Feb 23rd, 2023
How Salesforce Used Emissionality to Inform its Groundbreaking D-Recs Procurement
Less than two weeks ago at a sold out GreenBiz 23, tech giant Salesforce announced the procurement of 280,000 megawatt-hours (MWh) of renewable energy certificates. But this was not your classic announcement of large-scale clean energy secured through long-term contracts such as power purchase agreements (PPAs) — often focused on renewables projects in North America — which have continued to set new records year over year.
Instead, Salesforce set its sights on “high-impact renewables” in emerging markets such as Southeast Asia, Sub-Saharan Africa, and South America. They partnered with Powertrust to source Distributed Renewable Energy Certificates (D-RECs), a financial mechanism that enables organizations to accelerate deployment of capital for small-scale, distributed renewable projects.
Renewables procurement with social impact
D-REC projects can have important social impacts, by helping alleviate energy poverty through financing of projects that focus on electrifying schools, hospitals, and small businesses in less-developed and under-electrified regions of the world.
For example, in India, one Salesforce-connected project will build a solar-powered microgrid in Nagaland, an eastern state in India, for the first time bringing electricity to an isolated mountain community.
For another, in Sub-Saharan Africa, a solar-and-storage installation at a hospital will help improve electricity reliability while controlling rising electricity costs. The system will power ventilators, organ support equipment, and operating rooms.
Overall, these and other projects like that are designed to deliver on UN Sustainable Development Goals related to climate resilience (goals 9 and 11), universal energy access (goal 7), and gender equality (goal 5).
Putting emissionality into practice
Looking beyond North America to source renewable energy can also have a magnified beneficial impact on global greenhouse gas (GHG) emissions, by displacing fossil-fueled generation on dirtier grids around the world. It’s a procurement strategy known as emissionality, which Powertrust calls out as one of their four pillars. They identify “grids with the highest emissions factors and deliver projects that are positioned to have the greatest potential to reduce carbon emissions in the region.”
Case in point from the recent Salesforce announcement: a project in Brazil will replace old, dirty diesel generators with a solar-powered microgrid for a remote community along the Amazon River, reducing fuel consumption by more than 50% while slashing emissions.
This was not Salesforce’s first experience with emissionality. In late 2020, the company unveiled a strategic shift in its approach to renewable energy procurement, captured in the white paper More Than A Megawatt: Embedding Social & Environmental Impact in the Renewable Energy Procurement Process.
“As a company, we’ve been taking a hard look at what makes ‘the best’ renewable energy project,” explained Megan Lorenzen at the time. She’s a senior sustainability manager at Salesforce. “Purchasing renewable energy is about much more than adding new megawatts of renewable energy to the grid. It's about improving the state of the world, which includes considering a number of factors such as land use impacts, wildlife impacts, equity issues, community benefits, and WattTime’s emissionality work, which spans both avoided emissions from a climate perspective and human health considerations for air pollution.”
The time is now for renewables procurement to do more
Salesforce’s leadership on this front comes at a time when corporate renewable procurement can and must do more to help actually reduce global emissions, and not merely “zero out” a company’s GHG emissions footprint on paper.
Beyond North America and Europe, we’re seeing alarming examples of a potential rise in dirty fossil-fueled electricity generation. Pakistan is considering quadrupling its coal-fired power generation in a move away from natural gas, per Reuters, a move that comes ironically and tragically in the wake of devastating flooding worsened by climate change. India says it might build 28 GW of new coal power plants by 2032 to meet that country’s growing electricity demand.
Last year saw record levels of fossil fuel subsidies, according to the International Energy Agency (IEA). Most were applied in developing or ‘emerging market’ economies. The two largest categories of fossil fuel subsidies were in electricity (#1) and natural gas (#2).
A global approach to corporate renewables procurement — and especially one that incorporates an emissionality lens — can unlock dual climate and social benefits, helping to stem the tide of a pendulum swing back toward emissions-intensive fossil-fueled electricity generation.
Yes, renewable energy buildout via capacity additions worldwide has “unprecedented momentum.” Global renewable power capacity is now expected to grow by 2,400 gigawatts (GW) over the 2022–2027 period, an amount equal to the entire power capacity of China today, according to IEA’s Renewables 2022.
But the real impact metric will be not how many GW of clean generation get built, but rather how much fossil emissions it displaces and how many lives are beneficially impacted. Emissionality can help those same GW of renewable energy do more. Salesforce’s example is a promising start.