases of renewables,
“In Indonesia, it’s extremely challenging,” says Miroslav Dijakovic, director of business development for developer and EPC specialist Contained Energy. “It’s still a new market and we’re still exploring.”
And IKEA — which wants to produce as much energy as it consumes by the end of the decade, with renewables accounting for about 71% of its non-retail operations in 2016 — says that in some Asian countries, self-consumption of electricity is not an option.
“In some projects we are using the electricity produced for self-consumption,” explains Karol Gobczynski, climate and energy manager for IKEA Group, adding that the company’s renewable goals are not limited to its operations in Asia. “In some areas/markets we are obliged to sell the electricity to the grid, and are not allowed to use it on the premises.”
The Swedish furniture producer has installed solar panels on 11 of its stores in China, with a twelfth on the way. It has also built PV arrays at five of eight retail outlets in Japan and at one location in South Korea. The installations range in size from 100 kW to 1.5 MW, aside from a 5.5 MW array at an undisclosed distribution center. IKEA may also install solar at stores it plans to open in India, Gobczynski adds.
The relatively small size of the projects highlights a key challenge that companies face in using solar to meet their RE100 goals. For example, Swiss Re — which has not deployed PV at its offices in Singapore and Hong Kong — is looking at options such as virtual power purchase agreements to pool its loads.
“Asia still poses challenges for us,” says Lasse Wallquist, senior environmental management specialist for the reinsurance firm. “Immature renewable energy markets combined with our small distributed load — that is, many small offices consuming electricity from different grids and markets — makes it difficult to source reliable green power.”
Kevin Rabinovitch, global director of sustainability for Mars, agrees that the region is challenging. The US confectionery producer generally prefers to buy electricity from third-party producers, rather than operating its own assets. But the company— which expects to derive roughly 38% of its electricity from green sources in 2017 — has thus far struggled to procure large amounts of renewable electricity from off-site generators throughout Asia.
It operates PV arrays at roughly 15 locations throughout the world, ranging from about 100 kW to 150 kW, with the exception of a 2.1 MW array in the U.S. It has installed panels at four of its production facilities in India and one each in Thailand, Taiwan, Japan, South Korea and the Philippines. It has also deployed PV at six of its production facilities in China, including a 550 kW system installed at a factory north of Beijing.
However, off-site wind power makes up the lion’s share of its renewables uptake. Solar only accounts for about 1% of the total, which underscores the limitations of rooftop PV in its pursuit of its RE100 target, according to Rabinovitch.
The group does not have any preferred suppliers or developers, as it tends to take a “hands off” approach to the construction of its on-site PV assets. And it has yet to sell electricity back to the grid or source solar from off-site generators in Asia.
“We’ve been watching the China market very closely… we’re very hopeful that we’ll be able to start doing remote power purchases or dedicated renewable-sourcing arrangements,” Rabinovitch says, pointing to new policies he expects Beijing to unveil this summer with regard to transparently tracking renewable-electricity consumption.
What we’re looking for is countries where both the regulatory framework, as well as the market dynamics, are supportive of our goals.
Mars is primarily interested in renewables to the extent that they can reduce its greenhouse-gas emissions. Rabinovitch says Asia is “interesting” because it gets a bigger greenhouse-gas benefit there than it does in Europe, as emissions per unit of electricity are particularly high throughout the region. Mars can therefore “get more bang for (its) buck” for every megawatt-hour it generates in countries such as China or India. But policy remains an obstacle in many Asian jurisdictions.
“What we’re looking for is countries where both the regulatory framework, as well as the market dynamics, are supportive of our (goals),” says Rabinovitch.
Swedish clothing retailer H&M — which derived approximately 96% of its electricity from renewables in 2016 — sees its ability to shape energy policy as a critical element of its RE100 commitment.
“We have to stimulate the market,” says Pierre Börjesson, the company’s senior sustainability specialist. “H&M wants to support policy development.”
To that end, it is encouraging its manufacturing partners in Bangladesh to band together and approach solar installers about installing PV modules on their factory rooftops. It is also trying to use their joint efforts to create momentum for the introduction of new policies that will support renewables deployment in the South Asian nation.
Solar has huge potential throughout the world, including Asia, to continue that development and investment. We’re far from where we need to be.
The company — which sees renewables as just one element of its broader climate strategy, along with energy efficiency — has taken a multifaceted approach to reaching its RE100 goal. It generally does not own its own production assets, and tends to lease retail space in large shopping malls, so rooftop PV is not always the best option. But it sees numerous ways in which it can make its supply chain cleaner and more sustainable throughout the region.
“H&M is neutral to what kind of technology is used, as long as it’s sustainable renewable energy,” explains Börjesson. “Solar has huge potential throughout the world, including Asia, to continue that development and investment. We’re far from where we need to be.”