Brewer Anheuser-Busch InBev sets global renewable electricity goal by 2025

World’s largest brewer Anheuser-Busch InBev SA – parent to brands including Budweiser, Corona, Rolling Rock, Michelob, and Stella Artois – has committed to sourcing its electricity entirely from renewable sources by 2025.  The move would make AB InBev the largest corporate direct purchaser of renewable electricity in the global consumer goods sector.

AB InBev makes 30% of the world’s beer, operating breweries in 50 countries. Collectively, these facilities consume 6 terawatt-hours of electricity a year, of which 7% is currently renewable-sourced.  According to a March 28 press release, changing to 100% renewable electricity will reduce the company's carbon footprint by 30%, an estimated reduction of about 2 million tons of carbon dioxide a year.

While many multinational companies “invest” in renewables by buying renewable energy credits or certificates known as "RECs", AB InBev’s plan involves no REC-buying. The company reportedly intends to obtain 75 to 85 percent of its electricity through direct power purchases under a power purchase agreement or similar commercial arrangement, with remaining 15 to 25 percent coming from on-site distributed generation installations at its facilities, like solar panels. The company has committed to producing the energy in the country in which it is to be consumed.

Sourcing renewable energy is relatively easier in some countries, like Mexico. AB InBev announced that its largest facility, a Grupo Modelo brewery, had signed contracts to get all its electricity from wind power, including 220 MW to be built by Iberdrola SA in Puebla. Those new wind projects alone, destined to supply the brewery, represent a 5% increase to Mexico's renewable energy capacity. But in other countries, most notably in Africa, a lack of markets and infrastructure to connect industrial consumers with renewable energy may prove challenging. Also worth noting is that the company's commitment relates to electricity, and not directly to fuels or heat required for beer production and distribution. 

Nevertheless, Anheuser-Busch InBev's commitment to sourcing 100% renewable electricity by 2025 across its global portfolio of facilities represents another data point in the trend of corporate direct investment in renewable energy.  Corporations including Apple, Google, and Amazon have made a variety of commitments relating to renewable electricity, citing benefits ranging from environmental sustainability to locking in power pricing.

Wind to power Microsoft's Texas data center

Microsoft has agreed to purchase energy produced by a Texas wind farm to power its data center in San Antonio.  The announcement, posted on the official blog of Microsoft's Sustainability Development Team, describes a 20-year power purchase agreement with RES Americas under which Microsoft will purchase all of the output of the 110 megawatt Keechi Wind project located about 280 miles north.

The power purchase agreement fits with Microsoft's stated commitment to carbon neutrality.  Since 2012, Microsoft has imposed an internal fee on the use of carbon-based forms of energy; Microsoft uses that fee to make investments in alternative or carbon-neutral energy, such as this power purchase agreement.

The Keechi project will be owned and operated by RES Americas, a subsidiary of British company RES Ltd.  RES Americas currently operates over 600 MW of renewable energy projects, and has a renewable energy construction portfolio that exceeds 6,500 MW and 64 projects, as well as 534 miles of transmission lines.  Its Keechi project is expected to cost $200 million, and will feature 55 turbines expected to produce 430,000 megawatt hours of energy per year.  (To put this figure in context, it could power up to 45,000 homes, or cover between 5 and 10 percent of Microsoft's total electricity consumption.)  Construction is expected to begin in 2014, with the project going operational by June 2015.

Microsoft is not alone in promoting its use of renewable or alternative energy to power its data centers.  In 2012 Google entered into an agreement to purchase the output of a wind farm in Oklahoma to power its Pryor data center.  Apple's new data center in Maiden, North Carolina is powered in part by a solar photovoltaic array and a biogas-fed fuel cell.  eBay has proposed siting a 6 megawatt natural gas-fired fuel cell at its Utah data center.  Whether the data center is powered by on-site distributed generation or buys power from a designated off-site renewable resource, the trend is toward promoting cleaner, greener computing through these arrangements.  These choices may help the companies with cost control and power reliability as well as public relations.

