Once confined to the realm of idealistic buzzwords, the phrase “alternative energy” has evolved into a concrete and actionable business objective for major companies around the globe. This is especially true for utility companies—which were some of the first to answer the call for renewable resource use— because of product nature and the sheer scale of environmental impact. Despite the costs and long-term, strategic planning involved in providing sustainable energy, companies that make the right investments will find clean energy initiatives help get consumers interested in their brand, illustrate a commitment to the world in which they operate, and even improve the bottom line.
GE is one company that’s doing all of this and more through its “Ecomagination” program. Ecomagination is GE’s growth strategy to reduce environmental impact globally via commercial solutions, investments in cleaner technology and business innovation, and enhanced resource productivity. The company continues to develop this program and created the Digital Wind Farm, a connected, adaptable wind energy ecosystem that pairs turbines with digital infrastructure for the wind industry, in 2015. Over the past 12 years, GE has invested $17 billion in research and development into Ecomagination, along with $2 billion in wind power research and development alone.
“While costs are coming down, it remains a complex market,” Deb Frodl, GE’s global executive director of Ecomagination, says. “A company needs to invest in learning how [its] local renewable market works, where the best opportunities are, how to manage capital, and how to evaluate risk.”
Frodl explains that financial and time-related investments can be enough to dissuade a firm from leveraging low-carbon sources aggressively, especially if they don’t have the necessary internal resources to manage the process. In the end, sustainability efforts must be aligned with organizational goals and capabilities and be well-researched before they are carried out.
“A sustainable solution is one that improves economic and environmental outcomes,” Frodl says. “For us, finding the right projects where economics supported the investment in low-carbon solutions was the most difficult part. Having a solid understanding of energy use and future needs, along with costs involved in a proposed project, are key.”
One example of a cost-effective solution was GE’s development of a solid oxide fuel cell, or SOFC. Other iterations of this technology required the ultra-rare metal platinum, but GE was able to create the same results using stainless steel. The outcome was a cell with an unprecedented 65 percent fuel efficiency, lower emissions, the ability to generate between one and 10 megawatts of power with a quick start-up time, and the power to create electricity at any location with a supply of natural gas.
Achieving sustainability isn’t always simple, but it can reap incredible rewards. The GE technologies and solutions in the Ecomagination portfolio have generated $232 billion in revenue since its founding in 2005, and companies in other sectors can also experience the benefits of renewables.
The 2015 Nielsen Sustainability Report found that in the consumer goods sector, sales from brands with a demonstrated commitment to sustainability grew more than 4 percent globally in 2015, while those without it grew less than 1 percent. Another 2015 CR study conducted by Cone Communications found that more than eight-in-10 consumers consider CR when deciding:
• What to buy or where to shop (84 percent);
• Which products and services to recommend to others (82 percent);
• Which companies they want to see doing business in their communities (84 percent); and
• Where to work (79 percent).
In other words, renewable energy matters to consumers and can lead to financial gains year over year.
“We really have seen an uptick in consumer interest and education on the issue over the past decade. We’re seeing it manifest itself not just in our industry, but also in the retail sector, the hospitality sector, the manufacturing sector,” says Melissa Lavinson, vice president of federal affairs and policy and chief sustainability officer for PG&E Corporation. “Consumers want to understand … how they can better use their energy in terms of becoming more efficient and having more opportunities to take advantage of clean energy alternatives.”
PG&E has grown its clean energy portfolio since the 1980s, and Lavinson says she has seen firsthand how investment in this technology delivers results. It was one of the first companies to implement a renewable portfolio standard, which generated demand for alternative energy in the California market, and in turn, created more opportunities for technology providers to use innovative energy solutions and, ultimately, reduced costs.
Commitments to alternative fuel serve as a way to meet environmental goals across an enterprise. Today, many energy providers partner with companies in other sectors to help them do just that.
NRG Energy is one such provider. As the leading integrated power company in the U.S., NRG has worked with solar and wind technology for nearly a decade to supply sustainable electricity to the U.S. power grid. Since starting in clean energy in 2009, it has become one of the nation’s largest owners and operators of wind and solar facilities, while working to provide commercial and industrial customers with energy solutions to meet their needs. Prior to taking the plunge, its power plants generated power almost exclusively through conventional sources— namely natural gas, coal, oil, and nuclear.
“We saw the opportunity as costs are declining rapidly in alternative technologies. It became not just climate-smart, but also [economically] smart to move to renewable generation in a variety of areas in the country,” Bruno Sarda, vice president of sustainability at NRG Energy says. “We looked at the needs of our commercial and industrial customers, many of whom have set their own sustainability goals and corporate responsibility initiatives, and many of them, if not all of them, have energyrelated or emissions-related goals.”
In some cases, NRG works with clients to reach sustainability goals by decarbonizing the power that goes into the grid. In other cases, it works with organizations directly to meet power needs through on-site solar, off-site generation, community solar developments, and other projects.
“It’s a complicated field and a complicated subject, and I think in the past, some companies that had strong commitments to decarbonizing their own operations felt like they had to become experts in energy, but they really don’t,” Sarda says. “My advice to them is start with you. Start figuring out what your energy profile is, what your energy needs are, and what your real estate strategy is … and then once you have a good sense of what sounds right for you, there are all kinds of different ways to go about [achieving sustainability.]”
The scope and variety of such projects is considerable, but there seems to be a consensus that sustainable energy solutions are well worth the time, resources, and price tag. The best energy plan will vary from company to company depending on their geography, organizational goals, and budget, but no matter how they choose to get there, there will always be room for sustainable growth.
Any organization looking to start or expand a clean energy portfolio will have plenty of options to choose from in terms of energy sources. But the source or sources that a company chooses will depend on many factors including budget, geographic location and the priorities of partners, customers and affiliates.
SIDEBAR: Renewable Energy Sources
Here is a quick list of some of the most promising sources of renewable energy today. This list is not comprehensive, and there are other sustainable energy sources that could be good choices as well:
Solar: Using solar panels for hot water heating, solar cooling, to directly supply heat or light to buildings, or to generate electricity.
Hydroelectric: Harnessing the power of a moving body of water to move turbines and generate electricity.
Wind: Capturing the wind’s kinetic energy through turbines and using it for mechanical tasks such as grinding grain, pumping water, or to conduct electricity to power buildings. (This is one of the least expensive).
Geothermal energy: Using heated water and steam from the earth to fuel power stations, which convert the steam into electricity.
Ocean energy: Either using the ocean’s thermal energy from the sun’s heat or mechanical energy from the tides and waves to generate electricity. Thermal energy systems evaporate the water and allow the steam or vapor to move turbines, while tidal energy systems force the water through turbines.