Monday, 30 April 2012

Low-Carbon Energy: Not Just for Treehuggers

Not so long ago, few organisations would have invested in renewable energy systems to power their operations.  Those that did, like HSBC or Google, did so for largely for publc relations or CSR purposes, or because senior managers were also committed environmentalists.  Rarely was it possible to make a more traditional business case for such investments.

How times have changed.

As the New York Times reports, the U.S. military, not known as a bastion for tree-huggers, has embraced renewable energy on its largest bases.  Fort Bliss, the largest Army base in America, is as large as a small state, and recently completed a $1 million investment in solar photovoltaics. Next year will likely see the start of construction on a new 20 MW solar farm, enough to power an entire town. This system is part of a longer term plan that includes wind turbines, heat pumps, and waste-to-energy systems.  All of these, together with aggressive energy efficiency measures, are intended to help the base achieve "net zero" energy consumption, as well as net zero water and waste, by 2018.  It shares this goal with Fort Carson in Colorado, but Fort Bliss faces a special challenge, with the number of troops stationed at the base expected to triple by 2015.

The U.S. Army is not investing millions into renewable energy for the corporate social responsibility benefit.  It is not doing so for stakeholder engagement. Rather, these technologies simply make financial and operational sense.  Renewables have higher up-front costs than fossil fuels, but have considerably lower running costs.  With fuel prices likely to continue rising into the future even as budgets shrink, renewables represent a long-term investment in financial cost management by the military.  What is more, using renewable energy on a widespread basis on the country's largest bases gives soldiers and staff operational experience using these technologies.  Military planners expect renewables to become more useful in field deployments in future, so the more comfortable soldiers are using them before they head overseas, the better.

The military is not alone in their newfound appreciation of renewable energy. As the cost of PV panels has fallen, the justifications for going green continue to multiply.  Renewable energy systems not only help to achieve CSR and staff engagement goals, but they can also ensure reliability of supply and provide long term price stability to help the finance director sleep at night.

Times have changed.  The greener option is increasingly the option that makes the most business sense.  Just ask the U.S. military.