In December 2015, General Motors (GM) agreed to buy wind power from EDP Renewables to power more than half of a vehicle assembly line in Arlington, Texas.

Key Details

• GM signed a power purchase agreement (PPA) for 30 MW of the 250-MW Hidalgo Wind Farm located in West Texas and expects it to be operational in Q4 2016
• The renewable energy will be used to produce the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade SUVs in the Dallas suburb
• GM also announced plans to power three Mexico facilities with wind energy
• Once operational, the U.S. and Mexico wind facilities will allow GM to exceed its commitment to use 125 MW of renewable energy by 2020
• GM has saved more than $80 million from “green” energy purchases and investments since 1993, when it started its renewable energy initiative

Implications

The majority of new wind capacity is now being procured directly by corporate customers. In general, corporate purchasers of renewable energy are not willing to pay a premium over retail rates for renewable power. Instead, they seek projects that make economic sense. As well, there is a preference to be a part of the addition of new capacity rather than buying existing RECs. This has led to corporate purchases of solar and wind PPAs totaling 3,440 MW in 2015—a roughly threefold increase over 2014.

Additional Information
Reuters: GM Buys Wind Power from EDP to Build Its Biggest SUVs

WSJ: Companies Go Green on Their Own Steam

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