Clean Energy Trends

Change is afoot in how the biggest energy consumers get their energy. Green power purchasing – primarily through renewable energy certificates (RECs) – has grown by over 300% since 2006, and is forecast by the National Renewable Energy Laboratory to grow anywhere from 50-400% over the next three years.

I’ve spent the past couple of days perusing data from the EPA on their Green Power Partnership program (GPP) to see what’s going on in the clean energy market. Why this data? For three reasons:

  1. Green Power Partnership participants constitute approximately 70% of the voluntary renewable power market.
  2. It’s the most granular data on buyers and suppliers that is publicly available.
  3. Historical data is available in a consistent format for over 5 years.
An increasing number of Fortune 500 companies are participating in the GPP – 65 in 2012, an increase of 33% since 2008. It may not come as a surprise that these companies are leading the charge on green energy purchasing, comprising 14.9 million MWh (73% of GPP purchasing) in 2012.

Source: : US EPA Top Partner Ranking (

What did come as a surprise – despite my having worked with local governments over much of the last three years – was that local governments were second to the Fortune 500 in total MWh purchased and right on top of the Fortune 500s in terms of their average contract size (more on this in a moment). Both Fortune 500s and local governments average more than 2.5 times the power per source than higher education and Federal government customers!

In both markets, there are two key trends playing out. First, both Fortune 500s and local governments are increasingly diversifying their supply, procuring green energy from more sources than they have previously. Second, on-site generation is becoming an important part of their green power portfolios.

Green Energy Sourcing

Source: US EPA Top Partner Ranking (

In the green energy market, sources can be REC suppliers, green electricity providers, or on-site generation. From the chart above, the trend towards supply diversification is very clear among Fortune 500s, which increased their average to 2.15 sources per company in 2012. The trend is a little less clear among local governments, which ticked up to 1.30 sources apiece after a couple of years hovering just over 1 apiece.

The parity in average MWh per source between Fortune 500s and local governments is in large part due to the difference in average number of sources per organization.  I suspect that this difference is in part a function of procurement processes – to wit, local governments typically have a more difficult (read: bureaucratic) procurement process, so they prefer a single source to multiple sources.

Source: US EPA Top Partner Ranking (

The trend towards on-site generation is likewise clear among Fortune 500s, though they source a lower overall percentage of their green energy from on-site sources than local governments. The latter have had fairly flat growth in on-site generation, but it constitutes a more significant percentage of their green energy sources.

The overwhelming technology choice for on-site generation is solar at 73% of on-site installations in 2012, up from 50% in 2008. However, the solar average of 1,705 MWh produced per installation pales in comparison to biogas, which as the second-place technology choice produces an average of 15,838 MWh per installation.

Clearly, we have reason to be optimistic that our power mix in the future will look drastically different than it does today. Though purchasing drivers differ (a topic for another post), both Fortune 500 companies and local governments are leading the way through building on-site generation capacity and purchasing clean power.

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