Did you know that businesses consume 70% of Australia’s electricity, and electricity generation and use is the largest source of Australian greenhouse gas emissions?
Switching to renewable energy, therefore, presents an enormous opportunity to have an impact on climate change.
You may have already switched your electricity provider at home, and making the change at work is a way to increase your impact by 100, 1000 fold or more. While it is definitely more complex, the effort required is less than you might think, and it’s getting easier.
Over 260 major corporations (80+ in Australia) have already made a commitment to switch to 100% renewable (or achieved it!), with hundreds and perhaps thousands of smaller companies doing the same. Consumers, investors, and most importantly, employees, are demanding this change.
You can make it happen at your company and achieve benefits for the planet, the business, and for you, personally, to celebrate. Let’s get started!
- Learn the basics of how businesses source energy so you can ask the right questions internally.
- Understand how your company’s energy situation affects what goal to set and how to go about achieving it.
Your goal is to determine how renewable energy fits with your company’s operations, so that you can choose the appropriate path to achieving it and make sure your company gets credit for its efforts.
Where this playbook takes you
There are two outcomes this playbook helps you achieve for your company:
- Make a public commitment to switch to renewable energy by a certain date in the future (for example, 2025).
- Make the switch as soon as possible.
Companies typically choose to start with a commitment when their operations are complex enough that switching will take more time to figure out, yet they still want to signal their intent publicly.
As always, you’ll want to start by understanding any steps your company has already taken in this area. Talking to your sustainability manager or team is a great first step.
To determine which goal to pursue, you need to do some internal investigation to understand the following:
- How your company gets its electricity today, including how much it uses and who provides it.
- What reasons for switching might resonate with your company, including the importance of cost and making public statements.
Your focus will be on making the case and arming the right people within your company with the information necessary to get it done. We’ll do our best to spare you unnecessary jargon, but learning a few key acronyms and details will accelerate your progress (and make you sound really smart!).
Business electricity basics
Many businesses view energy simply as a cost to be managed, and energy contracts may not be regularly reviewed. The good news is that modifying how your company gets its energy rarely affects operations — computers, air conditioners, and machines don’t know the difference between renewable electrons and those produced with coal.
There is also a greater appetite for examining energy use. Electricity costs have increased 80 to 90% in the last decade in Australia, and public sentiment has placed more focus on energy efficiency and renewables.
To start with, you’ll need to understand what your company’s power needs are and how they currently satisfy them. It will be most likely be one (or a combination) of the following:
- Buying electricity from the grid: similar to how you probably buy energy at home, companies buy from retailers and pay a regular bill based on usage.
- As part of your lease: Some landlords include energy in the cost of your company’s lease on its office building. This can make it more difficult to switch because it is out of your company’s direct control.
- Buying directly from a provider using a power purchase agreement: some companies negotiate directly with an electricity generator (like a solar or wind farm) for a longer term agreement. More on this later.
- Generating onsite: Organisations with large or special electricity needs (manufacturing, for example) or those with onsite solar sometimes generate their own power.
It can be a combination of the above, especially if your company has a large real estate footprint or combination of manufacturing and offices.
What it means to go renewable
What does it actually mean to “go 100% renewable”? Unfortunately, there isn’t a simple answer to this question, except in the case where your company satisfies all its energy requirements with energy it produces using solar, wind, or other renewable sources.
More often, it is a matter of accounting to make sure that energy consumed equals renewable energy generated somewhere else. This is because electricity flows through the grid and you can’t only choose electrons from solar or other renewables, as they all get mixed together.
Renewable Energy Certificates (RECs) exist to help with this accounting challenge (they also encourage creation of renewable energy projects). Very simply, they are a way of keeping track of renewable energy, both for producers and consumers.
Accredited producers of renewable energy get issued a certificate for each megawatt hour (unit of measurement for electricity) they produce. They can either sell the certificates on to someone that has bought their power or anyone else in the market that wants to get “credit” for that megawatt hour of renewable. They can also choose to surrender them and take them out of the market.
