The list of huge multinational companies seeking to source 100 percent of their energy from renewable generating sources seems to grow on a monthly basis — 63 percent of the organizations on last year’s Fortune 100 list have made a proclamation of this sort.
While many have turned to the U.S. market first to start delivering on those promises, the reality is that they’ll need to look far beyond America’s borders to reach them.
They won’t need to search for long, as evidenced by ongoing investments in clean energy that totaled more than $53 billion during the first quarter of 2017, according to data from Bloomberg New Energy Finance. While that was a relatively quiet period compared with past years, it still brought one of the largest solar projects: Italian energy powerhouse Enel’s 754 megawatt photovoltaic installation in Mexico.
And make no mistake, investments in clean energy aren’t simply altruistic.
While the concerns of each region and market are unique, common themes drive the worldwide transition away from coal-fired power plants to other generating sources and motivating energy companies such as Enel. The utility has set a goal of becoming a carbon-neutral generator by 2050, and it is far less grounded in emotions than economics.
The reality is that it makes sense to avoid huge capital investments in massive new power plants that will become obsolete before they come online. Instead, companies such as Enel and another market disruptor — Australia’s AGL Energy, which is in the process of closing all its coal plants — are prioritizing investments in digital technologies.
In particular, their focus is on software and hardware that help make intermittent generating sources, such as solar and wind, more reliable. Extending the life of legacy plants during the transition is another priority. These energy companies also are keenly interested in applications and services that help them sense and respond much more quickly to the concerns (and buying habits) of commercial and retail customers.
“There are two major mistakes that this industry has made over and over again, in the past two decades,” said Francesco Starace, chief executive of Enel. “One is to build huge plants that will take years and years to be completed. When I say years and years, I mean more than three years. And second, build generating plants without visibility into whom to sell the energy to, for what price and how long, which is called merchant exposure in the industry. We said, ‘We think that this is one of the worst possible times to [keep making] this mistake.'”
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