- Virtual Power Plant
- Commercial and Industrial
Large Energy Consumers Can Lead the Charge to Net Zero
In total, energy customers in the commercial, industrial, and institutional segments typically make up a majority share of total electricity demand in a country. As a result, these sectors generate indirect emissions resulting from the electricity production required to meet their demand. Combining those with the direct emissions from end uses in those sectors means large energy consumers are usually responsible for a significant share of total emissions. As such, these consumers have a responsibility to aggressively implement strategies that will lower their energy usage and reduce direct and indirect emissions as the world looks to achieve net zero. Large energy users are uniquely positioned to begin tackling climate change without directly partnering with their local utility.
Large Energy Consumers Have Options and Resources to Decarbonize
In 2021, corporate procurement of renewable energy capacity in the US reached a record 11.06 GW. To date, commercial and industrial customers in the country have contracted more than 52 GW of new renewable capacity. Although some of these procurements are through power purchase agreements, something residential customers can pursue in many states, there are other financing options available to corporate customers. Energy storage agreements, bilateral deals with utilities, and outright project ownership are options typically more suitable for large organizations that have additional capital and financing resources available. Large energy users that continue to adopt renewable capacity will catalyze the adoption of distributed energy resources management systems and virtual power plants by utilities and grid operators to maintain grid balance and reliability. New strategies for grid management are going to be required as supply-side volatility increases and the availability of baseload fossil fuel plants decreases. In looking to decarbonize their operations, large energy consumers can play an instrumental role in driving the energy transition.
Decarbonization Efforts Result in Benefits for Customers and Utilities
Some large energy users aren’t stopping with renewable energy capacity procurements; they’re performing extensive energy overhauls at their facilities to further reduce their emissions. The U.S. Department of Defense, the largest single energy consumer in the country, is investigating energy resilience and decarbonization measures in the wake of climate change. In 2019, Ameresco completed a comprehensive energy project on the 8,095-acre campus of the U.S. Marine Corps Recruit Depot at Parris Island in South Carolina. In addition to foundational energy efficiency improvements, the project included the installation of onsite renewable and backup power generation capacity as well as an energy storage system tied together with an advanced control system to optimize usage. Should there be an outage on the main grid due to an adverse event such as a hurricane or tropical storm, which are common in that region, the onsite generation and storage resources paired with the control system can maintain the depot’s operations. The project has resulted in a 75% reduction in demand for utility-sited electricity and annual cost savings of roughly $6.9 million, and has reduced the depot’s annual CO2 emissions by more than 37,000 metric tons.
In addition to added resilience, when large energy consumers complete projects of this caliber, they are effectively meeting a portion of the service area’s demand through clean self-generation, meaning the utility can reduce their reliance on fossil fuel plants. In states with renewable portfolio standards or emissions reductions mandates, corporate renewable energy procurement and behind-the-meter projects such as Parris Island can help put them closer to compliance. Large energy consumers have various energy management solutions and resources available to them that can lower the overall emissions from the power sector in their region, reduce their own operating costs, and increase their energy resilience.