Securing a Carbon-Free Future through Virtual Power
By Ryan Harty, Manager, Connected and Environmental Business Development, American Honda
Standing on this windswept stretch of central Oklahoma, it’s hard to imagine the connection this land will have to reducing CO2 emissions for an auto manufacturing plant a thousand miles east in central Ohio. But it’s our job to imagine the future we want to achieve. So the wind turbines that will soon dot this landscape are pivotal to Honda’s plan to reduce CO2 emissions from our North American auto manufacturing plants by more than 60 percent.
CO2 from burning fossil fuels over the past century has changed our climate. We need to change our business in response. We have to change the energy that powers not just our operations, but also our entire society, from fossil fuels to zero-carbon sources as soon as we can. Tackling CO2 emissions is the biggest challenge that our business and our society face today.
Honda’s 2030 Vision states that we will “lead efforts to realize a carbon-free society.” We’ve always invested in energy efficiency, and we’re generating our own renewable electricity onsite, including wind turbines at our transmission plant at Russells Point, Ohio. The two 400-foot high turbines produce more than 10% of the electricity consumed by the plant annually. To date, Honda has installed 7.3 MW of renewable wind and solar power at our facilities in North America. But it’s not enough.
While onsite renewable energy generation is a promising first step, our own sites can’t achieve the scale and speed of change that is necessary. The locations of our facilities don’t match the regions where renewable energy is strongest, and we don’t have enough space. To generate and buy renewable energy at the scale that we need, we looked to where the wind and the sun were the strongest, and where the electric grid was ready to use it.
Today, we are announcing two virtual power purchase agreements, or VPPAs, for solar and wind power that will generate more than one million megawatt-hours (MWh) of renewable electricity annually.
Today, we are announcing two virtual power purchase agreements, or VPPAs, for solar and wind power that will generate more than one million megawatt-hours (MWh) of renewable electricity annually. We will purchase renewable electricity from a new 120MW wind farm in Oklahoma and from a new 200MW solar facility in Texas, equal to the total amount of electricity annually consumed by our auto plants in Ohio, Indiana, and Alabama to offset 100 percent of the fossil fuel-powered electricity we use at those facilities.
VPPAs allow large customers like Honda to buy electricity from renewable sources anywhere in the U.S., offsetting our local sources of electricity that are generated primarily from fossil fuels. The clean energy does not go directly to Honda’s auto plants; instead, it goes into the electricity supply where the clean power is generated. Honda’s purchase of renewable energy adds more clean energy into the nation’s electricity grid. This reduces the amount of electricity that is generated by fossil fuels.
As a result, Honda receives renewable energy certificates (RECs) from the electricity markets for every megawatt-hour of energy that is generated. RECs verify that clean electricity has been generated. Honda gets credit for their use by applying and retiring RECs against the electricity that is used by our plants in Ohio, Indiana, and Alabama.
The end result is the same as if Honda had installed the renewable generation facilities at our own sites — the wind and solar facilities get built, and we successfully reduce our CO2 footprint. In this way, VPPAs are an extremely flexible method to help companies reduce their CO2 emissions.
Once fully operational, Honda’s VPPAs will offset 800,000 metric tons of CO2 emissions annually, the equivalent of 100,000 U.S. households worth of CO2 emissions from household energy usage.
Once fully operational, Honda’s VPPAs will offset 800,000 metric tons of CO2 emissions annually, the equivalent of 100,000 U.S. households worth of CO2 emissions from household energy usage. Together, these VPPAs represent the largest renewable energy purchase for any automaker to date, making Honda a leader in the adoption of renewable power for our operations.
Of course, our largest source of CO2 emissions is still from the combustion of fuel in the use of our products. While we’re currently America’s most fuel efficient automaker, according to the U.S. EPA, we’re imagining even greater change to reduce CO2 from our products. Electrification of our vehicle line-up is key to this goal. We intend to have two-thirds of our global automobile sales electrified by 2030. Today, we rely primarily on hybrids, but in the next few years we will expand our mix of battery electric and fuel cell electric vehicles. As we introduce more electric vehicles, we’ll seek to charge those vehicles using renewable energy as well.
These VPPAs represent the beginning of a change in how we power our products and operations with renewable energy at scale, resulting in significant CO2 reductions that our society needs.
These VPPAs represent the beginning of a change in how we power our products and operations with renewable energy at scale, resulting in significant CO2 reductions that our society needs. Ideally, we would purchase 100% renewable energy from our local utility, but that is not currently possible and we simply can’t wait. By employing VPPAs, we are able to meet our goals today.
Eventually, there may be no need for VPPAs as renewable electricity becomes ubiquitous. We can imagine and work toward achieving that future. Until then, we like the idea of these windswept expanses providing clean electricity for nearby communities, and reducing CO2 from auto plants a thousand miles away.
Ryan Harty is manager of Connected and Environmental Business Development at American Honda and leads the company’s renewable energy initiatives in North America.
 Honda products are made using domestic and globally sourced parts.
 We currently have a zero carbon supply agreement in place for one of our Ohio auto manufacturing plants. These VPPAs are in addition to that supply agreement.
 Based on U.S. EPA carbon equivalencies calculator. Does not include emissions from transportation or household food consumption. (https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator)