COVER STORY, AUGUST 2007

GREEN MEANS GO
Industry expert urges companies to go green now or pay green later.
Christian Blattenberger

Everything’s bigger in Texas — including its carbon footprint, which is a measure of the amount of carbon dioxide emitted through the combustion of fossil fuels. Texas is the biggest producer of greenhouse gases in the country, accounting for 40 percent of total U.S. emissions — more than 670 metric tons.

Two-thirds of Texas’ carbon footprint is a result of burning high-carbon coal to create “dirty” cheap electricity. While Texans’ current energy procurement tactics are creating a big problem for the Earth’s future, Texas businesses can be a big part of the solution by going green now and avoiding costly mark-ups down the road due to increased demand.

Green energy usually refers to electricity derived from renewable energy sources. It’s well known that power from energy sources such as wind or solar is environmentally better than traditional sources like coal, oil or nuclear. What’s not well known is how easy it is for businesses to go green today.

Reasons To Go Green Now

There are obvious reasons for going green. The volatility of energy markets has spiked energy prices; the nation’s dependence on foreign oil has forced  Americans to accept prices set by foreign countries; and, the procurement of domestic sustainable energy gives America control of energy prices.

Green energy, such as solar and wind power, creates no emissions and poses virtually no risk to the environment. By using renewable energy, companies can help the environment and leverage their public image with a corporate stewardship role. However, what you may not know is that renewable energy sources actually tend to be more reliable electricity producers. Additionally, they are not subject to OPEC oil shortages, foreign price increases, natural gas supply concerns or nuclear power plant maintenance shutdowns.

In  light of all of the public attention that has centered around this issue over the past year, the United States and the rest of the world are starting to implement strategies to make a change. The White House, for example, recently proposed a strategy to deal with global warming. The federal government’s goal is to explore ways of limiting emissions from the world’s biggest polluting countries by year-end.

At the 2007 G-8 Summit hosted by Germany, global warming was the leading topic of discussion. There, world leaders explored federal mandates for companies to track their carbon footprints and purchase renewable energy. If mandates are set, the price of renewable energy will skyrocket quickly because demand will rise. This signals that it might be in your companies’ best interests to go green now.

Also, as the public becomes increasingly aware of Middle East turmoil and its impact on supply, demand, and cost, companies that make renewable resources part of their energy strategy win points with Americans. They are seen as part of the solution for weaning the U.S. off its foreign oil dependency.

Consumers already are becoming more discerning about where they shop, and often buy from companies that practice social responsibility. And, once businesses go green, customers expect them to stay green.

Green Business Sense

There are several ways companies can go green. The first part of going green is preventing further damage. There are a few ways companies can do this. One way is to purchase renewable energy credits (RECs). An REC is a tradable certificate of proof that electricity has been generated by a renewable source. With these, companies can make all or part of their energy renewable.

Purchasing renewable energy credits is one of the easiest ways companies can “green-up” today. Many businesses are unaware that RECs can be purchased anywhere. If a company’s stores are located in the East, they can still buy their credits from the West. The ability to shop in both regulated and deregulated states gives businesses the power to choose the energy source and price that’s right for them. Energy procurement specialists can help companies customize their renewable purchase.

Companies also can choose their renewable source — wind, solar, or biomass — which vary based on price. The percentage of selected renewables also will impact the cost. For example, if a customer is paying 8 cents a kilowatt for dirty power, it might raise the cost a fraction of a cent per kilowatt to include renewable energy. When those fractions of cents are multiplied over the number of kilowatt hours a company uses, they could potentially add up to tens of thousands of dollars annually.

For example, Cadence Network recently partnered with Office Depot to create what became one of the top 10 green energy programs in the U.S. Cadence helped the retailer replace 12 percent of its nationwide electrical consumption with environmentally-friendly energy sources — 51 percent wind, 48 percent biomass of recycled vegetative material and 1 percent solar — at its 1,019 stores. This is the equivalent to Office Depot planting more than 12,000 trees, removing 8,000 cars from the road, or eliminating approximately 100 million pounds of carbon dioxide from the atmosphere. This purchase of renewable energy was completed through Cadence’s aggregation model of buying energy in bulk to gain substantial discounts from its provider network, which includes one of the country’s largest alternative energy pools, then bundling them to create a cost-effective energy plan.

Companies should also ensure that the renewable product is Green-e Certifiable. Green-e is a not-for-profit organization that certifies renewable energy programs and companies that adopt them. The certification validates that the percentage of renewable energy an organization uses is coming from a trusted source. Using a generic source can damage credibility and question how serious the company is about going green.

Another good strategy for companies is to join the EPA Green Power Partnership Program. This program assists in gaining national exposure for company’s sustainability efforts, further leveraging public relations generated through the company’s environmental initiatives.

Tracking carbon footprints by measuring recyclability of products consumed in a company’s stores, such as whether the paper they use or the packaging in which their products are sold is recyclable, is the latest method companies are doing with help from an energy management firm or consultant.  Energies used in production and gas used by employees commuting are also accounted for. Gaining a sense of a company’s carbon footprint helps companies see the damage they caused, and it motivates them to improve.

With global warming awareness constantly on the rise, there’s no better time for businesses to go green. What Saudi Arabia is to oil, the U.S. is to coal — the dirtiest source of energy. If the U.S. is going to make an impact to save the environment, coal cannot be used at the magnitude it is today.

There are numerous business benefits to going green. For starters, legislation will eventually pass that requires all companies to use renewable energy, and RECs are currently inexpensive.

Companies should act now before Texas’ great blue skies take on an ugly shade of grey.

Christian Blattenberger is manager of energy procurement consulting for Cadence Network.


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