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Miami, FL, April 21, 2021 – Atlas Renewable Energy, a leading renewable energy company in the Americas, announced today that it has signed a Collaboration Agreement with Hitachi ABB Power Grids, to jointly develop and execute Battery Energy Storage Systems (BESS) at a utility scale level for Atlas’ renewable projects.

This agreement will allow Hitachi ABB Power Grids to assist with the development of the best technical solutions regarding BESS and their interconnection during the development of a new project. Hitachi ABB Power Grids will be invited to participate in the tenders launched by Atlas Renewable Energy for the Engineering Package of the projects.

The main objective behind this agreement is to ensure that these energy storage systems can be successfully integrated into the design of new projects during the early development stage as an add-on to the plant depending on the needs it will serve. To do this, Atlas Renewable Energy has taken a more holistic approach by partnering with a company such as Hitachi ABB Power Grids, known for its capabilities in developing technical solutions regarding BESS and its expertise in rendering assistance for the integration of such technology in utility scale energy projects.

“We are very proud to count on Hitachi ABB Power Grids’ team of engineers once again, but this time during the development process of our pipeline. In the past, we worked together on introducing the first digital substation installed for a solar plant in Latin America. Now, we are going a step further into ensuring that all our new projects’ design will have the added value of being conceived with the best BESS and interconnection solution,” said Fabian Gonzalez, Director of Innovation and Operational Efficiency at Atlas Renewable Energy.

“Through this collaboration, Atlas Renewable Energy guarantees that the most optimal storage system is chosen and adopted into our renewable projects. Usually, choosing and installing the most appropriate BESS solution is an intricate and highly technical process, but if it is formulated from the start with proper planning and led by experts in integrated solutions, we will be able to ensure a more flexible, reliable and efficient battery implementation for our projects fleet,” added Gonzalez.

“At Atlas, we strive to be at the forefront of innovation, always looking to explore new ways to achieve the best results. Introducing batteries is an important step in further elevating our projects’ technological edge, but our main priority is to have a successful integration. That is why we decided to find an all-encompassing approach with Hitachi ABB Power Grids,” said Juan Jose Bonilla, Head of Business Development and O&M at Atlas Renewable Energy.

“We aim to provide an even more tailored solution for our large energy consumer clients, whose energy needs may differ and intermittency of renewables can still be a major concern. Offering clean energy with a unique storage solution for each one of our projects provides a differentiated value that gives significant reliability and efficiency to our clients,” added Bonilla.

“We look forward to collaborating on projects together with Atlas Renewable Energy that build on their deep experience with utility-scale renewable projects in Latin America and our own global Grid Edge Solutions footprint of more than 500 megawatts (MW) and 200 references,” said Maxine Ghavi, Head of Grid Edge Solutions at Hitachi ABB Power Grids. “Our proven technologies have enabled customers to create economic, social and environmental value by unlocking new revenue streams, maximizing renewable integration and lowering carbon emissions. As we look toward the future, we anticipate more need for more systems that support renewable smoothing and ancillary grid services.”

This is not the first time that Atlas Renewable Energy has partnered with a major supplier or technology provider to enhance the quality and efficiency in its projects. Just two years ago, the company announced that it would be the first generator in Latin America to roll-out the TrueCapture system developed by Nextracker throughout most of the company’s operating fleet. With the use of TrueCapture, the company’s solar plants tracking system has been optimized to the modular level resulting in an increase of the plants’ overall performance and efficiency.

Atlas Renewable Energy has also helped advance the region’s solar innovation by being one of the first developers to test bifacial modules and to introduce this technology on large scale withing its current projects under construction, which account for almost 1GW of capacity being generated with this cutting-edge panel technology.

These, among other technologies will enable Atlas Renewable Energy to build state-of-the-art renewable energy plants across the Americas and continue elevating the efficiency of solar energy, making this source of energy an even more reliable option to serve large energy consumers throughout the region.

About Atlas Renewable Energy

Atlas Renewable Energy is a renewable energy generation company that develops, builds and operates renewable energy projects with long-term contracts across the Americas. The current company portfolio is 2.2GW of contracted projects in development, construction or operational stages, and aims to expand by an additional 4GW in the next years.

Launched in early 2017, Atlas Renewable Energy includes an experienced team with the longest track record in the solar energy industry in Latin America. The company is recognized for its high standards in the development, construction and operation of large-scale projects.

Atlas Renewable Energy is part of the Energy Fund IV, founded by Actis, a leading private equity investor in the energy sector. Atlas Renewable Energy’s growth is focused on the leading emerging markets and economies, using its proven development, commercialization and structuring know-how to accelerate the transformation toward clean energy. By actively engaging with the community and stakeholders at the center of its project strategy, the company works every day to provide a cleaner future.

To know more about Atlas Renewable Energy, visit: www.atlasrenewableenergy.com

Miami, FL, March 31, 2021 – Atlas Renewable Energy, an international renewable energy developer with operations across the Americas, was awarded Latin America Sponsor of the Year by Proximo Awards on March 30, 2021, for its overall performance and commitment to accelerate the region’s transformation toward 100% clean energy. The company also took home the Latin America Solar Deal of the Year Award for its New Juazeiro Financial Deal, an innovative financing solution that comprises the construction of the Jacaranda solar plant in Brazil.

These two awards reiterate Atlas Renewable Energy’s great achievements and fast growth in the region. Recently, the company was also ranked as the top clean energy developer for Corporate PPAs in Latin America according to Bloomberg NEF’s 1H 2021 Corporate Energy Market Outlook, as well as occupying the sixth place globally with over a half of gigawatt contracted for private offtakers in the region.

Latin American Deal of the Year

Atlas Renewable Energy’s New Juazeiro Deal has been awarded Latin America Solar Deal of the Year for its unique pioneering financial structure marking the first time a Brazilian solar project has been fully financed in US dollars. This forward-thinking deal was possible through the collaboration with IDB Invest and DNB Markets, two great allies who have helped transform Latin America’s energy industry into a cleaner and more sustainable business. The deal also counted on the expert advice from White & Case and Machado Meyer Law Firms.

“We are very honored and proud to be awarded Solar Deal of the Year,” said Michael Shea Head of Structured Finance at Atlas Renewable Energy. “We’d like to thank IDB and DNB Markets for their support in creating such an innovative financial structure that will certainly prompt other international investors to see the opportunities that are not only offered in the Brazilian market, but in Latin America in general.”

“With this, we hope to continue exploring unique, tailor-made solutions to make clean energy attainable for large energy consumers in the Americas and continue building a more sustainable future for the region in alliance with reputable financial institutions that see Atlas Renewable Energy as a trusted and capable partner,” Michael added.

The New Juazeiro deal will finance the construction of Atlas Renewable Energy’s Jacaranda solar plant located in the municipality of Juazeiro, State of Bahia, Brazil. The project has been contracted under a Corporate PPA with the Brazilian subsidiary of Dow Chemical to provide clean energy to one of Dow’s largest production sites in the country. The plant has a capacity of 187 MWp and will generate about 400 GWh per year, which is enough to supply power to a city of over 75,000 inhabitants and will avoid approximately 35,000 metric tons of CO2 emissions.