Will large consumers of electricity continue to invest in alternative or renewable electric generation?  If so, will they favor arms-length power purchase agreements with developers of remote projects, or will they rely more heavily on on-campus development of distributed generation?  Will this trend spread beyond the big names so far - Microsoft, Apple, Google, and eBay - to the point where smaller or less tech-oriented companies develop or do similar projects and deals?

  Googa 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

a 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

a 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

eBay OKed for wholesale electricity sales

As customer-sited electric generation becomes increasingly economic, major companies outside the energy sector are entering electricity markets.  Federal regulators this month granted eBay Inc.'s request for authorization to sell electricity at wholesale.  What does this mean?

U.S. wholesale electricity markets are generally regulated by the Federal Energy Regulatory Commission.  Most sellers in those markets are regulated as public utilities - but in recent years, the category of "utilities" has expanded beyond the traditional vertically-integrated utility serving retail customers with electricity.  The growth in this sector has come largely from end-users of electricity who have developed on-site generation to meet their needs - and to sell excess power into wholesale markets.  Recent big-name entries into the wholesale electricity market include Google Inc. and Wal-Mart Stores Inc. - and now eBay.

On September 5, 2013, the Commission granted eBay market-based rate authority.  This approval enables eBay to sell electric energy, capacity, and other products.  As described in the Commission's order, eBay plans to own and operate a 6 megawatt fuel cell generation facility located at its data center in South Jordan, Utah.  In a June 21 filing, eBay described plans to install five natural gas-fueled "Bloom Box" units at the data center to provide power to run the facility. 

eBay's plans bear some resemblance to the fuel cell system Apple developed at its data center in Maiden, North Carolina.  Data centers consume significant amounts of energy, both for processing and for cooling.  In many cases, on-site generation projects offer data centers a way to cut costs while improving their reliability and their environmental footprint.

Maximizing the cost-effectiveness of a distributed generation project requires it to be sized appropriately for the load to be served.  In some applications, there may be little to no excess power available for sale at wholesale to the grid, while other on-site generation projects may be capable of exporting significant amounts of energy to the grid.  With its market-based rate authorization in hand, eBay stands ready to enter the wholesale market with any excess power its Utah fuel cells produce.

Demand response, customer-provided grid support

This summer, the electric grid has largely weathered the increased demand for power during heat waves.  Grid operators have a variety of tools to ensure sufficient energy supply to meet peak demands.  In recent years, the smart-grid star in the grid's toolkit has been demand response: programs that allow customers to respond to signals about the scarcity of electricity by temporarily reducing their consumption from the grid.  This summer, customer-provided demand response has not only kept the lights on, but has also reduced society’s energy costs by reducing the need for the most expensive marginal peaking generation units.

Last March, the Federal Energy Regulatory Commission issued a landmark ruling that demand response should be compensated fairly.  In this ruling – Order No. 745 – FERC held that demand resources should be paid at market-based prices when two criteria are met: capability and cost-effectiveness.  When demand resources can displace the need for bringing additional generation online, and when doing so lowers our grid costs, Order No. 745 requires organized wholesale energy market operators to pay demand response resources for the full value they provide to the grid.

Now, some regional grid operators are proposing major changes to their demand response programs.  While some of these changes are designed to comply with Order No. 745, other changes seek to place new limits on who can participate in demand response.  For example, northeastern grid operator ISO New England has asked FERC to approve its proposal to eliminate the demand response value provided by consumers capable of using existing on-site generation to produce power to support the grid during times of crisis.

Decades of federal and state policy have supported investment in distributed generation projects, ranging from micro-combined heat and power (micro-CHP) and cogeneration to small and medium-sized wind, rooftop solar photovoltaic systems and even fuel cells.  Distributed generation has a strong history of policy support, but if FERC accepts ISO New England’s proposal to limit behind-the-meter generation’s ability to provide demand response, the region will need other resources to keep the lights on during times of peak demand – new generating units, transmission lines, and substations.

FERC has docketed ISO New England’s request as Docket No. ER11-4336-000, and is accepting public comment through 5:00 pm Eastern time on Friday, September 09, 2011.