Apple Adapts Quickly to a Coal-Free Future

The new environmental progress report from Apple has been stirring up a lot of interest and deservedly so, because it demonstrates that a global company with a committed, flexible strategy can achieve a rapid transition out of fossil fuel dependency. The Apple renewable energy strategy is an inspiring achievement for companies that seek to establish a strong renewable energy profile, especially those located in the many parts of the U.S. that still depend heavily on energy from coal-fired power plants.

What's really interesting, though, is that Apple's renewable energy strategy hints at a new form of energy competition to come, as companies jockey for position to lay claim to local renewable energy resources.

Apple's renewable energy progress

The new progress report covers all the bases including energy efficiency and water conservation, but easily the most striking highlight is a 114 percent increase in Apple's renewable energy use worldwide between 2010 and 2012.

Globally, the figure now stands at 75 percent renewable energy among all Apple facilities. Some facilities, including data centers and the company's iconic Infinite Loop campus in California, are already at 100 percent.

To reach this mark, Apple has embraced any and all available forms of renewable energy, ranging from on-site installations to contractual agreements with renewable grid-supplied energy and local energy producers.

In that regard, Apple's strategy shares a basic bottom line principle with President Obama's "all-of-the-above" energy strategy. The fundamental goal is to ensure a reliable energy stream that enables growth and development. Apple shows that this goal is attainable, though on a corporate rather than a national scale, using only renewable resources.

Renewable energy highlights

Among the 100 percent renewable energy facilities described in the report is the new Apple data center in Maiden, North Carolina. It includes the largest user-owned, on-site solar power array and the largest non-utility on-site fuel cell installation in the U.S. (conventional gas-powered fuel cells use natural gas from fossil sources, but the Maiden fuel cells run on renewable biogas).

Apple is also working with Duke University to develop the state's renewable biogas resources, which includes copious amounts of hog farm biogas in addition to other sources such as landfill gas.

The company's newest data center in Prineville, Oregon, illustrates how companies without appropriate on-site locations can still avail themselves of locally generated renewable energy, at least where the regulatory structure permits it. In this case, Apple works with local utilities and renewable energy generators to obtain direct access to local wind, solar and geothermal resources, rather than purchasing the default mix of grid energy.

For its Newark, California, data center the company is also purchasing 100 percent renewable energy directly from wholesalers, primarily wind power.

Apple is also anticipating 100 percent renewable energy for its planned Reno, Nevada data center, which will rely primarily on solar and geothermal sources.

Preparing for a coal-free future

Though the U.S. Energy Information Agency predicts a relatively stable outlook for coal consumption through 2014, coal faces a tough future here. Pollution regulations for existing coal-fired power plants are tightening, to the extent that older plants are being forced to retire. Natural gas and renewable energy are both adding more pressure, evidence is mounting that the true cost of coal far surpasses its market price, and local communities are becoming more resistant to building new coal-fired power plants.

U.S. coal companies have been relying on the export market so far, but promising growth in that sector appears to be winding down. One canary in the coal mine is China, where local opposition to new coal-fired power plants has been growing more intense.

To further complicate things for the industry, "easy" coal is being tapped out in the U.S. The industry is becoming more reliant on extreme practices such as mountaintop removal, which involve coal companies in more costly compliance issues as well as more protests from local communities and environmental groups.

Against this backdrop, Apple's strategy of acquiring land for on-site renewable energy, as well as forming direct relationships with renewable energy generators, looks to a future of growing competition over local renewable energy resources.

After all, though it's tempting to think of renewable energy as an infinite resource, in terms of locally-generated availability, it is quite finite. Land is a finite resource, as are renewable biogas resources such as local landfills and livestock operations.

The competition for local renewable energy is bound to grow more intense, not only because it yields direct bottom-line benefits, but because renewable energy is beginning to play a role in consumer preferences.

As more renewable energy enters the national grid, competition for local generation will relax somewhat. However, the advantage will still go to companies that lock in local renewable resources, especially when it helps local communities transform an expensive waste management problem into a valuable asset.

That's one reason why Apple isn't the only global company eyeballing North Carolina for renewable biogas from hog farms. Google, for one, is breathing right down its neck.

[Image: Apple Environmental Progress Report, courtesy of Apple]

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