Sponsor of the Year

Atlas Renewable Energy was also recognized as Sponsor of the Year due to the company’s notable growth in the region, accelerating the adoption of cleaner sources of energy and the relevance of the agreements signed during the year with major corporations in the mining and chemical sectors. These collaborations allowed Atlas to grow and double its capacity of contracted projects to 2.2 GW, of which a large portion have been enabled through corporate PPAs with private offtakers.

Furthermore, during 2020, Atlas Renewable Energy secured important financial deals in partnership with reputable institutions such as IDB Invest and DNB Markets to finance projects in Brazil, Mexico and Chile.  Most of them fell under the company’s Green Finance Framework sponsored by DNB Markets – a testament to Atlas’ commitment to developing projects that protect and preserve the environment while adhering to the highest standards of social engagement.

In collaboration with IDB Invest, Atlas developed one of its most ambitious social initiative: the female workforce program “We are all part of the same energy” in which the company is committed to train almost 700 women in the communities close to the company’s sites under construction and has established the target to hire 4 times more female labor during the execution of these projects.

“Apart from thanking Proximo for such recognitions, I would like to congratulate our team for their motivation to always strive for excellence; and recognize the financial institutions that have worked with us for not only partnering with Atlas in finding innovative financial solutions for our projects, but for also becoming our allies to earnestly address social issues and promote high standards and sustainable practices,” said Javier Barajas CFO of Atlas Renewable Energy. “It is a great honor for us to receive this award and hope it serves as evidence of Latin America’s thriving renewable energy market.”

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About Atlas Renewable Energy

Atlas Renewable Energy is a renewable energy generation company that develops, builds, and operates renewable energy projects with long-term contracts across the Americas. The current company portfolio is 2.2GW of contracted projects in development, construction, or operational stages, and aims to expand by an additional 4GW in the next years.

Launched in early 2017, Atlas Renewable Energy includes an experienced team with the longest track record in the solar energy industry in Latin America. The company is recognized for its high standards in the development, construction, and operation of large-scale projects.

Atlas Renewable Energy is part of the Energy Fund IV, founded by Actis, a leading private equity investor in the energy sector. Atlas Renewable Energy’s growth is focused on the leading emerging markets and economies, using its proven development, commercialization, and structuring know-how to accelerate the transformation toward clean energy. By actively engaging with the community and stakeholders at the center of its project strategy, the company works every day to provide a cleaner future.

To know more about Atlas Renewable Energy, visit: www.atlasrenewableenergy.com 

In recent years, reducing carbon emissions at the pace necessary to mitigate the impacts of climate change has emerged as a key challenge for policymakers around the world. While there are several approaches, one – carbon pricing – is gaining in popularity, and the indicators show that it will soon be widespread.

WHAT IS CARBON PRICING?

In short, carbon pricing is a means by which carbon pollution is given a cost that is then passed on to CO2 emitters through a tax or fee. It’s a simple economic principle: making something more expensive discourages its use. The idea behind carbon pricing is, at its heart, to give companies a financial incentive to lower their emissions.

The most basic form of carbon pricing is a carbon tax, which is a fixed levy per ton of CO2 equivalent (tCO2e) on the amount of carbon dioxide produced. Other initiatives include emissions trading systems (ETSs), which create a market in tax credits so that emitters can trade emission units with non-emitters. Meanwhile, offset mechanisms allow emitters to avoid carbon tax if they make parallel efforts to remove carbon elsewhere from the environment.

For its proponents, carbon pricing is the most efficient approach to cut emissions, as it immediately encourages cutbacks on any activity that emits carbon, and forces innovation of less-polluting alternatives. Set at the right level, a carbon tax on energy would quickly create an economic preference for natural gas, for example, over oil and coal, and for renewable energy over fossil fuels, thus driving forward the clean energy transition around the world.

That isn’t to say that everyone agrees with the concept. In many countries, from the United States to Australia and beyond, carbon tax proposals have been met with opposition. However, the number of jurisdictions that are putting a price on carbon, either via a carbon tax or through an ETS, is growing. Today, 46 countries and 32 subnational jurisdictions have implemented carbon pricing initiatives, up from 42 countries and 25 subnational jurisdictions in 2017. These include most of Europe, China, Canada, and South Africa, as well as the U.S. state of California.

The Latin American perspective

In Latin America, carbon pricing initiatives are currently in their infancy. As we see in the following graph, Mexico, Chile, Argentina, and Colombia already have carbon tax schemes underway, but they put a fairly modest price on each tCO2e of carbon – lower than Canada’s and South Africa’s and a fraction of the US$40-80 per tCO2e called for by the High-Level Commission on Carbon Prices to cost-effectively reduce emissions in line with the temperature goals of the Paris Agreement.

Because current climate change mitigation plans both in the region and globally still don’t add up to the emission-reduction levels needed to keep the global temperature increase below 2˚C, we believe that more and more governments will start to implement carbon pricing in the upcoming years and carbon taxes will most likely increase.

CORPORATE SUPPORT

Although carbon pricing has a direct, negative impact on corporate polluters’ profits, an ever-increasing number of companies are calling for it, as growing pressure from investors and consumers drives them to start taking emissions reduction seriously.

In the US, the Business Roundtable (BRT), an association of chief executive officers from more than 200 leading companies, has endorsed market mechanisms, including carbon pricing, to advance action on climate change. Even oil companies, including ExxonMobil, Shell, and BP have called for carbon taxes to be implemented, while Spanish multinational Repsol has gone so far as to establish its own internal carbon pricing of US$25 per tCO2e for new investments, going up to US$40 per tCO2e from 2025 onwards.

In fact, around the world, about 1,600 companies currently use internal carbon pricing to prioritize low-carbon investments and prepare for future regulation, or anticipate doing so within two years, according to a survey carried out by the Carbon Disclosure Project, an international non-profit organization. In many cases, they are using the proceeds to fund emissions reduction efforts: Microsoft, for example, uses the revenue from its internal carbon fee to fund renewable energy and is aiming to hit 100% renewable energy usage by 2025.

In June 2020, Bernard Looney, the CEO of BP, more than doubled his company’s carbon price forecast to $100 for the year 2030, stating that he believes countries around the world will ramp up the aggressive transition away from fossil fuels toward cleaner alternatives by the end of the decade.

Therefore, for those companies who don’t already have their own internal carbon pricing initiatives, or who haven’t taken into account the likely impact of carbon taxes on their bottom line, it is clear that it’s time to take action.

THE COST OF CARBON PRICING

As the world’s largest emitter, the energy sector is the most impacted by carbon pricing. We’re already starting to see the commercial failure of thermal energy generation as a result. Most recently, a planned 450MW expansion of Bosnia and Herzegovina’s state-owned thermal power plant – financed by a €614 million loan approved by China Eximbank – was described by the European Union’s Energy Community Secretariat as an “economic disaster”, since it was planned against a carbon price of €7 per tCO2e, whereas the current price in the EU is €25. 

