Guest Author
Dan Finn-Foley

Newsletter: Big Tech is coming for your carbon

Google, Facebook and other tech heavy-hitters are perfecting a bottom-up approach to large-scale decarbonization.
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We’ve invited Dan Finn-Foley to guest-author our newsletter today. He’s an expert on energy transition and storage and a principal consultant at PA Consulting. (Your friendly neighborhood newsletter author Julian Spector will be back next week!)

The corporate push toward decarbonization is old news. Corporate renewables initiative RE100 lists more than 300 entities that have committed to 100% decarbonization, including many of the largest corporations in the world. The trend has been particularly accelerated in the United States, where corporations have filled the vacuum left by the absence of federally backed climate goals. According to the BloombergNEF Corporate Energy Market Outlook, U.S. corporate renewable procurements grew from 1.5 gigawatts in 2014 to 16.3 gigawatts in 2019.

Amid this surge in corporate interest, a decarbonization arms race has emerged. No longer content with purchasing bargain-basement renewable energy credits far from operations, tech companies now aim to match their decarbonization efforts more accurately to their true consumption patterns.

After three years of matching its energy use with 100% renewables purchases, Google in 2020 announced its carbon-intelligent computing platform” and set the goal of time-matching consumption with 24/7 carbon-free energy, a dramatic scale-up in effectiveness and complexity.* Microsoft, which has a goal of being carbon-negative by 2030, has countered Google’s efforts with its own 100/100/0 initiative, matching 100% of consumption 100% of the time with zero-carbon purchases.

Facebook, meanwhile, has stretched its goals both outward and inward, committing to decarbonizing its supply chain in addition to its own direct operations — perhaps a shot across the bow at Amazon, which, with nearly 2 million active sellers on its platform, would find that task several orders of magnitude more difficult than a company whose products exist primarily as data.

TVA green investing program is a smash hit

It’s easy to talk a big game about decarbonization when policymakers have set ambitious clean energy targets — 17 states, along with Washington, D.C. and Puerto Rico, have committed to 100% clean electricity through legislation or executive order — but hurdles remain wherever corporations cannot rely on state-level mandates to carry them across the climate-action finish line.

Enter the Tennessee Valley Authority. The TVA — unique in the U.S. as a federally owned, multistate electric utility co-op that moonlights as an economic development engine for the Southeast’s Tennessee Valley region — has its own decarbonization goals, which are likely to grow stronger if Biden administration nominees to its board are approved.

Pair these goals with corporate mandates to co-locate renewables and local developers eager to do the work, and you have the TVA’s Green Invest program, which has quietly become a smash hit, attracting more than 2 GW of solar and $2.7 billion in new investment to the region. Its customers, including Facebook, General Motors, Google and even the city of Knoxville, are connected with developers through competitive bidding conducted by the TVA, securing up to 20-year contracts. Corporations decarbonize, jobs are created and the TVA moves toward its climate goals, all notably without direct state or federal clean energy standards.

The era of policy mandate exclusivity is over

Top-down policy has played a pivotal role in driving the clean energy transition, but as costs decline and corporations pick up the baton, its importance is fading. Nowhere is this clearer than in the Southeast, where absent any mandate or incentive, the Green Invest program is spurring some of the region’s first energy storage projects. Facebook and General Motors are joining forces for a 30 MW storage system, and Facebook is also partnering through the TVA for a second 50 MW system, an investment that broadcasts Facebook’s eagerness to press beyond green electrons.

There is no state-level clean energy mandate that these systems support, no hard megawatt storage target, no clean peak standard or bridge incentive designed to boost the storage industry. Instead, corporate goals, utility decarbonization initiatives, economic development priorities and plunging costs have naturally converged to preclude the need for a top-down approach.

What happens next is a bottom-up decarbonization that will fundamentally disrupt the energy transition and stretch investment beyond conventional borders. This new era will see both economic- and corporate-driven deployments snowball past early targets while regulators and policymakers sprint to keep up.

The Southeast shines a light on this new model of corporate climate action, which will spread and flourish across the United States and the globe. There is, however, a potential expiration date for this business model. If corporate efforts accelerate the grid’s transition toward clean energy, companies may find themselves fully decarbonized sooner than they had planned simply by paying their utility bill.

(Lead photo credit: Tennessee Valley Authority / Flickr)


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*Clarification: The original version of this newsletter incorrectly conflated the launch of Google’s carbon-intelligent computing platform with its commitment to 24/7 renewable energy procurement for its data centers and corporate campuses by 2030. The launch of the carbon-intelligent computing platform is related but separate, and Google has committed to procuring round-the-clock carbon-free energy for its data centers and corporate campuses by 2030.

Dan Finn-Foley is a principal consultant in PA Consulting’s energy and utilities practice. He studies the energy transition ecosystem, including the interaction of economics, policy and emerging tech.