Rivian CEO RJ Scaringe is fed up with companies hyping up their environmental credentials.
“There is too much greenwashing in the system,” he said in a recent interview. For Scaringe, it’s all too easy for a company to obfuscate the source of its energy consumption, especially when it’s not actually creating any new renewable energy capacity. And consumers aren’t savvy enough to tell the difference.
“This is so conceptually complex,” he said, making a clear distinction between companies that buy renewable energy to cover their own emissions while also creating new capacity and those that want to “pay a small incremental amount more to have the ability to pat ourselves on the back and say we are using renewable energy.”
Scaringe places Rivian firmly in the category of companies that want to not only eliminate their own carbon emissions, but also help create new capacity for the creation of renewable energy. To that end, he’s in Kentucky on Tuesday to announce Rivian’s support for building a new solar power center on top of a former coal mine.
Located on top of a hill in eastern Kentucky, the Starfire mine at one point saw hundreds of miners haul millions of tons of coal each year. But soon, it will be the site of a massive solar farm with the goal of creating 800 megawatts (MW) of power, enough to power 160,000 homes each year. BrightNight, a Florida-based solar company, is also building a 10-mile transmission line to enable an additional gigawatt of power capacity for the future.
Rivian will either be a purchaser of the project or a purchaser of the power generated at the site. The electric vehicle company is not directly financing the project, which is estimated to cost $1 billion, but has committed to buying 100 MW of power as part of a virtual power purchase agreement (PPA), virtual because the clean power won’t flow directly to Rivian’s electric trucks, SUVs or vans, or even to the company’s corporate offices or factories. Nonetheless, Rivian says the power will help “power up to 450 million miles of renewable driving each year.”
Rivian will either be a purchaser of the project or a purchaser of the power generated at the site.
Virtual PPAs are becoming an increasingly popular form of clean energy commitment for corporate America. In 2021, for example, corporations purchased a record 31.1 GW of clean energy, equivalent to more than 10 percent of all new renewable energy capacity added worldwide. this year. More than half of the deals came from tech giants, including Amazon, Microsoft, Meta and Google.
According to Scaringe, without these PPAs, many of these renewable energy projects could not get off the ground. Rivian may not be funding the solar project directly, but it makes sure there will be a market for the power when the PV cells come online. “If the companies don’t commit to buying the power, which then makes the project bankable, these projects won’t happen,” he said.
Rivian isn’t the first automaker to commit to buying clean energy through a virtual PPA. Stellantis signed a 400MW deal with DTE Energy in Michigan late last year, while Mercedes-Benz said it buy 140MW of an offshore wind farm in the Baltic Sea.
Virtual PPAs are “easily scalable and allow buyers to meet a large portion of their sustainability goals with a relatively small number of deals,” Rocky Mountain Institute wrote in a 2019 report.
According to Scaringe, without these PPAs, many of these renewable energy projects could not get off the ground.
Rivian has been at the forefront of the debate on electric vehicles and climate change, criticizing its competitors for being “far off the track” in reducing greenhouse gas emissions in a way that can meet the targets set by the Paris agreement. The company wrote a report earlier this year, along with Polestar, arguing that electric vehicles alone would not be enough to limit the rise in global temperatures. The auto industry should play a bigger role in increasing renewable energy in power grids and reducing greenhouse gas emissions throughout its supply chain.
But the company still has to go further. Rivian does not share its emissions data with CDP, a nonprofit organization that reviews companies’ environmental reports. Ford, for example, has obtained “TO” ratings for its climate change disclosures since 2019, while Tesla earned “F“The degrees. There is a growing chorus of environmental advocates demanding more transparency from corporations around the full picture of their carbon emissions.
Photo by Mitchell Clark/The Verge
Scaringe said Rivian is working towards “Scope 3 neutrality”, meaning it is aiming to remove all of its indirect emissions from its supply chain and the lifecycle of the electric vehicles it produces. A common criticism of electric vehicles is that they are only as clean as their power source; In other words, if an electric vehicle is charging from a grid that gets its power primarily from a polluting source, like coal, then it cannot claim to be a truly clean mode of transportation.
Rivian is targeting its Scope 1 emissions, from its factory and corporate offices, in part by installing a wind turbine at its plant in Normal, Illinois. Scope 2 emissions, from its electricity use, will need to be managed by creating “an upstream supply that will help offset” the emissions created by Rivian’s suppliers, Scaringe said.
But “90 percent” of Rivian’s emissions are Scope 3: its fleet of electric R1T trucks, R1S SUVs and EDV delivery vans. And those emissions are the reason the company agreed to buy 100MW of power from the solar farm in Kentucky, in addition to other PPAs. A virtual power deal for the company’s current and future customers, which Scaringe estimates will continue to grow as the company’s production capabilities mature.
“We create the supply that offsets the use of our collective fleet, and as the fleet grows, it becomes a huge consumer of energy,” he said. “In a few years, the Rivians car park will consume more energy than the entire country of Ireland.”