Bosnia and Herzegovina is not an EU member state and does not yet apply carbon pricing. However, the European Commission is now preparing a carbon border tax, which will apply to the Western Balkans as well, thus making the financial success of the plant untenable.

However, it is not just utility companies and power producers that will be impacted by a price on carbon. Any price increase related to power generation will inevitably be passed downstream to customers, raising prices that businesses – and households – ultimately pay.  

The impact on large energy users

For energy-intensive industries, this presents a dual-threat. Chemicals manufacturers, textiles producers, and large industrial firms will not only be paying an additional tax based on their own emissions but will also be paying higher energy costs, as their electricity providers hike up prices to cover their own carbon taxes. According to a recent study by EY, the estimated impact of a carbon tax on overall industry production costs at a carbon price of US$25 per tCO2e will be an increase of 1.1%, with the bulk of this – 0.7% – made up by indirect costs, ie higher energy input prices.

Historically, studies have found that when the cost of energy comprises a larger fraction of the cost of production, companies find new ways to reduce energy costs, and this time will be no different. So far, 284 global brands, from ING to Unilever, AB Inbev, and the Kellogg Company have taken the step towards accelerating the transition to zero-carbon energy by committing to obtaining 100% of their power from renewable sources.

These companies can see what is coming over the horizon and are taking steps to reposition themselves. We believe this is a sensible decision: as the case of Bosnia and Herzegovina’s power plant shows, waiting until carbon pricing is implemented in their home nation may be too late, as decisions taken by other jurisdictions can very easily have a cross-border impact. 

BE PREPARED

While initial conversations around carbon pricing framed it as simply a regulatory imposition, it has become clear that not only are corporations behind the idea of reducing carbon emissions but so, too, are the general public. In a recent international survey of over 10,000 consumers in France, Germany, Italy, the Netherlands, Spain, Sweden, the UK, and the US, fully two-thirds of consumers said they wanted to see carbon labeling on products. 

As consumers around the world become more informed about the carbon footprint of the products they buy, and start to vote with their wallets, this isn’t a trend to be ignored. Fortunately, solutions to reducing reliance on fossil fuels are at hand. One example is through the power purchase agreement (PPA) structure, which means that corporate energy consumers can take advantage of better strategic energy sourcing decisions with the assistance of a knowledgeable and capable partner. This is the perfect opportunity to reduce the near-inevitable risk of carbon pricing initiatives on large energy users’ bottom lines. What’s more, in many markets, there are immediate cost savings to be had already, thanks to the competitive pricing of renewable energy. 

Carbon pricing, in our view, is inevitable, but fortunately, there are many ways companies can prepare to ensure they’re ready when the time comes.

On International Women’s Day and every day, Atlas Renewable Energy places diversity and inclusion at the forefront.

At Atlas Renewable Energy, we want to lead our sector in terms of gender balance, diversity, and inclusion (D&I). We’re pushing to challenge stereotypes, fight bias, broaden perceptions, and change attitudes – in our industry, our offices, and in the communities where we operate. We understand that to make a difference we need to go beyond awareness raising to addressing the issues from a more tangible perspective. Although there is still much to be done, here we present some of the initiatives we have developed to contribute toward equal opportunities.

CREATING CHANGE FROM WITHIN

When we launched in early 2017, we were immediately aware that we had key imbalances in regard to gender, with a small percentage of women and even less representation in the technical, managerial, and decision-making levels. And the problem wasn’t ours alone: across the wider renewable energy sector as a whole, women make up only a small percentage of the workforce. According to a study conducted by the International Renewable Energy Agency (IRENA) in 2019, women represent only 32% of full-time employees of the renewable energy workforce globally.

We believe that the fact that we operate in a male-dominated industry is no excuse. So we set about creating an internal culture that embraced inclusiveness and diversity right from the start, and we began to look for ways to transform our company into one that could be characterized by equality.

Our first step was to make our recruitment process more inclusive. We insisted that there should be at least one female candidate in every recruitment shortlist and that the overall candidate pool should be as diverse as possible. To avoid any kind of hiring bias, we asked our recruiters to present us with blind resumes, which mask not only the gender of candidates, but also their age, ethnicity, and location. 

Atlas Renewable Energy corporate employees working in the Santiago, Chile, office.

Our efforts have paid off: today, our corporate total headcount is 40% female, versus just 11% four years ago.

BREAKING DOWN STRUCTURAL BARRIERS

But simply getting more women into the company isn’t enough. In order to be truly gender-responsive, we implemented a series of measures to create a corporate culture based on equal opportunities, non-discrimination, and respect for diversity.

These include our unconscious bias training and D&I immersion program, which is provided to all staff members and focuses not only on gender distinctions but also seeks to challenge prejudiced ways of thinking that could unfairly influence decisions.

We also looked at the structural barriers preventing greater female participation in the workforce. The linkage between family responsibilities and decreased female labor force participation has been well-documented, and as job-protected maternity leave entitlements have been proven to keep women in work, we looked at international best practices and put in place maternity leave of six months at full salary. This initiative has been implemented in all countries in which Atlas is present, going in many cases further than what local regulations would require.

To avoid creating a bias against hiring women as a result, we also extended one month of parental leave to men – compared to the minimum paid paternity leave of five to eight days in many of the markets in which we operate.

Furthermore, in order to ensure we take into account all types of families, we also implemented adoption leave for our employees. 

Another structural barrier is around childcare. We don’t believe women or men should have to choose between caring for their children or prioritizing their own careers, so we implemented a monthly childcare allowance for children up to age three, which enables team members who choose to return to the workforce after having or adopting a child to do so.

When building diversity and inclusion policies, we believe that it is vital that they are consistent across the board. So, no matter whether our employees are based in Chile, Mexico, Brazil, or in the U.S., our structure remains the same to ensure that our commitment to equality is clear everywhere.  

WOMEN CANNOT BE WHAT THEY CANNOT SEE

The next part of our journey is around enabling Atlas’ female employees to advance in their professional and personal growth. To build on this, we have put in place a talent and mentoring program  to support their personal and professional growth, ensuring that we create a strong pipeline of female leaders for the future.

GOING BEYOND OUR OFFICES TO MAKE  A POSITIVE IMPACT IN LOCAL COMMUNITIES

Participants of the Female Workforce Program “We Are All Part of the Same Energy” in Maria Elena, Antofagasta Region, Chile.

Because of our geographical footprint and the impact we can make in the communities where we operate, we are in a strong position to mobilize our own contractors and work with local communities to promote similar values in female representation, and so we have embarked on a diversity and inclusion journey through an ambitious female workforce program, in partnership with local institutions and governments.

Under the name ‘We are all part of the same energy’, the program aims to improve local women’s access to employment and entrepreneurial opportunities by leveraging the economic development potential of the areas in which we are building renewable energy projects in order to create jobs.