The most important thing to understand is: to make claims of using 100% renewable energy, you will need to have the RECs to back it up. This prevents double counting, for example, one solar farm produces 100 megawatt hours, sells it to two companies who both need 80 megawatt hours. If they both claim to be using 100% renewable energy, there’s a shortfall of 60 megawatt hours, which is what RECs help prevent.
How do companies get renewable energy?
Businesses achieve 100% renewable targets in the following ways:
- Generating their own renewable energy onsite: installing solar panels or wind turbines to power operations.
- Through a Power Purchase Agreement (PPA): A contract with a renewable energy provider such as a solar farm to buy a certain amount of energy at a certain price over a long term (7 to 10 year terms are common). More about this later.
- Through the grid using Greenpower: Nearly every energy retailer in Australia has an accredited Greenpower renewable energy offering, which is certified by the government, and allows anyone (residential or commercial) to buy renewable energy through the grid. This is often the most straightforward method.
- Buying Renewable Energy Certificates: This can be done to offset any “black” energy usage that can’t be replaced with green energy, or simply to make the 100% renewable claim faster. These certificates are traded on an open market and come with a cost.
Your company’s priorities and footprint will guide how the company actually meets the renewable target.
Common motivations for switching
The last piece to investigate is what reasons might resonate within your company for switching. We’ll cover this in more depth later, but you can start to suss out what stakeholders care about early, which will help you decide on your path forward. Reasons to switch include:
- Demonstrating progress towards carbon neutrality: consumers, employees and investors expect companies to make progress towards a sustainable future. Your company may already have carbon neutrality targets, and this can help reach them. This includes matching competitors commitments.
- Hedging risk of market fluctuations: signing long term contracts for renewables can protect against rising prices and a fluctuating market.
- Saving money: renewable energy is now cheaper to build. These savings can get passed on, particularly with a long term PPA, but cost is not usually a primary motivator as renewable energy can also be more expensive in some cases.
- Identify key stakeholders and experts who will help you understand your company’s situation.
- Gather others within your organisation to help you.
- Understand the experts and mentors outside your organisation that can help.
Identify key people in your company
Some of these people will help you gather information and others are key decision makers.
Experts and mentors
We’ll help connect you with others that can help at critical points along the way such as:
Corporate sustainability professionals: learn from people who have already completed this work at their companies and are experts in the field.
Industry experts: if you want to learn how to determine if a Power Purchase Agreement is right for your company or whether buying from the grid is a better option, we’ll connect you with the experts. Just email us at email@example.com.
Consultants: For companies with a complex energy situation, hiring consultants is a good idea.
- Determine what goal to pursue and build a plan to reach it
- Consider how you'll influence key decision makers along the way
Now that you have a sense for your company's energy use, you can make an informed decision about the path towards switching to renewables.
Choosing the right goal
While we want every company to achieve 100% renewable energy as soon as possible, it can make more sense to start with a commitment. Consider the following as you set your goal:
Making a commitment is best for companies that want to demonstrate progress and kick their organisation into gear, but their situation requires substantial time to figure out details of switching. They usually...
- Have complex or large energy needs (50GWh per year or more).
- Are risk averse and/or sensitive to cost, or may not yet have a climate risk strategy.
- Don’t have the in-house expertise or resources to do a deep investigation.
- Don’t have complete control over their energy buy.
Proceeding straight to making the switch is best for companies that can move fast due to their situation and/or culture. They usually...
- Have simple or small energy requirements OR the resources and money to invest in this project.
- Don’t care about making public commitments or would rather demonstrate action first.
- Have already committed to carbon neutral or other certifications (B Corp, Science Based Targets etc) that moving to renewables will help them achieve.
- Control their energy buy.
How do you determine how complex your electricity needs are?
Signs of simplicity:
- Operations concentrated in Australia, New Zealand, or other countries with readily available renewable energy (most of Europe, Canada, USA).
- Comparatively low and consistent usage — for example, office buildings where electricity is not included in the lease.
- Your company owns its buildings.
