Big companies seek new paths to deep grid decarbonization

GM, Meta, Walmart and other big clean-energy buyers launch new effort to look at transmission, virtual power plants and other tools beyond clean-energy contracts.
By Jeff St. John

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A large complex of elongated industrial buildings next to a large solar array in a vast desert landscape under a blue sky
Meta’s data center in Los Lunas, New Mexico is partially powered by this nearby solar farm. (Meta)

Corporations have become the biggest buyer of the electricity from new clean-energy installations in the U.S., and they are expected to spend hundreds of billions of dollars more on low-carbon energy in the decade to come. That enormous purchasing power means they play an outsize role in helping to decarbonize the grid.

But corporations could be doing a lot more to help get the U.S. grid to 100 percent carbon-free electricity.

To reach zero carbon, the grid will need lots of new transmission to connect wind and solar farms at hitherto unimagined scales. It will require batteries and other forms of energy storage to save the power that’s being generated for use when the grid is in short supply. And factories, data centers, warehouses and other big power users will need to use electricity more flexibly to match the ups and downs of renewable energy generation — or even provide an injection of their own stored clean power to help the grid when necessary.

The Zero Emissions, Reliability Optimized Grid (ZEROgrid) Initiative aims to expand the corporate clean energy playbook to address these challenges. Launched on Tuesday, the collaboration between nonprofit think tank RMI and companies including Akamai Technologies, General Motors, Meta, Prologis, Salesforce and Walmart aspires to build a comprehensive, collaborative new framework to accelerate the transition to a reliable and affordable zero-emissions electric grid.”

That’s a big and sprawling goal, but it’s one that companies can’t afford to ignore, said Mark Dyson, managing director of RMI’s Carbon-Free Electricity Program. (Canary Media is an independent affiliate of RMI.)

Globally, corporations have procured nearly 150 gigawatts of clean energy over the past 15 years, with about half of that in the U.S. That investment has largely been driven by shareholder and consumer pressure, internal environmental, social and governance (ESG) targets, and, more recently, the increasingly attractive economics of clean power.

But we know it’s not fast enough, and it’s not the extent of what companies can and should be doing,” Dyson said. And with climate-change-induced extreme weather causing grid blackouts at increasing frequency and scale, corporate clean energy strategies are no longer just about checking a box on…sustainability reports — it’s about the ability to operate reliably on the grid,” he said.

ZEROgrid is the most recent of a host of corporate groups that RMI has helped create, Dyson noted. In 2015 the organization launched the Business Renewables Center, an entity that under its current iteration as the Clean Energy Buyers Association includes more than 350 corporate and nonprofit members that have played a role in nine-tenths of U.S. clean energy transactions since its founding.

These corporate clean-energy transactions have consisted almost entirely of companies signing big contracts for enough clean-energy credits to offset their annual energy use. Back when solar and wind power were scarce and expensive, these annual contracts could be counted on to increase the share of clean power being built compared to business as usual. But now that those renewables are the cheapest form of new electricity generation, and in some places are producing more power at their peak capacity than the grid can absorb, they have become an increasingly suspect means of putting corporate energy purchasing power to work.

That’s why big corporate clean-energy buyers such as Google, Microsoft and others have shifted to calculating the precise time and location that the clean energy they’re procuring was generated. That’s a vital step to ensuring that the clean power they’re paying for is actually serving the energy needs of their facilities and the grid at large.

The ZEROgrid Initiative sees these 24/7” clean-energy strategies as a core part of its mission, Dyson said. But they’re just a starting point for a much broader set of steps corporations can take, he added.

Going beyond the megawatt-hour to solve grid problems

One of the most important ways that corporations can wield their purchasing power is by helping to incentivize the buildout of transmission, which isn’t expanding fast enough to connect all the new clean energy projects that are planned or under construction. It’s very hard to build transmission in this country,” Dyson said. Corporates don’t have an established role to play in supporting transmission buildout — but they could.”

Clean-energy business groups like the Clean Energy Buyers Association and others have long lobbied for lawmakers and regulators to institute policies to expand the transmission grid, he noted. But the ZEROgrid Initiative could take those efforts further by investing directly in new transmission lines or committing themselves to buy a portion of the power that proposed lines will deliver, he said — something the federal government is also now focusing on.

Companies could also be investing in improving grid reliability, Dyson said. That could involve deploying grid-enhancing technologies” that allow the existing grid to transfer power more efficiently or virtual power plant” systems that combine distributed energy resources like solar panels and backup batteries with devices that can adjust when they use power, from electric vehicles to data center computing loads.

General Motors is one company that wants to work with utilities and grid operators to find ways for its expanding roster of EVs to serve these grid roles, said Rob Threlkeld, the automaker’s director of global energy strategy. GM has already secured enough renewables under the standard annual-accounting model to zero out the carbon footprint of its U.S. electricity consumption by mid-decade, he noted. It also helped found the Emissions First partnership, a group of companies that have pledged to move beyond annual clean-energy matching to more sophisticated methods of maximizing the carbon-reduction impact of their energy investments.

In 2021, GM started working with PJM, the country’s largest grid operator, to integrate carbon-emissions signals into how the company measures the impact of its renewable energy procurements, Threkeld noted. But its longer-term goal is to work with grid operators and utilities to enable linking up a bunch of EVs that can store wind and solar power, and then discharge them when the grid needs them the most,” or when their power can offset fossil-fueled generation, he said.

Meta, the company formerly known as Facebook and the second-largest corporate clean-energy buyer in the U.S. behind Amazon last year, is also an Emissions First founding member. Since 2020, it has procured enough renewable energy to meet 100 percent of its corporate electricity needs on an annual basis.

But with the GRIDzero partnership, the company is looking to develop a grid decarbonization strategy that goes beyond clean energy procurement, said Peter Freed, Meta’s energy strategy lead.

Measuring the carbon-emissions impact of Meta’s investments across the grid at large is one major focus, Freed said. One early effort is a pilot project with battery operator Broad Reach Power in Texas to assess the potential of batteries not just to earn money for helping to balance the grid but also to maximize the amount of clean energy reaching customers, he noted.

Meta is also interested in investing in energy resources that can reliably be counted on to be available when the broader grid is facing the most stress, he said. That’s something that utilities and grid operators across the world build into their planning but which most companies aren’t accounting for, with some rare exceptions like Google’s work with Fervo Energy to provide round-the-clock geothermal power to a Nevada data center.

Dyson agreed that corporate clean-energy buyers don’t have clear ways today to earn credit for how their contributions to a more reliable grid can be measured and credited. While ZEROgrid members haven’t determined just how they might partner with grid operators and utilities to align their clean-energy strategies with grid reliability needs, the group is working on a roadmap that lays that out and describes the barriers to action,” Dyson said, as well as seeking opportunities to leverage existing market products or to work on new regulatory schemes to measure contributions to reliability.”

According to Freed, many companies working in tandem with utilities and grid operators will drive change in ways that individual companies aren’t able to, even when they’re enormous power customers in their own right.

There are a lot of things companies can do beyond procurement,” he said. How do we broaden the suite of things that companies can work on to solve these big problems? We can come up with whatever good ideas we have, but working with folks who actually operate the grid is an important step.” 

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.