So far, we are well on the way to upskilling at least 700 women from nearby communities into our assets currently under construction in Mexico, Chile, and Brazil. Using market studies, we identify skill gaps and job opportunities and then design our training to meet those needs. We then work to include a proportion of the women trained either into our own supply chains and mobilize our contractors to prioritize their inclusion in their hiring process or facilitate linkages with other industries in our area of influence.

It isn’t only gender equality that we are addressing in our markets. In many cases, we will be a neighbor to local communities for decades, so we have also implemented additional inclusion policies to ensure that everyone has access to the opportunities our projects can provide. We operate across diverse markets, and as a result, we are cognizant of the need to tailor our approach to the societal backdrop of the area in which we operate in order to have the greatest impact.

For example, at our Jacarandá project in Brazil, our hiring policies have been structured to ensure that at least 35% of the total workforce is made up of people of color, who are often excluded from employment opportunities because of racial discrimination. To date, 74% of the women and 79% of the men currently  employed at Jacarandá are of Afro-Brazilian descent, and overall, 56 women are employed in the construction of this project, accounting for fully 15% of the total workforce.  

Graduates of the Female Workforce Program “We Are All Part of the Same Energy” working in our Jacaranda Solar Plant in Juazeiro, State of Bahia, Brazil.

Meanwhile, as of the beginning of March, we have hired 95 women in our project in Sol de Desierto in Chile, representing 14% of the total workforce, and in Mexico, we have set up a training program to equip close to 300 women with a variety of skills, which we intend to replicate in Lar do Sol – Casablanca, an Atlas solar plant in Minas Gerais, Brazil.

A SYSTEMIC VIEW

At Atlas, our goal is to continue moving forward to become a benchmark in equality for our sector, and for the wider infrastructure and energy industries. 

Although the progress we have made so far is significant, there is still much work to be done. But by acknowledging the gaps and looking for tangible solutions, we aim to build a more equitable future, that allows everyone, irrespective of gender, ethnicity, age, background, or ability, to access equal opportunities.

The Biden administration aims to transform the United States into a 100% clean energy economy by 2050. We take a look at what this means for the renewables sector.

“At this moment of profound crisis, we have the opportunity to build a more resilient, sustainable economy – one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide” – President Joe Biden.

Upon taking office on January 20, President Joe Biden immediately got to work on his campaign pledge to shift the US towards a green future. Signing a series of executive orders, he ordered federal agencies to procure carbon-free energy, drive the development of clean energy technologies, and speed up clean energy generation and transmission projects. His administration wants to eliminate pollution from fossil fuel in the power sector by 2035 and from the wider US economy by 2050 and intends to spend US$2tn over four years to make that happen.

The climate plan proposed by Biden is set to result in significant changes in energy policy in the US. Here’s what to expect.

NO MORE ASSISTANCE TO FOSSIL FUEL DEVELOPMENT

The heavily fossil fuel powered grid generates 28% of US emissions, and the new president seeks to get this to zero, fast, by pausing oil and gas leasing on federal land and targeting subsidies for those industries as well as establishing aggressive methane pollution limits for new and existing oil and gas operations, which will likely drive up costs for already marginal US oil and gas drilling operations.

PRICING CARBON OUT OF THE MARKET

In a written statement to Senate Finance Committee members’ questions, Janet Yellen, President Biden’s nominee to run the Treasury Department, said: “We cannot solve the climate crisis without effective carbon pricing. The president supports an enforcement mechanism that requires polluters to bear the full cost of the carbon pollution they are emitting.”  A national carbon tax is expected to be implemented within the US, creating a direct negative impact on corporate polluters’ bottom line, and resulting in clean renewable energy becoming more competitive than traditional fuels. 

A RETHINK OF TRADE POLICY

In 2018, the Trump administration imposed a four-year, 30% tariff on imported solar panels, which prevented the deployment of 10.5 gigawatts of solar that would otherwise have been built, according to analysis from the Solar Energy Industries Association, the industry’s largest trade group. It has called upon President Biden to remove these tariffs, to help bring down prices in order to achieve its goal of providing 20% of US electricity by 2030, up from just 3% currently. While the new US administration is yet to make a move in this regard, pressure from US industry bodies is growing, and it’s likely that President Joe Biden will look to review the solar import tariffs in short order.

NEW INCENTIVES FOR RENEWABLE ENERGY

Extensions to existing tax credits for renewable energy are expected as the US government seeks to make its plan operational. As part of former President Trump’s Taxpayer Certainty and Disaster Tax Relief Act of 2020, the expiry of the production tax credit (PTC) for wind and certain other renewable energy technologies was pushed out a further year, to the end of 2021, while the phasing down of the investment tax credit (ITC), which is applicable to solar and certain other renewable energy projects, was frozen for two years.

As these credits remain vital for the development of the renewable energy industry and the continued potential for growth in the US as it seeks to recover from the economic impact of the pandemic, further fiscal incentives can be expected, with the potential for refundable credits being able to be leveraged in financing structures for renewable energy investments.

THE NUMBERS ADD UP…

Beyond policy implications, the practicalities of greening the grid of the world’s largest economy in just 15 years make this no mean feat: developers of renewable capacity will have to triple their installation pace from 2020’s rate immediately in order to hit Biden’s goal, according to a study from the University of California at Berkeley’s Goldman School of Public Policy. 

However, the researchers found that the continued decrease in the price of both solar and wind energy will mean that removing around 90% of the grid’s emissions by 2035 would lower wholesale electricity prices 10%, while improved battery storage will ensure the reliability of the US’ new, cleaner grid. In effect, President Biden’s plan is both financially and economically viable.

… FOR AN IMMINENT ENVIRONMENTAL INFRASTRUCTURE BOOM

Beyond academic research, capital market activity also indicates that positive sentiment is building behind President Biden’s plan. In the week before the president’s inauguration, alternative energy funds saw an inflow of US$4bn, according to Lipper data, as investors bet on a bright outlook for renewable energy firms. To put this into perspective, for the full year 2020, total inflows were just US$17.1bn.

AMBITIOUS PLANS

The scope and reach of the new administration’s clean energy agenda is certainly ambitious, but we believe that it demonstrates an alignment between the government and growing numbers of influential, globally recognized US companies, who have committed to 100% renewable power as part of the RE100 initiative. These companies, which include Apple, American Express, Facebook, General Motors, and Google, have already signed PPAs for renewable energy in numerous countries, inspiring many others to follow suit

Until now, however, the US was cited by RE100 members as a “challenging market” for corporate sourcing due to “a lack of leadership by the federal government”. With the Biden administration’s new climate policy, this is likely to change, and we expect to see a surge in demand from corporations across numerous industry verticals – from retail to manufacturing, heavy industry, and beyond.

It isn’t only corporate America that supports the energy transition: 90% of Americans, regardless of political beliefs, support solar, according to research done by the Solar Energy Industries Association (SEIA). 