Signs of complexity:
- High usage — 50+ GWh/year or more.
- Many types of usage: offices, manufacturing facilities, remote locations.
- Locations all over the world, particularly in developing countries and emerging markets.
- Your company leases most of its buildings or otherwise doesn’t have control.
Remember! Complexity doesn’t mean it’s impossible. Woolworths has pledged to go 100% renewable by 2025 and they have thousands of locations. You can do it!
Pathways to achieving your goal
The following table lists the high level milestones that most companies go through in order to make this switch.Your experience may differ: you may not need every step (some are optional depending on the goal), and the order may vary. See the more detailed descriptions of each milestone below the table to determine how to factor them into your plan.
Congratulations, you've achieved 100% Renewable Energy!
Understand your company's situation
Goal: Get a sense for how much energy your company uses, its real estate footprint, and how making this switch might align with its mission and values.
Looks like: You should have already completed most, if not all, of the work for this in Steps 1 and 2. This is focused on reviewing current electricity contracts and real estate footprint.
Resources: See this 'Understanding your company’s energy use' resource for more details.
Sequencing: You may need leadership buy-in (see next milestone) to get access to some of this information.
Get buy-in for this project
Optional, but recommended
Goal: Get the minimum level of buy-in in your organisation to make this a priority and allocate resources (staff time, possibly hiring consultants) to help you.
Looks like: Identifying who needs to know about this work to give you the resources necessary to set you up for success. You should already understand the renewable energy basics and you may already have your company’s energy data. Working out the options for switching requires a deeper level of expertise, so you may need staff time from procurement and energy/facilities, and/or to engage outside consultants. At a minimum, it’s worth letting your manager know. If you work outside of the sustainability team, you should engage them. We suggest putting a lightweight proposal in front of leadership to get the staff time and resources required to do the diligence necessary to make a more formal proposal later on.
Resources: See this “How to ask for information" resource.
Sequencing: You might need to get some approval before you can get access to the energy-use data. If so, a more generic proposal without your company’s specific data can be used to get that initial buy in.
Determine options for switching
Goal: Establish how your company could reach 100% renewable energy so that you can bring a proposal to leadership.
Looks like: A list of concrete options from energy providers that will satisfy your company’s energy needs and enable you to claim 100% renewable. This usually means going out to market in a tender process to get real options back. You’ll want to understand what type of renewable claims you can make with each option. Unless you have a background in energy contracts, we can almost guarantee that you will need help from experts on this step.
Resources: See the “Guide to Renewable Energy Providers” resource in Step 4. Consultants and third party organisations such as the Business Renewables Centre of Australia can help and we can connect you with them.
Sequencing: Some companies will make a public commitment without exploring providers in detail, however, it’s worth investigating the options to determine an appropriate timeline (for example by 2022 vs 2025 or later), as well as potential risks.
Make business case for switching
See 'Step 4: Make the case' for full details
Goal: Assemble the best possible argument for making the switch to take for approval by executives.
Looks like: The format depends on how your organisation makes decisions. You’ll include the benefits, costs, and risks associated with switching and a pathway to actually achieve it using the research you’ve done to date.
Resources: See 'Step 4: Make the case' for more detail and a case template.
Sequencing: You may be able to make the case earlier without doing lots of due diligence if your company has limited energy needs, is highly motivated to make this switch, or has a higher tolerance for risk.
Get approval for the commitment
Goal: Your organisation’s leadership formally approves a commitment to switching to 100% renewable energy by a certain date.
Looks like: Put your business case up for a decision with the key stakeholders. This may require multiple rounds of meetings, and will require you to influence the right people in your organisation to show why this change is worth it. See the section below on Influencing Change for more detail.
Resources: See 'Step 4: Make the case' for more detail.
Sequencing: This may not be required if you don’t want to make a public commitment, but it is still a good idea to set a target, if only internally, to drive action.
Goal: Share your company’s commitment with the world to generate some positive press for your company and add to the momentum of companies making this switch.
Looks like: Work with your PR and Communications team to make a public statement on your website, social media, etc. We’d love to work with you on this!
