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Why companies like Google and Walmart are buying so much wind power

Wind turbines are seen at the Caithness Shepherds Flat wind farm in Arlington, Ore. (Meg Roussos/Bloomberg)
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The U.S. wind energy industry had a memorable 2015, from installing thousands of new turbines across the country to supporting a growing number of jobs.

But perhaps one of the most noteworthy brights spots of the past year, according to an annual report released Tuesday by the American Wind Energy Association (AWEA), was the growing demand for wind energy from major corporations. High-tech firms such as Google Energy, Facebook and Amazon Web Services, as well as more traditional companies such as Procter & Gamble, General Motors, Walmart and Dow Chemical, have signed contracts to purchase increasing amounts of wind energy in coming years.

Corporations and other non-utility customers — including some municipalities and universities  — accounted for more than half of the wind power capacity sold through so-called power purchase agreements in 2015, according to the AWEA. The group said that corporate and other non-utility buyers have signed contracts for more than 4,500 megawatts of wind power capacity, or enough to power the equivalent of about 1.2 million American homes.

Why does that matter?

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It suggests that companies no longer are purchasing wind-generated electricity — and other renewable energy, for that matter — simply to demonstrate their commitment to sustainability or to bolster their images as environmentally conscious organizations. Increasingly, they are turning to wind because it makes financial sense, Tom Kiernan, AWEA’s chief executive, said in an interview.

“We’re at a point of maturity in the wind industry that people are seeing the value in what we’re bringing to them,” Kiernan said.  “These corporations are buying because it’s affordable and it’s clean … This is a good business proposition for them.”

Corporations themselves have said as much.

“As Walmart grows around the world, our energy demands will increase – even with dramatic efficiency efforts,” the company said in a report about how it plans to be supplied 100 percent by renewable energy by 2020. “Thus, we need to accelerate our efforts to make sure we are serving customers more efficiently and sustainably than anyone else.”

Google, which also has a 100 percent renewable energy goal, said the 15 contracts it has signed to date to purchase more than 2 gigawatts of clean energy amounts to taking a million cars off the road. And makes the company the largest non-utility purchaser of renewable energy on earth.

“We’re buying clean electricity directly from wind and solar farms around the world through Power Purchase Agreements (or PPAs),” the company said, “and we’re additionally working with our utility partners to make more renewable energy available to us and others through renewable energy tariffs and bilateral contracts.”

Last fall, Procter & Gamble said it plans to rely on wind power to produce household products such as Tide detergent and Dawn dish soap. The company is partnering with EDF Renewable Energy on a wind farm in Texas scheduled to become operational late this year.

Wind accounts for about five percent of the nation’s energy generation, but last year it represented 41 percent of new power plant installations, according to Tuesday’s annual report. A total of 4,304 new wind turbines were installed across the country, resulting in roughly 8,500 additional megawatts of capacity across 20 states. The industry now supports about 88,000 jobs, less than the number of people employed in solar or hydropower but still an all-time high.

In addition, Congress last year extended a key federal tax incentive for wind energy investment. And as prices for clean technology continue to fall and countries work to cut back on emissions from burning fossil fuels, renewable energy options such as wind and solar power seem destined for continued growth. “It was a very good year,” Kiernan said.

Here are some other takeaways from Tuesday’s industry report:

  • Coal and natural gas remain king when it comes to where Americans get their electricity, accounting for more than two-thirds of U.S. generation. But renewable energy is fast becoming a bigger part of the mix. Wind power accounts for  about five percent of U.S. electricity sources, but it now accounts for more than one-third of renewable electricity generation.
  • Wind energy is seeing a global, not just a domestic boom. While the United States generated more electricity from wind than in any previous year during 2015, China outpaced every other nation in the amount of new wind energy capacity.  China, the United States, Germany, Brazil and India combined to produce more than 80 percent of all new wind capacity installations in 2015, according to the AWEA.
  • Texas is far and away the nation’s leader in total wind energy generation. The state is home to more than 24,000 wind jobs. But Texas also is among the parties suing the Obama administration over its Clean Power Plan, which would favor the development of wind, solar and natural gas to the detriment of coal.

This post has been updated.


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