As the COVID-19 pandemic continues to create uncertainty across the globe, the discussion of pathways towards economic recovery have taken center stage. To maintain the dramatically reduced level of emissions we've seen so far this year, LevelTen estimates that the world would have to build nearly 12,000 new wind and solar projects in 2021 alone. That would represent seven times the rate of historical annual renewable energy development. Those numbers might seem daunting, but that scale of deployment is possible, and there are many recent developments that bring hope.
1. Corporations Remain Committed to Sustainability
Despite COVID and a slowdown in procurement in the U.S., corporate renewable energy procurement has kept its pace worldwide. According to a recent report from BloombergNEF, "With roughly 8,900 MW of new power purchase agreements globally through July, companies are ahead of the pace of last year's record deal-making, when they contracted for a record 19,700 MW over the full year."
One of the reasons the pace has remained steady is because corporations still have commitments they need to make. Over 240 of the world's most influential companies have already pledged to become 100% renewable through RE100, and its membership grows every month. Currently, there's not enough renewable energy under development to meet the demand from RE100 members alone. According to BloombergNEF, the shortfall in supply is now projected to reach 224 terawatt-hours in 2030, up from BNEF's previous estimate of 210TWh.
COVID isn't stopping corporations from making new commitments too, thanks to sustained pressure from customers, employees, and investors. As the Los Angeles Times reported, "in spite of the pandemic, 2020 has proved to be a landmark year for investor action on climate change, with significant resolutions being passed and investment pouring into sustainable funds."
2. There's Now More Political Will to Invest in Renewables
Worldwide, governments are looking at ways to stimulate the economy, with sustainability in mind. In the United States, the House passed an Energy and Water Funding Bill, which includes $7.78 billion to deploy energy efficient and clean energy infrastructure throughout the country. And while the results of the presidential election are anyone's call, if elected, Joe Biden has pledged to sign executive orders aimed at achieving net-zero emissions no later than 2050, with significant interim targets. In addition, due to COVID, the Internal Revenue Service granted renewable energy projects another year to meet safe harbor deadlines for the production and investment tax credits, which provide a massive source of funding for new projects.
In Europe, EU leaders have reached a deal on a €750 billion COVID-19 crisis recovery plan, which includes €150 billion for InvestEU, a new programme that invests in "energy transition technologies," and €94.4 billion for Horizon Europe, which conducts research into the green transition. In addition, as part of its Energy System Integration Strategy, the European Commission said it will ensure the cost-effective planning and deployment of offshore renewable electricity, explore minimum mandatory green public procurement criteria, and tackle remaining barriers to a level of renewable electricity supply.
As a result of these initiatives, billions of dollars will soon flow into the renewable energy industry, and could result in a variety of improvements in the U.S. and EU, including faster permitting and interconnection processes, updated grid infrastructure, investments in storage technology, higher renewable energy standards, and policies to support the faster roll-out of corporate power purchase agreements.
With public and private funds flowing into the industry, we're optimistic that COVID will not deter the rate of renewable energy development around the world. But to accelerate development at the rate required to reach global emission targets, the industry needs a liquid market. It needs to be easy for buyers and sellers to trade quickly; for developers to see the demand signals; with standards and tools that make the entire process more efficient, lowering transaction costs. That's where LevelTen Energy comes in.
3. Investing in Renewables is Easier than Ever Before
LevelTen's renewable energy procurement platform not only delivers access to power purchase agreement offers across North America and Europe, it also provides all the data required to select an offer and avoid a bad deal. Thanks to LevelTen's CFO-Ready™ analytics, which calculate over a billion data points a day, buyers can instantly see the estimated value and risk of any offer, and easily compare projects within a market.
In addition, LevelTen provides a team of industry experts and a host of software tools to make the entire process faster and easier, from running RFPs, to standard PPA contracts, to monitoring the performance of the PPA once the project comes online. With access to supply across continents, all the data required to select an offer, and the tools to get deals done faster, it's never been easier for organizations to find a PPA - or create a portfolio of PPAs - that meet their goals.
Corporations remain committed. Governments are more willing to spend. And thanks to LevelTen, renewable energy buyers and sellers can transact faster and more safely than ever before. With all of this, there's hope that we can emerge from depths of COVID-19 and build a new, more sustainable world.