This Massive Utility Wants More Renewable Energy Because Corporations Are Demanding It

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In June, Alabama Power, one of the country’s largest electricity providers, filed a petition with the state’s Public Service Commission to add up to 500 megawatts of renewable energy over the next six years. The utility, which serves over 1.4 million customers in Alabama, cited customer demand as a primary reason for adding all this renewable energy — specifically corporate customers.

“This program was driven by conversations with customers looking to meet renewable mandates pushed down from their headquarters,” said Tony Smoke, Alabama Power vice president of marketing, in a statement announcing the request. “As a service provider, our focus is to make sure we are providing customers access to choices they want.”

Large companies demand a lot of power, especially those in the technology sector running things like data centers. As these companies become more aware of their impact on climate change and develop updated policies, they can drive change at the local level through implementing a sustainable corporate culture. Alabama Power’s move into renewables is just one example of how this can happen.

The World Wildlife Fund and the World Resources Institute launched something called the Corporate Renewable Energy Buyers’ Principles in 2014 to help large renewable energy buyers like Walmart, Intel, IKEA, Target, and GM, get access to the power they need. The program now includes some 34 companies demanding over 20 million megawatt hours of renewable energy to meet their near-term goals.

Earlier this summer it was announced that Alabama’s old Widows Creek coal-fired power plant would close in October, and shortly thereafter be converted into a Google data center powered by 100 percent wind and solar energy. While Alabama Power’s announcement wasn’t in response to Google moving into the state, it is part of the broader conversation going on about how to give large customers like Google and other corporate entities what they want.

“We’ve got customer interest in renewables, and particularly in solar right now,” said Nick Sellers, Alabama Power vice president of regulatory and corporate affairs. “It’s usually those customers that are under some sort of a mandate, either a government mandate or a corporate mandate.”

According to Alabama Power, much of the 500 megawatts of renewable energy — which is enough to serve about 100,000 homes — will come from solar power. While the utility already has some 1,600 megawatts of hydro power available and 400 megawatts of wind from Kansas and Oklahoma, large-scale solar development is an entirely new direction for the company.

The proposal would allow Alabama Power to build its own renewable energy projects of up to 80 megawatts each or to purchase generation from other sources.

“This is the beginning of what we would like to see as a long-term change in how Alabama produces and uses energy,” said Tammy Herrington, Executive Director of Conservation Alabama. “Alabama Power is signaling their commitment to renewable energy, and we look forward to working with them to expand this program to make our state a leader in solar energy.”

The statewide conversation around renewable energy in Alabama is not so straightforward. Alabama is one of 12 states suing the EPA over its proposed Clean Power Plan to limit greenhouse gas emissions from the utility sector, of which three-quarters of the emissions are from coal. Nationwide, the Clean Power Plan aims to cut carbon emissions from the power sector by 30 percent from 2005 levels, but it offers different targets and flexible approaches on a state-by-state basis.

According to the EPA’s proposed plan, Alabama will be required to cut power sector emissions by 27 percent by 2030, with about two-thirds of this coming from conversions of coal-fired power plants to natural gas and additional renewables. The remaining third would come from demand reduction and increased efficiency in coal plants.

The finalized Clean Power Plan will be released later this summer and it could be even more stringent, especially when it comes to efficiency and renewables.

Alabama Power, which is a subsidiary of the much larger utility Southern Company, has been criticized previously for its lack of investment in solar power. Georgia Power, which is also owned by Southern Company, has more than 900 megawatts of solar capacity installed already, about two percent of its total production.

Southern Company is the third largest utility in the country and the third biggest coal user, according to a new report on utility-sector emissions from the sustainability group Ceres. The report found that five large utilities — Duke, AEP, Southern, NRG, and MidAmerican — generate 25 percent of the power sectors CO2 emissions. It also found that Southern has seen about a 27 percent decline in emissions since 2000.

Another example of large customer interest driving local change is in Georgetown, Texas, a conservative city that recently decided to go 100 percent renewable in part as a business decision to attract renewable energy-conscious customers like Apple, Google, and Facebook.