Can I get a large fries with those RECs? Today McDonald’s and a five-member restaurant group the North American Logistics Council (NALC) signed a virtual power purchase agreement (VPPA) to purchase renewable energy and REC certificates from a 189 MW Enel North America solar plus 88.2 MWh storage project in Texas.
The virtual PPA agreement and corporate aggregation purchasing power with logistics partners means the electricity load of McDonald’s USA’s entire logistics supply chain will be sourced from renewable energy resources going forward.
McDonald’s partners in the NALC group include the Anderson-Dubose Company, Armada, Martin Brower, Mile Hi Foods and Earp Distribution.
Located in Grimes County, Texas, about 71 miles northwest of Houston, Enel’s Blue Jay solar project is expected to be operational in 2023. Once complete, McDonald’s and its suppliers’ combined electricity purchase is expected to amount to average over 470,000 MWh of renewable energy each year. This is equivalent to over 80 million trucking miles driven each year.
The group’s combined purchase of 189 MW of renewable power, equivalent to more than 900 U.S. McDonald’s restaurants-worth of renewable energy per year, is intended to help the restaurant chain and NALC members meet their climate commitments.
“This deal is a unique example of how McDonald’s and its logistics partners are combining efforts to leverage their reach and scale to tackle supply chain emissions together,” said Bob Stewart, senior vice president and chief supply chain officer of McDonald’s. “We are excited about our collective potential to help address climate change and drive continuous improvement.”
According to the World Resources Institute, logistics supply chain emissions are categorized as Scope 3 emissions and account for 75% of all corporations’ greenhouse gas emissions, making emissions difficult to measure and address based on the transport and distribution of products.
“While major corporations are increasingly encouraging and advising their partners on how to reduce their carbon emissions, McDonald’s took it one step further by becoming the anchor buyer alongside its suppliers,” said Danny Fahey, vice president of U.S. strategy at Martin Brower, a logistics company with operations in 18 countries.
About 275 construction jobs have been created for Blue Jay Solar’s development, which is expected to generate more than $41 million in new tax revenue for state entities. Additionally, Enel is committing over $216,500 to fund STEM and upskilling programs for local schools and colleges in the Grimes County region since the start of the project’s construction began in May 2021.
Coho Climate Advisors advised the restaurant logistics group’s virtual PPA aggregation.
In September, McDonald’s signed an additional virtual PPA with EDF Renewables North America for energy from the 332 MWdc Apollo Solar project that EDF Renewables is constructing in south Texas. The solar project is expected to begin operations in June 2024.
In 2020 McDonald’s announced a climate pledge to achieve net zero emissions across its global operations by 2050. The company joined the U.N. Race to Zero campaign and signed the Science Based Targets initiative’s (SBTi) Business Ambition for 1.5°C campaign.
The first net zero McDonald’s was opened in 2020 at Walt Disney World Resort in Orlando, Florida. The building is covered with 55.8 kW of Onyx Solar photovoltaic glass, and also has vertical gardens to absorb the CO2 already present in the atmosphere.
Other recent VPPAs
German chemical producer BASF signed a 250 MW wind and solar power virtual PPA in August to offset the grid-supplied electricity used at more than 20 manufacturing sites in the U.S. The chemical giant is purchasing 100 MW of power generated by Dawn Solar. An additional 150 MW of renewable energy capacity will be added through transactions with EDF Energy Services.
Telecom company AT&T signed a VPPA in February for 155 MW of solar power from Vitol. The two VPPA agreements encompass an 80 MW and 75 MW solar project in Maryland and Pennsylvania, respectively. The deals support AT&T’s 2035 net zero goals and bring its total renewable energy portfolio to more than 1.7 GW.
Finnish paper packaging products company Huhtamaki signed a 42 MW solar virtual PPA in February to procure renewable energy under a 12-year agreement with NextEra Energy Resources. Under the agreement Huhtamaki is powering 30% of its North American operations with renewables.
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