Navigant Research Blog

Big Business Buys into Big Wind

Jesse Broehl — May 23, 2014

Thirteen billion Snickers bars.  That’s how many chocolate treats can be produced annually from the wind power purchase agreement (PPA) that Snickers-maker Mars Inc. signed in late April that effectively underwrites a new 200 MW wind plant near Lamesa, Texas.

Mars thus joined a swelling chorus of big corporations that are investing in, and powering their businesses with, wind power.  Corporate purchases of renewable energy certificates (RECs) aren’t new.  But several tech-savvy firms are increasingly going beyond REC purchases and are opting for direct purchases of bulk wholesale renewable energy from individual wind plants and making equity investments in projects – effectively becoming new customers for wind plants beyond the traditional utility base.

Utilities have typically been the only customers that sign PPAs with wind plant developers and owners.  However, companies like Mars Inc., Google, Intel, Ikea, and Facebook (just to name a few) represent a new customer base for wind plant developers.  And these are not small, symbolic greenwashing pursuits.  These are real and substantial investments enabling the construction of significant new wind power plants.

Earth Day Deal

Google in particular has been on a wind buying spree.  Fittingly, on Earth Day, April 22, Google announced it had inked a deal with MidAmerican Energy to purchase 407 MW of wind power.  Unlike most utilities, which purchase wind power from independent power producers, the Iowa-based utility has strongly embraced wind by becoming a wind plant developer and owner itself.  With Google’s PPA in support, MidAmerican will build out its wind plant capacity by the end of 2015 and will sell the equivalent amount of power and bundled RECs to Google to partially power its data centers in Iowa.

This comes on the heels of Google signing PPAs totaling 101 MW in Sweden, 239.2 MW in Texas, 100.8 MW in Oklahoma, and 114 MW in Iowa, as well as the equity purchase of a 161 MW wind plant in Texas.  All told, the search engine giant has over 1 GW of wind PPAs in addition to equity investments.  None of these deals are behind the meter arrangements providing direct power, but these deals are structured in markets close to where Google operates its power-hungry data centers, thus ensuring that its investments are greening the electricity grid where the company operates facilities and that some proportion of the facilities’ consumption is produced from these local wind investments.

No Assembly Required

The Lamesa plant underwritten by Mars Inc.’s PPA is being developed in partnership with Sumitomo and BNB Renewable Energy, and is expected to go online by the end of 2015.  The expected 800,000 MWh of annual electricity generated by the facility is more than the Mars Inc. company’s annual electricity needs at its 37 U.S. factories and 70 workplaces.

Somewhere in those Mars Inc. offices, most likely, sits some furniture from Ikea.  The Swedish furniture giant also announced in April that it would purchase a 98 MW wind plant developed by Apex Clean Energy in Illinois.  No doubt, the equity investment is sweetened by the company’s appetite for tax credits, but it also offsets the equivalent of 165% of the electricity consumed by Ikea’s 38 stores in the United States.

Social media giant Facebook is not far behind.  In late 2013, Facebook announced a deal – also with MidAmerican Energy – to buy all the output from a 138 MW wind plant developed by RPM Access that would offset the energy needs of the company’s new data center under construction in Altoona, Iowa.

These deals demonstrate that large energy users are increasingly educating themselves on the role wind energy can play in their efforts to achieve a sustainable triple bottom line that balances social, environmental, and economic business needs.

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