The Business Behind GM’s Pledge to Use Only Renewable Energy by 2050
GM has announced plans to use 100 percent renewable energy—via wind, sun, as well as landfill gas, among various other potential sources—by 2050.
Yes, in which’s more than 30 years away as well as a lot can change in in which time (maybe we’ll have flying cars!), yet the steps to get there aren’t just image-boosting gloss for shareholders, investors, as well as customers who are thinking about the company behind products such as the Chevrolet Volt as well as the completely new Chevy Bolt EV. This particular’s also not something in which’s going to bankrupt the company; with an eye to the future as well as the purse strings, This particular’s increasingly Great business.
According to GM’s 2015 Sustainability Report (the most recent such report), the company says in which its manufacturing as well as non-manufacturing facilities use 2.09 megawatt-hours of energy as well as produce 0.78 metric tons of carbon dioxide per vehicle. (Ford, for instance, has in which latter figure beaten for 2015, at 0.72 metric tons.) GM says in which This particular required 9 terawatt-hours of energy for its global operations in 2015.
As an intermediate step, GM aims to get 125 megawatts of its energy via renewable sources by 2020—including a massive rooftop-as well as-carport solar array at its facility in Shanghai, China, totaling 20 megawatts—as well as This particular may even exceed its target This particular year when two wind projects come online.
Ian Kelly, the manager of the Business Renewables Center, an effort of the Rocky Mountain Institute (RMI) in which helps companies procure renewable, off-site energy, assesses in which while those kinds of on-site generation are steps toward a virtuous goal, they’re the glamorous side of the solution. They don’t come close to replacing various other electricity-generation sources like natural gas or coal. At some point, GM will need to take a larger step as well as reach an agreement with or obtain a major interest in a very large solar farm somewhere to offset its full power demands as well as meet its goal.
Yet in which bigger step might not cost the company as much as This particular might seem. A 2012 paper via the National Renewable Energy Laboratory assessed in which renewable energy can provide 80 percent of U.S. electricity needs by 2050. Furthermore, GM already says in which This particular saves $5 million annually via using renewable energy; as more sources come online This particular estimates in which installation costs as well as the cost of the energy itself will continue to decrease.
“Natural gas prices are trending up, as well as electricity will continue to go up,” said Rob Threlkeld, GM’s global manager of renewable energy, anticipating in which over the long term, GM will see a savings of about 50 percent on its energy costs. “We’re definitely signing onto an amortization in which amounts to serious change.”
Enter the Big Business of Renewable Energy
inside shorter term, RMI’s Kelly points to the extended timeline for the federal government’s renewable energy production tax credit as well as business energy investment tax credit programs creating This particular particularly attractive for companies to take the plunge right now. Those tax credits benefit the owners of wind farms as well as solar arrays, yet the indirect benefit is usually to big-footprint manufacturing companies like GM, in in which they lower the cost threshold as the costs of the hardware continue to fall.
The critical mass of companies signing on, with help via organizations like the Renewable Energy Buyers Alliance, leads to a cascading effect, adding to the number of wind as well as solar sources in which are on the grid as well as creating a difference inside near term. “The second-order effect is usually in which when more companies do This particular, This particular starts to become normal,” Kelly said. “We’ve started off to reach a tipping point where This particular no longer seems fanciful.”
The definition of sustainability can change via one corporate report (or marketing campaign) to the next, experts agree, while renewable’s definition is usually more concrete. Jeremy Martin, a senior scientist with the Union of Concerned Scientists’ Clean Vehicles Program, notes in which certain biofuels might be defined as renewable by industry as well as government—yet might be sustainable by some definitions as well as not others. “There’s often a social-values component to sustainable,” he said. “They’re renewable because they’re made via a crop in which’s grown every year, yet whether they’re sustainable, well, This particular depends on who you ask.”
in which said, renewable energy is usually a closely watched product in which’s most definitely not tallied on the honor system. While an electron via a renewable source is usually just the same as an electron produced by an old coal plant, the former is usually backed up by the green-energy equivalent of a bank note. Through a federally regulated system, renewable energy certificates (RECs) get generated along with the renewable electrons. These are tallied by different REC-tracking systems, as well as there are REC brokers for special markets as well as particular energy sources.
However, as a company, if you want to prove you’re sticking to your guns on renewables, you need to “retire” these certificates by putting them on a list to get canceled out, so they can’t be sold in secondary markets. as well as in these days when going green can sometimes be more about the badging as well as interactive dashboard graphics than what actually goes into producing the vehicle, This particular’s an important differentiating factor as well as something to extol on the annual sustainability report.
Forming Alliances Toward Real Results
numerous corporations realize these are economies of scale to be had in renewable energy, as well as they’re entering joint commitments. GM’s announcement coincided with the company joining RE100, an initiative in which aims to help companies set efficiency as well as carbon-reduction targets. BMW is usually already a member, as is usually Tata, the parent company of Jaguar Land Rover.
Each automaker carries a different procedure for how deep they’ll go in holding their suppliers to the same standards. GM wouldn’t reveal how far its commitment goes within its supply chain, although This particular’s reasonable to assume in which Tier 1 (primary) suppliers will get some encouragement to do the same.
Over the long term, This particular could mean a massive cut in carbon emissions. The Union of Concerned Scientists estimates in which if automakers were to switch to an electricity grid with 80 percent renewable energy, then they could trim out 25 percent of the carbon emissions due to manufacturing an electric vehicle—the vehicle type with the largest manufacturing footprint today, when you include their battery packs.
Fueled (Not Just Made) By Renewable Energy?
Looming over This particular all, though, is usually This particular reality check: According to Cleaner Cars via Cradle to Grave, a 2015 report via the UCS, less than 15 percent of the lifetime carbon emissions for a gasoline vehicle (or less than a third for a full-size, Tesla-like electric vehicle) are due to manufacturing.
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“Obviously, we renamed our powertrains ‘advanced propulsion systems,’ ” said GM’s Threlkeld, who says in which the company is usually acutely aware of This particular. To in which, he says in which GM is usually committed to “decarbonizing the transportation sector,” not just with renewable energy for manufacturing yet with renewed attention to fuel cells as well as a focus on driving a decline in battery-technology costs.
If you’re actually concerned about the carbon footprint of your vehicle, don’t get too hung up on the idea of manufacturing impact. Choose your vehicle first as well as foremost on its efficiency at the fuel filler (or charging port); in This particular era of sustainability reports as well as evergreen corporate one-upmanship, the manufacturing side should keep improving.