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Corporations seen helping to drive US renewables development

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Corporations seen helping to drive US renewables development

Someof the biggest companies in the U.S. are taking a more active approach to how theyprocure their energy supply and are helping to drive renewable energy development,according to a panel of experts speaking April 28 at the North American Energy MarketsAssociation spring conference in Orlando, Fla.

"Thereis about 15 GW of latent demand for renewables that wants to be built by 2020 inorder to meet the targets of Fortune 500 companies that have committed to some degreeof renewable energy in their supply portfolios," Craig Gordon, vice presidentof sales and marketing at InvenergyLLC, said.

For amajor manufacturer such as 3M Co.,energy is "one of the biggest line items on our P&L," Renee Schmidt,sourcing specialist for global energy demand at 3M Co., said. "It's alwayscoming down to electricity and natural gas; it takes a lot of it to manufacture."

3M operates200 locations, including about 100 in the U.S., to make 70 various products.

"Froman energy perspective, [we spend] hundreds of millions of dollars a year of naturalgas and electricity to make our products," Schmidt said.

Explainingto 3M executives the reason for the high costs, and why being attached to a municipalityor operating in a regulated market can hinder their ability to reduce those costs,can be challenging.

"Sowe're really trying to switch that [by] partnering with a lot of our utilities,and we're trying to go outside the box," she said.

3M hasset a goal to procure 25% of its energy needs through renewables by 2020.

Accordingto Gordon, among the biggest commercial and industrial renewable energy leadersare Alphabet Inc., theparent of Google Inc.and Google Energy, with1,839 MW of capacity; Amazon.com Inc.,with 538 MW of renewables capacity; Walmart,with 377 MW of capacity; Equinix Inc.,with 330 MW; and Microsoft Corp.,with 285 MW of renewables capacity. In all, 17 of the top 28 renewables leadersin the commercial and industrial space are Fortune 500 companies.

Gordonalso noted that four of the top five companies on the list are companies with "hugeand growing data center needs."

"They'regrowing quickly, they're very aggressive, they're really trying to drive down costsand, at the same time, they're really trying to grow market share," he said.

Gordonsaid he sees "very rapid growth for a dozen or more years. It's probably thelargest single source of growth of load probably in North America."

Accordingto Joni Hamson, director of business development at EDF Renewable Energy Inc., new corporate renewables capacityhas more than doubled each year since 2012.

Includingannounced contracted capacity of corporate power purchase agreements, green powerpurchases, green tariffs and outright project ownership, corporate renewables capacityhas grown from just 50 MW in 2012 to more than 500 MW in 2013 and has since climbedto 1.18 GW in 2014 and 3.21 GW in 2015.

So farin 2016, corporations have added 0.43 GW of renewables capacity, Hamson said.

The of the production tax creditfor wind generation, which begins to step down after 2016, and the investment taxcredit for solar, which does not begin to step down until 2020, is yet another drivingforce for renewables development, Gordon said.

"Thetime is now," he said. "There was a lot of corporate buying last yearbecause they thought the PTC was going to end at the end of 2015, and that's whythere was a big ramp-up in all of those contracts signed in 2015."

Likewise,because of the step-down nature of the PTC extension, the push for renewables in2016 will remain strong, Gordon said, as corporations and utilities look to get100% of the PTC value before it steps down to 80% in 2017.

"Iwould expect that the chart is going to be equal to, if not greater, in 2016 fornew-signed deals," he said. "Those projects will probably be built nextyear."