Apple has been making steady inroads into the energy business, so far for its own use.
Like other large, high profile businesses such as Amazon and Google, Apple has been increasingly investing in and sourcing renewable energies for its data centres and manufacturing and retail facilities, with the stated goal of achieving 100% renewable power for all its operations. [Engerati-Apple Generates its Own Power for Data Centres]
Indeed, back in 2014 Apple was named by Greenpeace as “the most innovative and most aggressive” company in Silicon Valley when it comes to setting and attaining environmental goals. [Engerati-Apple Gets Its Green On!]
The fruits of these efforts are bearing and according to Apple’s website, as of January 2016 the company was at 93% renewables worldwide – and 100% in 23 countries, including the United States, the UK, China and Australia.
For example, in China 40MW of new solar energy was completed and connected to the national grid last year, producing more than enough electricity for all of Apple’s offices and retail stores in that country. In Singapore the company is working with a local renewable energy provider, Sunseap, in a novel project to source energy from 32MW of solar panels on more than 800 city rooftops to run its local offices and its part of a shared data centre.
Beyond its own use, last year Apple also created a programme to support its partners around the world to reduce their energy use, power their facilities with clean energy and build high quality renewable energy projects. Activities under this programme include a 170MW solar project in Inner Mongolia and the construction by Foxconn of 400MW of solar over the next 2 years to cover the energy use of its iPhone final production facility in Zhengzhou. Overall, the goal is to install more than 4GW of new clean energy worldwide, including 2GW in China by 2020.
Apple Energy's proposition
But Apple’s energy activities have now taken a new turn. Through its subsidiary Apple Energy LLC, the company has been granted the right, effective from August 6, to sell energy, capacity and ancillary services at market based rates into the wholesale markets in the US.
In giving its approval last week, the Federal Energy Regulatory Commission (FERC) considered that Apple met the requirements for both horizontal and vertical market power in terms of its absence of utility affiliations and ability to unfairly influence power prices in the relevant regions.
According to Apple’s filing, the company owns the 19.9MW Fort Churchill solar array in Nevada which came into operation last year, 14MW of PV and 4MW of fuel cells at its Cupertino campus, and the 50MW Bonnybrooke solar facility in Arizona, which is due to come into operation later this year. In addition, the company has entered into a 25-year power purchase agreement with the 130MW California Flats solar project. [Engerati-Apple and Amazon Commit Big To Solar Power]
Apple also owns 67.5MW of solar and biogas operated by Duke Energy in North Carolina and a 3MW hydro plant operated by PacifiCorp in Oregon but these fall outside the FERC jurisdiction.
Apple and energy
Apple joins Google in being able to sell to the wholesale power market. Given Apple’s commitment to 100% renewables, Apple Energy’s wholesale market activities would presumably apply to excess beyond the company’s local requirements.
The question is what if any is Apple’s long term ambition in the energy sector? With for example the smartphone market reaching saturation, company growth is likely to come more from innovation than from untapped markets. Therefore, new revenue streams – such as energy – could be crucial in maintaining a company’s performance. With the legions of devoted Apple fans, the opportunity to purchase Apple energy could be compelling.
Apple has shown interest in the smart home, with its HomeKit platform for home control. [Engerati-Google And Apple Square Up For The Smart Home] However, this has been slow to take off with a slowly growing ecosystem of compatible devices and an energy offering alongside it could give impetus to Apple’s ambitions in this growing sector.
Apple has also been long rumoured to be developing an electric/self-drive vehicle. A natural component of this would be a charging network, which could be supplied with Apple owned energy.
It’s still early days for Apple Energy as a company but the energy markets are fast transforming and new opportunities are opening up as new entrants challenge the traditional utility model. With Apple’s strong brand presence, the company comes with a competitive edge to any activity it decides to become involved in.