The Biden administration’s climate and energy goals are bold, but the American Clean Power Association (ACP), a newly formed trade group, has stated that the renewable power industry is ready to help the country meet them, and at Atlas Renewable Energy, we are adding our voice to that of our colleagues in the US. 

Since 2017, we have developed, built, and operated large-scale renewable energy projects that have enabled the energy transition across Latin America. We were the first to implement a solar private PPA in Chile some eight years ago, and we’ve since continued to advance the adoption of renewable energy by large energy consumers. With one of the largest solar asset bases in the region, we signed a record 660MW in corporate PPAs in 2020, making us Latin America’s top developer in the region by contracted volume, according to Bloomberg. We’re already a trusted partner for US multinationals like Dow and Anglo American, and we look forward to supporting a growing number of companies to lower their CO2 emissions for a greener future across the region.

Around the world, consumer behavior is undergoing a dramatic change. Purchasing has become a political act, with those brands that seek to make the world a better place being rewarded by growing sales and increased customer loyalty. In this focus on Latin America, we look at how, as the region’s population seeks to buy the change they want to see for the future, companies must improve on sustainability and environmental issues – or risk losing out.

THE EVOLUTION OF THE GREEN CONSUMER

In recent years, shoppers worldwide have begun to understand that their purchasing power can make change happen. Consumers are calling for businesses to put their values on display, and rewarding those who align with their values.

This is a paradigm shift from the consumer activism of yesteryear when brand boycotts were a means of applying pressure on big firms. In a recent report by research firm Weber Shandwick on this changing landscape, it was found that 83% of consumers now prefer positive activism – showing support for companies by buying from them, rather than avoiding those whose practices they disagree with.

In today’s hyperconnected world, where purchasing decisions are influenced as much by social media as by advertising, the impact of consumer support on a brand’s reputation is immense. And while consumer activism takes many forms, it is increasingly a companies’ environmental and sustainability performance that shoppers are honing in on, with consumer insights company Nielsen calculating a near-50% jump in sustainable product sales in 2021, as compared to 2014. 

LATIN AMERICA TAKES THE LEAD

In its 2019 report, Nielsen found Latin America to be ahead of the global curve when it comes to sustainable consumption. Fully 85% of Latin American consumers said that they would definitely or probably change their consumption habits to reduce their impact on the environment – versus just 73% globally.

While the majority of consumer efforts are still focused on tangible gains – such as selecting products with recyclable or less packaging, a growing trend has emerged with consumers seeking out companies who go even further

In 2018, Colombian food company Tosh became the country’s first major brand to become certified as carbon neutral, offsetting 17,000 tons of CO2 each year and overhauling its branding to demonstrate its sustainability credentials to customers. Meanwhile, Brazil’s largest cosmetics multinational, Natura, strictly controls and monitors all carbon emissions relating to its packaging, logistics, production, and transport processes. And a few years ago Chile became the home of the world’s first carbon-neutral wine.

This focus on carbon neutrality is also starting to filter through to corporate energy consumption. In the face of consumer pressure to go green and reduce their impact on the environment, multinational consumer goods brands and manufacturers that have set up bases in Latin America must change their approach and rethink where they source their electricity needs from.

This is the beginning of an unstoppable transformation. Consumers no longer simply want sustainable products – they want the companies they are buying from to be sustainable all the way through their corporate operations. In fact, this trend is even more evident in Latin America than in other global regions, largely because the impact of climate change is already making itself felt – from melting Andean glaciers to extreme weather events. When asked by LAPOP’s AmericasBarometer how serious a problem climate change is in their country, 75% of South Americans and 82% of Mexicans and Central Americans characterized it as “very serious” – compared to just 40% in the United States and Canada.

This is also a generational shift – the latest Global Sustainable Shoppers Report carried out by Nielsen showed that 85% of Latin American millennials (those born in the 1980s and early 1990s) are concerned about how sustainable companies’ production processes are, versus 72% of their parent’s generation, the baby boomers. And if the upswing in climate activism we have seen from generation Z so far is anything to go by, this trend will only continue.

THE EVENTS OF 2020 ACCELERATED THE TREND

There is, of course, another factor driving increased consumer consciousness around sustainability. The COVID-19 pandemic has demonstrated unequivocally the relationship between humans and the natural world, as well as the degree to which everyone on earth is interconnected. As a result, for consumers, the sustainability agenda has taken on new importance. 

A recent survey by consulting firm BCG found that nine-tenths of consumer respondents said that they were equally or more concerned about environmental issues in the wake of the virus outbreak, and nearly 95% said they believed their personal actions could help reduce unsustainable waste, tackle climate change, and protect wildlife and biodiversity. Almost a third said that this belief had strengthened as a result of the crisis.

However, as companies continue to struggle with the lingering impacts of movement restrictions, supply chain disruptions, and slumping demand caused by the pandemic, prioritizing sustainability and environmental performance is, for many, last on the list.

We believe that would be a mistake. Consumer pressure isn’t going away – it’s only increasing. Companies that sideline their efforts now are likely storing up risks for the future, while those that choose to re-engage with sustainability initiatives will gain a distinct competitive advantage.

RENEWABLE ENERGY – A SOLID STRATEGY

A pragmatic way to achieve the kind of sustainability that consumers increasingly expect is to look at what can garner the greatest impact on carbon emissions. For the vast majority of companies, that’s their energy consumption, which is why, right across the region, a growing number of firms are shifting to renewables, and civil society is stepping up to support them.

Indeed, companies in Latin America are at a comparative advantage versus many of their counterparts around the world. Ample renewable resources along with an enabling regulatory framework in many countries have paved the way for more and more corporate energy users to go green. 

This growing interest has driven a surge in the number of corporate power purchase agreements (PPAs) for renewable energy, with 2019 witnessing a threefold increase in deals signed. A tailor-made contract between a corporate off-taker and a power producer, renewable PPAs allow companies to purchase or generate enough renewable energy to match 100 percent or more of their electricity use over the course of the year, allowing them to ensure the very basis of their operations is sustainable. 

Our team, for example, was the first to implement a solar private PPA in Chile some eight years ago, and we’ve since replicated this success in Brazil and Mexico. In 2020, Atlas Renewable Energy signed over 660MW in corporate PPAs in Latin America, making us the top developer in the region by contracted volume, according to Bloomberg. As companies adjust to new consumer demands, we’re seeing an increasing number of inquiries by business leaders asking how they can harness renewable energy to meet their ESG objectives. The numbers are clear: According to a recent study by Stanford University which looked at the impact on companies’ carbon emissions by switching to renewables, a 100% solar strategy would reduce annual carbon emissions by as much as 119% of a company’s carbon footprint – leading to a huge leap forward in its environmental performance. 

The new green consumer of today doesn’t just want to know the origins of what they buy, or how it’s packaged. They want to see real commitments by companies that they are doing everything they can to minimize their impact on the environment. Sustainability is no longer an add-on, and we believe that a solid energy strategy with renewables at its core should be a foundational pillar of a companies’ efforts to respond to consumer demands.

Even as the Covid-19 pandemic drove the global economy into a recession, 2020 was a good year for renewable energy as an asset class. With new tailwinds promising to bolster the sector, we believe that 2021 will see an even greater upswing of interest from the capital markets.

Despite numerous headwinds, the global economy continued its transition toward renewable energy in 2020, with a record amount of new installed capacity around the world. The health of the sector stood in sharp contrast to both infrastructure and fossil fuels, and the subsequent flight to quality translated into floods of capital as installations continued to rise in spite of the economic and social disruptions caused by the coronavirus pandemic.

Overall, low-carbon investments – which cover renewable power and other technologies that reduce reliance on fossil fuels – increased by 9% in 2020, according to an analysis by Bloomberg New Energy Finance (BNEF). And this upward trend looks set to continue. According to a recent survey by Octopus Capital, global institutional investors plan to increase their allocation to green energy from 4.2% of their overall portfolio to 8.3% in the next five years, and 10.8% in the next decade. 

AN ATTRACTIVE OPTION

One of the key drivers behind this is the surging demand for clean energy amid political pressure to meet the ambitious objectives of the Paris Agreement, an international climate commitment to keep the global temperature increases below 2%. According to Goldman Sachs, meeting those commitments will require up to US$30tn in clean-energy infrastructure investments by 2040 alone. The investment bank expects this clear growth trajectory to push spending for renewable power projects above spending on upstream oil and gas this year – the first time in history that this has been the case.

PREDICTABLE, STABLE, AND COMPETITIVE

But beyond growing demand for renewables, there are numerous other factors at play that are driving greater numbers of investors to enter the sector. The first is its stability. Traditional energy producers rarely enter pricing contracts that span decades. Renewables producers, on the other hand, can, thanks to the inexhaustibility of their energy sources.

The Octopus Capital poll, which covered investors from across the globe with combined total assets of US$6.9tn, found that more than half of respondents view the predictability of green energy as a reason to capitalize on the market. Historically, and as was best illustrated with the unprecedented day in 2020 when the oil price turned negative, prices of fossil fuels, and by extension, fossil fuel-based electricity, have been wildly volatile. 

The cost of renewables, meanwhile, has become increasingly competitive with fossil fuels, as new technologies including bifacial solar panels and trackers are helping improve efficiency. Consequently, the levelized cost of energy (LCOE) from solar has plummeted from US$359 in 2009 to an average of US$40 a decade later – an 89% drop. According to Marcel Alers, UNDP head of energy, “It is now cheaper to go solar  than to build new coal power plants in most countries, and solar is now  the cheapest electricity in history.”

Investors are also being drawn in by the promise of outsized government spending and tax breaks for green projects, as economies worldwide seek to return to growth. For example, upon taking office, newly-elected US President Joe Biden unveiled a US$2tn clean energy investment plan, aiming for 100% clean electricity by 2035. Meanwhile, on the other side of the Atlantic, the European Union’s Green Deal includes US$572 billion earmarked for spending on green projects, among them renewable energy generation. 

RISK VERSUS REWARD

Another factor is the risk involved in fossil fuels versus renewables. A recent study by the University of Oxford’s Institute for Energy Studies asked institutional investors including asset managers, hedge funds, and private equity investors in the US and Europe what the minimum hurdle rate they would require to invest in different energy projects, and found that investors are now expecting higher risks in oil and gas projects in comparison to solar and wind projects. 

Indeed, for 2021, Goldman Sachs puts the hurdle rate for today’s fossil fuel projects at up to 20%, versus just 3-5% for renewables, demonstrating not only that issues such as the potential for stranded fossil fuel assets have become a key concern, but also that renewable energy is no longer seen as a fringe bet, but rather a mainstream asset class.

The macroeconomic outlook also favors renewables. As governments continue to implement Covid-related financial packages, interest rates are set to stay lower for longer. Meanwhile, stalled economic expansion has resulted in a general scarcity of high-yielding investment opportunities, leaving investors seeking out long-term, low-risk investment – which renewable projects, and solar in particular – offer in spades.

As a result, half of the investors surveyed by Octopus Capital said they expect renewable energy to generate market-beating net annual returns of 5-10% over the next 12 months, and fully 80% saying they plan to increase allocations in this sector over the next three to five years.

In Latin America, we are seeing a similar trend play out as investors seek out opportunities in renewables to meet their quest for yield. In particular, projects with revenue opportunities that are contracted for longer periods of time, and for a greater proportion of generating capacity, are becoming increasingly attractive.

GOING GREEN HAS BECOME AN IMPERATIVE

The near-inevitability of carbon pricing as well as growing pressure on firms to report on climate risk have also seen investors begin to refine their portfolios in order to avoid future losses, shifting away from fossil fuels, both upstream oil and coal, and replacing these with green plays. 

According to BlackRock, the world’s largest asset manager, from January through November 2020 investors in mutual funds and ETFs invested US$288bn globally in sustainable assets, a 96% increase over the whole of 2019. In his recent 2021 letter to CEOs, Larry Fink, the firm’s chairman, and CEO announced the firm would now implement a “heightened-scrutiny model” in its active portfolios as a framework for managing holdings that pose significant climate risk, including flagging holdings for a potential exit.  

Certified green investments in line with standards such as the Green Bond Principles and Green Loan Principles are also taking hold within the market. At Atlas, we have implemented our Green Finance Framework in our recently announced projects, and we are seeing a growing trend in the number of investors who seek to participate in green finance instruments, including bonds and loans.

Accordingly, as investors take stock of the extent to which climate risk is investment risk, renewables projects have become an attractive alternative for infrastructure and energy investors alike.  

A BRIGHT FUTURE

Against all odds, the global shift to renewables continued apace last year, and this trend shows no signs of slowing. Given all the growth ahead, we believe that renewable energy offers the potential for market-beating returns in the months and years to come, and we expect to see no shortage of interest from investors looking for stable, predictable investments that align with their ESG-related goals.

Miami, FL, Feb.  22, 2021 – As presented by Bloomberg NEF’s 1H 2021 Corporate Energy Market Outlook published on Jan. 26, 2020, Atlas Renewable Energy ranked as the number one clean energy developer selling renewable energy to corporate buyers in Latin America during 2020 and occupied 6th place globally with over half a gigawatt contracted for private offtakers in the region.

This success includes a landmark long-term Power Purchase Agreements (PPA) that Atlas Renewable Energy contracted with Anglo-American, a natural resources multinational, which will procure clean energy to its operations in Brazil from the Casablanca project, Atlas Renewable Energy’s 349MW solar plant in Minas Gerais. Casablanca is the largest bilateral solar PPA signed in Latin America to this date.

Similarly, Atlas Renewable Energy signed another groundbreaking project with the Brazilian subsidiary of one of the largest petrochemical multinationals, Dow Chemical. The energy for that project will be sourced from Atlas Renewable Energy’s Jacaranda solar plant and will provide clean energy to Dow’s operations in the state of Bahía under a novel deal structure that addresses solar intermittency and provides a 24h energy offering by swapping the excess solar energy during the day with other clean energy sources that can produce at nighttime, thereby serving a continuous energy load.

Both projects fall under these companies’ strategy to attain ambitious sustainability goals, aiming to reduce a considerable amount of their CO2 emissions and clean their energy matrix, a trend that is rapidly being adopted and implemented in Latin America by large energy consumers in the natural resources and chemical sectors. And, importantly, both projects are uniquely characterized by equally pioneering and ambitious social community engagement programs promoting diversity and inclusion.

“We are extremely proud of the growth that Atlas Renewable Energy has consistently been able to sustain over recent years, repeatedly offering tailor-made energy solutions to our clients. Going forward, we see ourselves continuing to innovate in this space to reduce the carbon footprint of companies and institutions, while also reducing their energy bill.” said Carlos Barrera, Atlas Renewable Energy’s CEO. “The private sector is becoming more conscious about the need to operate sustainably. As such, procuring clean energy has become essential for large energy consumers, and Atlas can support them to find creative and smarter solutions to accelerate their adoption of cleaner sources of energy.”

According to Bloomberg NEF’s report, which tracks corporate clean energy trends, Corporate PPA activity in Latin America in 2020 totaled 1.5GW, of which 1,047MW was procured in Brazil, the region’s largest economy and clean energy market. Brazil PPA volumes nearly doubled from 2019 and

solar contracts accounted for nearly 80% of this growth, driving a strong trend towards solar energy at the regional level.

With these deals, large mining and chemical companies in Brazil dominated Latin America’s corporate procurement landscape in 2020. Global miner Anglo American was the largest corporate offtaker, based on Bloomberg’s report, followed by the Brazilian subsidiary of US-based multinational Dow Chemical.

With this major achievement, Atlas Renewable Energy looks to the future to continue supplying clean energy to big energy consumers across the Americas, accelerating the region’s transition toward clean energy, while promoting best practices and elevating the industry standards.

About Atlas Renewable Energy

Atlas Renewable Energy is a renewable energy generation company that develops, builds, and operates renewable energy projects with long-term contracts across the Americas. The current company portfolio is 2.2GW of contracted projects in development, construction, or operational stages, and aims to expand by an additional 4GW in the next years.

Launched in early 2017, Atlas Renewable Energy includes an experienced team with the longest track record in the solar energy industry in Latin America. The company is recognized for its high standards in the development, construction, and operation of large-scale projects.

Atlas Renewable Energy is part of the Energy Fund IV, founded by Actis, a leading private equity investor in the energy sector. Atlas Renewable Energy’s growth is focused on the leading emerging markets and economies, using its proven development, commercialization, and structuring know-how to accelerate the transformation toward clean energy. By actively engaging with the community and stakeholders at the center of its project strategy, the company works every day to provide a cleaner future.

To know more about Atlas Renewable Energy, visit: www.atlasrenewableenergy.com

In recent years, renewable energy has undergone a dramatic decrease in cost and is now more competitive than fossil fuels in many markets. In 2021, we believe that this decline, combined with sweeping policy changes across the globe and a renewed corporate focus on sustainability in the wake of the Covid-19 pandemic, will lead to a massive global growth opportunity in renewable energy. Here’s why.

THE US RETURNS TO PARIS

One of the immediate priorities for the newly inaugurated Biden-Harris administration is swift action on climate change. On his first day in office, President Joe Biden signed a sweeping executive order to rejoin the Paris Agreement, as part of a plan for the US to hit zero emissions by 2050. The agreement, which the former administration officially withdrew from in 2020, aims to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels by reducing carbon dioxide and other greenhouse gas emissions through the year 2050. 

According to a recent note by Jahnavi Nadipi, a Platts Analytics North American power markets analyst, the US will need as much as 238GW more solar and wind power to meet the agreement’s targets – more than double its current installed capacity. To meet this, President Biden has put in place an ambitious investment target of $2 trillion in clean energy infrastructure over the next four years, boosting the near-term outlook for the renewables sector.

CHINA PLANS TO DOUBLE GLOBAL RENEWABLES CAPACITY

At the end of 2020, Chinese President Xi Jinping set out concrete plans to achieve net-zero carbon dioxide emissions for the first time. The country plans to achieve 1.2 TW of renewables capacity by 2030 – an amount equal to the current global total installed solar and wind capacity. The China Photovoltaic Industry Association (CPIA), the country’s main solar industry group, says it expects to see 70-90GW of new solar added each year up to 2025.

THE WORLD AIMS FOR NET ZERO

Beyond the world’s two largest economies, a wave of commitments from other Paris Agreement signatories, including Canada, India, the European Union, Japan, South Africa, and South Korea, have put the Agreement’s 1.5°C goals within striking distance for the first time, according to the Climate Action Tracker (CAT). In a clear signal to financiers, investors, manufacturers, and project developers, governments are now seeking a faster expansion of renewable power sources in order to meet these tighter targets.

AUCTIONS UNDERWAY IN LATIN AMERICA

The recent pace of clean energy growth in Latin America shows no sign of abating. The Colombian government will offer 5,000 MW of capacity in its third renewable energy auction in the first quarter of this year, taking it from less than 50 MW of installed renewables in 2018 to more than 2.8GW by the end of 2022. Meanwhile, in May, Chile will launch an auction for 2.31 TWh of renewables and storage.

RENEWABLE DEALMAKING PICKS UP

The increased political impetus to meet ambitious climate targets hasn’t passed energy companies and utilities by, and many spent 2020 shifting their focus to sustainability-focused business. In Latin America, Atlas Renewable Energy signed a total of 660MW in corporate PPAs – a record figure, making us the top developer in the region by contracted volume for 2020, according to Bloomberg. 

In March, we signed the largest-ever solar energy purchase and sale contract in Brazil with mining conglomerate Anglo American, helping it achieve its strategy to use 100% renewable energy for its operations in Brazil as of 2022. In June, we signed a 15-year agreement with material science giant Dow to provide it with clean energy from our 187MWp Jacaranda solar project, located in the municipality of Juazeiro in Bahia State, Brazil. The plant will generate 440GWh per year, which is enough to supply power to a city of over 750,000 inhabitants, enabling Dow to get closer to its renewable energy sourcing goals. 

This is a global trend. In the US, Dominion Energy and Duke Energy shelved their joint Atlantic Coast Pipeline project, while Dominion has sold its gas transmission and storage business and announced a series of additions to its solar portfolio. Meanwhile, French oil major Total’s energy transition strategy continues apace, with the acquisition of a 20% stake in India’s Adani Green Energy, the world’s biggest solar developer. 

INVESTORS FLOCK TO CLEAN ENERGY

2020 saw global stock markets roiled by the Covid-19 pandemic, but the clean energy industry held firm, with the S&P Global Clean Energy Index notching up an impressive 135.4% increase over the year. According to the International Energy Agency (IEA), shares in renewable equipment makers and project developers outperformed most major stock market indices over 2020, while the value of shares in solar firms has more than doubled since December 2019. With Goldman Sachs announcing its expectation that renewable power will become the largest area of expenditure in the energy sector in 2021, surpassing upstream oil and gas for the first time, we expect this trend to accelerate, as major investors seek to capitalize on the upswing in demand.

LARGE ENERGY USERS GO GREEN

Commitments by major corporates to reduce their emissions have trickled in over recent years, but 2020 saw market leaders convert promises into action – driving up demand for further renewable capacity. In May 2020, 155 companies — with a combined market capitalization of over $2.4 trillion —signed a statement urging governments around the world to align their COVID-19 economic aid and recovery efforts with current climate science. In July, Microsoft along with AP Moeller-Maersk, Danone, Mercedes-Benz, Natura & Co., Nike, Starbucks, Unilever, and Wipro created the Transform to Net Zero initiative, with the tech firm committing to develop a portfolio of 500 megawatts of solar energy projects in under-resourced communities in the US. Meanwhile, Google pledged in September to achieve 100% renewable energy by 2030, while Apple’s newly-launched Supplier Clean Energy Program has seen 71 manufacturing partners in 17 countries commit to 100% renewable energy for the tech giant’s production as it commits to transitioning the electricity used across its entire manufacturing supply chain to clean sources by 2030.

RECORD INCREASES IN PROJECTS COMING ONLINE

During the height of the pandemic, when overall power demand sank, renewable power’s share of the grid surged, and this trend is set to continue. According to the IEA, almost 90% of new electricity generation in 2020 was renewable, with just 10% powered by gas and coal, putting green electricity on track to become the largest power source by 2025, displacing coal. In the US, the Energy Information Administration’s (EIA) latest inventory of electricity generators, developers, and power plant owners shows 39.7 GW of new electricity generating capacity will start commercial operation in 2021, with solar accounting for the largest share of new capacity at 39%, followed by wind at 31%.

COVID RECOVERY MONEY HEADS TO RENEWABLES

Despite the pandemic and consequent global recession, decarbonization plans continued through 2020, demonstrating the acceptance of the need for climate action no matter the economic backdrop. With Covid-19 stimulus money now on the table, the International Finance Corporation (IFC) says that supporting low carbon investment and renewables generation capacity could generate a US$10.2tn investment opportunity, create 213 million jobs, and reduce greenhouse gas emissions by 4bn tons by 2030.

FUELING THE NEW NORMAL – NO GOING BACK

Taken together, all of these trends indicate a strong 2021 – and beyond – for the renewables sector. As the global economy charts, a path toward a new normal, clean energy can power a green recovery that leaves no-one behind. And with increased demand, a favorable regulatory framework, and rising investor appetite for green projects, we believe that the outlook for the industry is brighter than ever before.

Across Latin America, companies have woken to the need for embedding sustainability into what they do. But, as the climate change clock keeps ticking, we’re seeing business leaders start to ask how to tackle this issue on a larger and more impactful scale, and we believe that this conversation is one that’s worth having.

The latest World Economic Outlook, published in October by the International Monetary Fund (IMF), shows that we’re at a pivotal moment in history. At the current rate, global temperatures will increase “well above the safe levels agreed to in The Paris Agreement, raising the risk of catastrophic damage for the planet”, it remarks and adds that the window for attaining net-zero emissions by 2050 is rapidly closing. The time for action is now.

Companies make and ship almost everything we buy, use, and throw away, and therefore play an outsized role in global emissions. In recent years, we’ve seen businesses around our region start to look seriously at sustainability, and the buy-in from employees and consumers alike has been encouraging.

However, we believe that unless companies make a decisive shift to tackling the key CO2 emissions elements in their business, the majority of their efforts will not make enough of a difference.

SUSTAINABLE PRACTICES BEYOND THE OFFICE

In recent years, we’ve seen how going green has become an integral part of day-to-day office life, as companies around the region have put in place policies from installing energy-saving light bulbs in buildings to promoting the use of alternatives to single-use plastic. The paperless office idea has taken root, and recycling containers are now in most professional workplaces. Meanwhile, a growing number of firms are pushing the use of sustainable building materials, such as recycled furniture and carpets made from recycled materials, in their offices. We’re also seeing companies start to demand greener manufacturing practices from their suppliers, too, while others have started to promote the safe disposal of the products they make.

These steps are obviously positive. Companies adopt green practices create positive brand associations among consumers and boost the morale of employees who believe in what their company is doing. But do they make a real difference?

LATIN AMERICAN COMPANIES WANT TO DO BETTER

Each year, the S&P Global Corporate Sustainability Assessment assesses sustainability practices across 124 actively participating companies from Latin America. For the third consecutive year, businesses in the region have increased their participation in the CSA, from 38% of those invited in 2018 to 46% in 2019, which proves a growing number are willing to address and improve their sustainability performance. In fact, the participation rate for Latin America is above the global participation rate, demonstrating that there’s a real trend underway for companies to do better.

The progress they’re making, however, is slow. The S&P assessment looks at a number of sustainability dimensions, but on the environment and climate strategy, Latin American companies are well below the global average, showing that although they’re actively seeking to cut down on emissions, there’s still more they could be doing.

ENERGY MATTERS

From an emissions standpoint, Latin America is different from many other global regions, as the bulk of its greenhouse gas production is from land use and agriculture, rather than from energy. However, this is set to change quickly, as economic growth and its rising middle class are expected to drive up energy demand to at least 80% higher than present-day levels by 2040, according to the Inter-American Development Bank, leading to total emissions caused by power generation reaching approximately 2 billion metric tons of carbon dioxide equivalent (MTCO2e) per year.

In order to offset that, you would need to switch 76 billion incandescent lamps over to LEDs or recycle 680 million tons of waste. As a result, the small-scale initiatives being carried out in offices in an attempt to go green are just a drop in the ocean.

It’s clear that only by reducing energy emissions are companies going to be able to minimize their carbon footprint, and this is something more and more business leaders are beginning to think seriously about.

MAKING THE GRADE

Since many companies have already done as much as they can to reduce their overall energy usage, switching to renewable energy presents the best and most far-reaching way of cutting emissions without compromising on performance and adding significant cost reductions. While figuring out how to harness the power of renewable energy to achieve emissions reduction goals may seem like a daunting task, the good news is that business leaders don’t need to become experts in energy sourcing in order to do so.

At Atlas Renewable Energy, we’re starting to hear from a growing number of firms who are committed to making a real difference to their carbon footprint. It’s not just the usual suspects in the most-polluting industries, either: companies in every sector across Latin America, from retail and manufacturing to heavy industry and beyond, know they need to do more on sustainability. The region still has a long way to go, but we think the tide is turning, as more business leaders wake up to the need to take real action on corporate sustainability. Is your company ready to take the next step?