Sustainable Energy Policy - What is RE100?

Globally, there's a growing interest in environmental issues and sustainable energy. Among them, let's delve into RE100, exploring its significance and impact.

Concept and Origin of RE100

RE100 (Renewable Energy 100%)is a campaign where companies commit to sourcing 100% of their electricity consumption from renewable energy sources. It was launched in September 2014 by The Climate Group, a multinational non-profit organization based in London, UK. This campaign was initially started by organizations such as The Climate Group, CDP (Carbon Disclosure Project), and The Climate Group's Regen Hub, and now has over 300 companies participating.

Companies that have joined RE100 are increasing their renewable energy usage by purchasing RECs (Renewable Energy Certificates), implementing green premium systems, utilizing third-party PPAs (Power Purchase Agreements), investing in renewable energy projects, and building their own renewable energy facilities, all in response to the growing demand for renewable energy.

Such sustainable energy policies are considered crucial in the era of carbon neutrality, and many companies worldwide are participating in them.

Goals and Significance of RE100

RE100 ultimately aims to transition all global companies to 100% renewable electricity by 2050. This goal is being pursued as part of efforts to address climate change, which has accelerated following the Paris Agreement.

RE100 is not merely a campaign to improve corporate image but serves as a practical tool for reducing carbon emissions. In other words, companies that join RE100 are expanding the use of renewable energy to minimize carbon emissions generated during the production of their products and services, thereby actively responding to climate change.

This has led to increased global recognition of eco-friendly companies, and investors are showing greater interest in companies that practice sustainable management. Ultimately, RE100 plays a significant role in emphasizing corporate social responsibility and promoting efforts for a sustainable future.

Global Participation in RE100

As of April 2024, over 400 companies are participating in RE100, with 36 of them being Korean companies. This makes Korea the fourth largest contributor after the US (98), Europe (85), and China (43), and the number of participating companies is growing every year.

Particularly, leading global companies like Apple, Google, Microsoft, and Amazon are mostly participating, and in Korea, major companies such as SK Hynix, LG Energy Solution, and Samsung Electronics are also involved.

RE100 Membership Process and Requirements

To join RE100, you must fulfill the following procedures and requirements.

• Application Submission:Submit a completed application form through the official website. You must include information such as the company's annual electricity consumption and renewable energy usage goals.
• Review and Approval:After submission, the CDP (Carbon Disclosure Project) committee will conduct a review. The review process typically takes 4-6 weeks, and the approval decision will be communicated via email.
• Renewable Energy Usage Plan Development:Following approval, you need to develop a renewable energy usage plan. You must set targets such as 60% by 2030, 90% by 2040, and 100% by 2050, and provide specific plans to achieve these goals.
• Annual Performance Report Submission:By the end of March each year, you must submit a performance report detailing the previous year's renewable energy usage and future plans.
• Membership Fee Payment:Membership fees vary based on average annual revenue and range from a minimum of $1,500 to a maximum of $40,000.

By adhering to these procedures and requirements, you can join RE100, which can contribute to enhancing your company's image and strengthening its competitiveness.

Corporate Actions for Sustainable Energy Use

Companies can consider the following options to implement sustainable energy practices.

• Renewable Energy Procurement:The most direct approach is to purchase electricity from renewable energy generators. This enables companies to replace their entire electricity consumption with renewable energy.
• On-site Generation:Companies can also generate their own electricity using renewable energy sources like solar, wind, and hydropower. This helps reduce electricity purchase costs and carbon emissions.
• Energy Efficiency Improvements:Improving existing energy usage methods to enhance efficiency is another vital action. Replacing lights with LEDs, reinforcing insulation, and adopting smart metering can all help reduce energy consumption.
• Carbon Offset Purchase:If renewable energy use is not feasible, companies can offset their carbon emissions by purchasing carbon credits. However, this incurs additional costs, underscoring the need for proactive efforts in utilizing renewable energy.
• Supplier Engagement:Encouraging suppliers to join in reducing carbon emissions across the entire supply chain is a beneficial strategy. It is advisable to establish renewable energy usage targets with suppliers and collaborate on achieving them.

Economic Impact and Social Value of RE100 Participation

Participating in RE100 offers companies a variety of economic advantages and social value.

Economic Benefits

• Cost Reduction: As renewable energy prices continue to decline, the cost of purchasing renewable energy through RE100 participation is becoming cheaper than traditional fossil fuel-based electricity purchases.
• Enhanced Competitiveness: As awareness of climate change grows, consumers increasingly favor environmentally friendly products and services. By participating in RE100, companies can offer products and services that meet these consumer demands, thereby strengthening their competitiveness.
• Investment Attraction: Investors consider climate change responses as a key investment criterion. RE100 participation helps companies gain higher creditworthiness and stability, putting them in a favorable position for attracting investment.

Social Value

• Environmental Protection: By participating in RE100, companies can reduce carbon emissions, mitigating global warming and protecting the environment.
• Job Creation: The renewable energy industry is a rapidly growing sector, and RE100 participation allows companies to contribute to job creation within this field.
• Community Development: By collaborating with local communities to build renewable energy infrastructure, companies can contribute to community development. This strengthens corporate-community relationships and enhances brand image.

Future Outlook and Challenges of RE100

RE100 has established itself as a global movement to address climate change and is expected to expand further. However, there are some challenges that need to be overcome for the successful implementation of RE100.

Firstly, the high cost of renewable energy generation.

Currently, the cost of renewable energy generation is relatively higher compared to traditional fossil fuel-based power generation. This can be a burden for companies and is a factor hindering the widespread adoption of renewable energy. Technological advancements and economies of scale are necessary to address this cost issue.

Secondly, the instability of renewable energy supply.

Renewable energy generation fluctuates depending on weather and seasons, making stable power supply challenging. Alternative technologies like battery storage and hydrogen need to be utilized to overcome this issue.

Thirdly, government support and regulations play a crucial role.

Governments need to increase support for renewable energy generation and strengthen regulations on fossil fuels. Furthermore, international cooperation is necessary to expand the renewable energy market and establish global standards.

Lastly, corporate awareness and participation are paramount.

Companies need to acknowledge their responsibility towards climate change and actively participate in RE100. Beyond individual efforts, they should encourage suppliers and customers to adopt renewable energy and collaborate on carbon emission reduction initiatives.

Concluding Remarks

It is hoped that more companies will join the RE100 campaign in the future, taking the lead in environmental protection and enhancing global competitiveness.