Resources: It will depend on your organisation's in-house capabilities. You may need to engage an agency to support you.
Sequencing: You must get internal approval before making a public announcement.
Determine the implementation plan
Goal: Decide which providers are right for your company and the mechanics of making the transition so that you can make it happen.
Looks like: Procurement, Operations and other internal experts are likely to lead this step of the process as it will require contract negotiations and long range planning. The plan will almost always require approval from the executive sponsor prior to implementation.
Resources: See 'Step 5: Execute' for more details.
Sequencing: You can accomplish this work when gaining approval.
Make the switch
Goal: Carry out the implementation plan to achieve 100% renewable energy.
Looks like: Depends on the sources of renewable energy. It can be as simple as switching your electricity company and purchasing RECs, or can require negotiating PPAs, installing solar panels or some combination.
Resources: See 'Step 5: Execute' for more details.
Sequencing: This is the final required step. From there, you can celebrate and promote the result for your company.
As you build your plan and carry it out, you will need to motivate, inspire, and influence people throughout your organisation. In most cases, making this change will require extra work for people, and you may encounter resistance.
- Why might someone want to work on this? What’s in it for them? Has anyone been outspoken about climate at your company that you might enlist?
- How is climate change already affecting the company, or how will it in the future? Has your company taken a position on climate? How can you connect achieving this goal with the company’s broader mission and values? Can you write it into the blueprint and connect it back to the origin story and goals?
- Who is going to resist this change and why? Can you understand their objections and fears early so you can mitigate them?
You’ll need to flex this muscle most during approval steps, but you’ll want to be working on it all along the way.
Assemble your inputs
First, get a sense for what we suggest including in your proposal in the resource below. You’ll find it is similar to many other business proposals you’ve encountered. We’ve included a set of facts and statistics about market trends to provide a broad perspective, and you’ll want to augment this where you can with specifics for your industry and your competitors, etc. You won’t have all the answers yet, but the rest of this step will help you assemble them.
Ensuring that the information is at the appropriate level of depth and breadth for your decision makers is key to your proposal’s success. If you’re speaking to a CFO, for example, she may have a limited exposure to electricity terms and so it is best not to overload on that detail, but would expect to see more detail on the costs and risks.
Areas where you’ll need to have the details worked out:
- How to achieve 100% renewable — this underpins your proposal!
- Costs and risks to the business.
We’ll help you cover the essential points.
Determining your pathway to renewable energy
The main factors to consider when making this recommendation are as follows:
- Feasibility and cost.
- Ability to make 100% renewable claim.
As a reminder, the ways your organisation can source renewable electricity include the following:
1. Go direct to a renewable energy retailer (Greenpower)
A good option for small to medium sized organisations that don’t want to be locked into lengthy contracts or don’t have the scale for a corporate PPA.
- Feasibility: Simple, just change contracts.
- 100% renewable claim: Yes, with limitations about additionality and emissions reduction.
- Cost: usually 3-5 cents/kwh more expensive than grid electricity due to the cost of LGCs.
- Greenpower: Review our "Guide to choosing a Greenpower provider”
2. Negotiate a Power Purchase Agreement (PPA)
Best suited to larger companies that can enter into contracts that last seven or more years. PPAs enable new renewable energy projects to be financed and provide significant cost savings to companies with substantial energy needs.
- Feasibility: Complex. Requires long term planning, certainty of sizeable demand (25+ GWh per year).
- 100% renewable claim: Yes, plus strong marketing benefit of additionality (new projects being created).
- Cost: Best way to hedge against future price changes and obtain LGCs at reduced cost. Energy savings reported between 15 to 47% according to an industry study.
3. Create your own energy with solar (or possibly, wind)
Companies of all sizes may be able to install solar panels on their buildings to meet some of their energy needs. Large enterprises may even be able to build their own solar/wind farm or help finance one through a PPA.
- Feasibility: Moderate to complex, depending on your energy needs, real estate footprint, and tolerance for figuring it out.
