Drawing on Renewable Energy is not a fad
Drawing on renewable energy is not a fad, it is a profitable business to which major corporate leaders are betting strongly.
Early this week, New York skyline was lit up in green. The Empire State Building went green on the opening ceremony of the Climate Week NYC, one of the major platforms which have driven climate action forward in coordination with the United Nations. Being held in the side-lines of the United Nations General Assembly, the summit brings together public and private sectors from across the globe, shaping the agenda of policy makers, industry leaders and investors while defining climate change as a central issue of our time and the turn towards renewable energies as the mean to achieve it.
As it is the case when political and economic forces meet, great announcements and commitments are expected. While the stand of some coalitions, mainly public ones, is predictable, there is always room for new key stakeholders in an urgent bid to accelerate climate action.
One major coalition that is gathering momentum is RE100, a global initiative of more than 100 influential businesses that set a public goal to source 100% of their global electricity consumption from renewable sources by a specified year. While major European and American companies have joined the initiative, headlines turned towards a new stakeholder: Grupo Bimbo - the largest bakery firm in the world – and first Mexican and Latin American global company to join the initiative.
Having operations in 32 countries and currently meeting 40% of its 2025 goal, the firm is clear that it needs partners to match the 60% needed. While talks with potential suppliers are advanced in countries such as Mexico, Argentina, Chile, Colombia and Canada, they are still looking for partners in the rest of the markets.
The arrival of Grupo Bimbo points out emerging trends in corporate climate leadership in Latin America. According to the International Renewable Energy Agency, the trend is driven by sharp cost reductions combined with growing calls for sustainability among investors and consumers. In the Americas, corporate sourcing of renewables represent a big opportunity as regional energy integration is progressing. Currently, 19 countries work towards regional energy integration under the framework of the Organization of American States as demand for energy is increasing rapidly among the middle income sector.
Supplying the electricity shortage by fossil fuels requires heavy investments in infrastructure while, increasing the proportion of energy generated from renewable sources and establishing transmission lines between the different countries could represent a saving of around 30,000 million dollars according to the Inter-American Development Bank.
There are challenges to achieve regional integration, mainly in the political area. However, countries are making notable progress working hand in hand with corporates. For example, Chile has already connected huge solar plants from Atacama desert – which records the largest solar radiation in the world – to the south of the country working with Enel Green Power and Convert. This can be the first step of a major one that can leap frog to a regional scale if electricity grids are connected to neighbour countries such as Peru, Bolivia and Brazil.
Below a map of how the dialogue is taking place among different sectors.