When General Motors joined the RE100 initiative in 2016, committing to reaching 100% renewable energy for its global operations by 2050, the automaker estimated it was already saving $5 million annually from using renewables such as wind, sun, and landfill gas.
This month the Detroit-based automaker became one of the first companies in Michigan to participate in a new Consumers Energy program that matches 100% of their electric use at operations in the state with wind-generated power. Participating in programs like this is part of the automaker’s four pillar strategy to meet its RE100 commitment.
The utility’s program, a special type of PPA also known as a green energy rider tariff, was approved last year by the Michigan Public Service Commission and allows commercial and industrial customers to source electricity from renewable sources located on the utility’s grid. Previously customers like GM were limited to renewable energy credits.
“There are not a lot of green tariffs that have been offered on the market, but more utilities are starting to look at them as an opportunity in the C&I space,” says Rob Threlkeld, global manager of renewable energy for General Motors.
Recently we caught up with Threlkeld to find out more about the Consumers Energy green tariff and how it fits into the automaker’s strategy for reaching the RE100 goal.
What has been GM’s renewables strategy in the past?
It goes back a couple decades to our first landfill-gas contracts. We started to look at landfills by some of our sites, and used the landfill gas in our boiler operations there. Then some of our first solar projects were rooftop PPAs in 2005 and 2006.
Fast forward to 2011, when we were one of the first companies to establish a renewable energy target, which was to procure 125 megawatts of renewables by 2020. Just a short time ago that seemed like a pretty insurmountable task given that the offsite market hadn’t really evolved. But our first wind PPA in Mexico for 34 megawatts allowed us to surpass the 125-megawatt target. Then in September 2016, we announced we had joined the RE100.
How does transmission and distribution fit in?
The transmission and distribution is getting to where the resources are. That’s in the mix, along with how the technology already out there helps address shortfalls. Think about how you load the various transmission lines based on temperatures — dynamic load rating. Figuring out how those technologies can enable the transmission of renewables while growing out the transmission portfolio is part of the strategy.
The other part is engaging with utilities and regional transmission operators (RTOs) to access renewables. Utilities are natural partners for renewables, like our green tariff with Consumers Energy. More states, utilities, and public service commissioners are looking at green tariffs as an option to grow the portfolio.
Are there challenges with green tariffs?
Trying to figure out solutions for new load and existing load customers, that’s a big challenge. How do we address everyone’s needs as we look at options?
The Consumers Energy green tariff addresses existing and new load customers as a result of energy legislation that was passed in the state of Michigan in late 2016 that required utilities to look at volunteer green pricing programs or green tariffs. Regulators, utilities, and companies in Michigan came together.
What is GM’s current renewables strategy, especially around green tariffs?
We are talking with other utilities in the space, and there is strong interest. It’s part of our four pillar strategy to meet our RE100 commitment. We’re not just putting all the focus on renewables. We have continued a strong emphasis on energy efficiency. You want to reduce the denominator first, then you replace it with renewables.
The third and most interesting, especially in the transportation space, is how you integrate more renewables with electric vehicles. Looking at battery storage and potentially fuel cells or advanced propulsion systems, everything is going to touch the grid of the future. How are you enabling distributed generation resources? Pillar four is around policy. With the Consumers Energy green tariff, we were engaged with the legislation that passed.
What is your approach to get everyone on track to develop solutions instead of just tabling it?
The Renewable Energy Buyers Alliance, which came out the Corporate Buyers’ Principles, is the key mechanism that has grown. The original Corporate Buyers’ Principles, when it started in 2013, was looking at how to scale up power purchase agreements to offsite procurement. Those types of questions were brought up within the umbrella structure of the Renewable Energy Buyers Alliance.
Initially, C&I customers were recognizing that we needed to pull the developers into the room. We looked at power purchase agreements and offsite procurement. And we’ve had utilities in the room, especially when we look at sourcing renewables, whether through green tariffs or PPAs.
Recently it’s been about how to engage the RTOs to get low-cost renewables from resourced regions to load regions. Collaboration really is a powerful tool when you see the number of companies in this space driving a path forward.
Are there results from all of this collaboration you can share?
The Business Renewables Center publishes an annual total gigawatts that were sourced out. They have a chart showing their analysis of all the public transactions during the past six years. In 2017, corporate renewable deals — excluding onsite generation and deals with operating plants — equaled 3.11 gigawatts of capacity.
Do you have advice for energy managers in the space?
Initially when we were looking at the RE100 goal we got the question back, ‘Are you putting all the emphasis on renewables?’ We’re looking at a diversified portfolio strategy, but it didn’t come across clearly so it had to be broken into the four pillar strategy. It’s all going to support getting us to the RE100 commitment: energy efficiency, sourcing renewables, looking at energy storage and where the electrification is going, and how we leverage our policy and scale to make all of this work.
Having a portfolio strategy like this allows you to adjust. Does it make sense one year to put most of your investment in energy efficiency? As the markets move or come down, a portfolio strategy gives you the ability to move where it makes the most economic sense as a company.
What’s next for GM?
Next for us is continuing to work with our utility partners to look at other opportunities in the green tariff arena, and continuing to look at renewables. We’ve got our RE100 commitment by 2050, driven by the four pillar strategy. We’re collaborating with our other partners in the space, and keeping engaged with the Renewable Energy Buyers Alliance so we can grow renewables and accessibility for all.
Rob Threlkeld will be speaking at the Environmental Leader Conference & Energy Manager Summit in Denver May 15 – 17, 2018. His track, Energy Implications of Emerging Transportation Needs, starts at 3:15 pm on May 15.