- 100% renewable claim: Very strong for the energy generated onsite, however, in nearly all cases this will require supplemental energy when the sun isn’t shining, which adds some complexity.
- Cost: Upfront capital required. Can result in long term cost savings and protection from market price fluctuations.
You’ll want to lay out the options you considered and how they score on the factors considered above.
Other thought starters:
Feasibility and cost
- How would our energy bills compare?
- What other costs might we incur? For example, fees (consultants, legal, finance), capital costs if installing solar.
- How long would it take us to implement this solution?
- Do we have the necessary expertise internally to accomplish it or would we have to hire or contract for it?
These are best explored with your Procurement team, and working with experts in each area, such as the Business Renewables Centre of Australia.
Making the 100% renewable claim
- Is it important to your business to be able to make this claim publicly?
- How strict do you want to be about the claim?
- What is your company’s willingness to pay extra to be able to make this claim?
Making the claim that your company is 100% renewable requires meeting technical criteria, but this can vary, depending on how much of your usage you’ll offset with credits.
We advise you to follow the criteria set out by the RE100 for making a claim of 100% Renewable:
For a more specific Australian market perspective, check out FlowPower’s webinar on the topic here.
For many companies, switching to 100% renewable is also about supporting the broader economy’s transition to renewable energy. Companies that care more about this are more likely to finance a solar or wind farm in their local geography. Westpac is a great example; they financed the brand new Bowen Solar Farm in Wagga Wagga, NSW. It provides their energy, but also creates jobs in the region, which is a story they can tell in the media.
You might consider:
- Are there other objectives we hope to achieve in making this transition, such as contributing to the broader energy transition or the local economy?
The type of risk you’ll encounter is most closely related to the way you choose to source the renewable energy. Here are some to watch out for and consider how to mitigate:
1. Making claims of 100% renewable
This only applies if you want to make public statements about the switch. You have to ensure that you have the Renewable Energy Certificates to back up any claims.
2. Risks associated with Power Purchase Agreements
These are best explored with the experts at Business Renewables Centre Australia. Typically, they include project, market and credit risk. Large scale new energy projects always carry risk, prices may change and contractual obligations may not be fulfilled. It is worth modelling different long term scenarios if you are seriously considering a PPA.
Drafting and socialising your case
Now that you’ve figured out the main inputs, put your case together using the proposal template.
It’s a good idea to get feedback from people along the way and help with the different sections from internal experts.
- Build support for the change
- Get it approved formally
It's important to build support for this change along the way so that it doesn't come as a surprise to anyone once it reaches the decision stage. Start by considering what you have control over versus what areas you might be able to (or need to!) influence change in. It may take substantial time to build support and influence those required, so it is best to start on this early.
Remember, your goal is to get a commitment to switch to renewable energy, so focusing everyone on the commitment can make the ask easier.
This may require multiple rounds of pitches and revising your proposal It all depends on your company, and this part of the process can go on for months, especially in more complex organisations. Others who have made this change successfully advised that it didn't require much effort, just patience.
If you get stuck, get in touch with us. We'd love to hear how you're doing and help out where we can.
- Share the impact of this change with your company and hopefully, the world!
- Celebrate with and thank those that helped make this change
Share the impact
Making the commitment to shift to renewables has impact internally and externally, and you can magnify it further through effective communication, as noted in 'Step 3: Build the plan'. You will want to work with your PR and Communications team on how best to represent this commitment externally. Keep in mind the RE100 criteria for making credible claims here. We suggest making a public statement through a press release or blog post indicating the commitment and timeline. Sharing externally like this reflects positively on your company, and also adds to the groundswell of companies making the shift, putting pressure on others to follow suit.
Thank supporters and celebrate!
Congratulations on making the commitment to shift to renewables! You should be proud of this accomplishment and all of your efforts to achieve it. You've joined a group on the cutting edge.
Make sure to thank everyone that helped you get to where you are today, share the news out to your personal networks and of course, with all of us at WorkForClimate. And then, take sometime to acknowledge for yourself what an accomplishment this is!