On Thursday, fast-food giant McDonald’s announces its latest sustainability plans to pursue two new renewable energy projects. These projects are virtual power purchase agreements with Apex Clean Energy and Ares Management, and are based in Texas. One project will be solar-energy based, and the other will generate power using wind energy. And altogether, these projects are estimated to be able to power over two thousand stores.

So just how much energy will be produced in the project and what will its impacts look like beyond just the numbers?

How Much Energy Will Be Produced In The McDonald’s Sustainability Project?

According to the business’s calculations, these two projects can produce 380 megawatts (MW) of energy. To give that number some context, that could power more than 2,500 McDonald’s restaurants.

According to the Solar Energy Industries Association, one MW of solar energy can power about 164 American homes. That means that the energy output from this project has the potential to power about 62,320 homes.

However, this number can vary with differences in average sunshine, wind, and temperature that the solar panels endure. According to McDonald’s, this is contribution of renewable energy to the grid is more than any other restaurant company.

This agreement is also good for reducing greenhouse gas emissions. The restaurant’s power generation will aid in preventing 700,000 metric tons of greenhouse gas emissions. This amount of emissions would otherwise be created during energy generation processes using non-renewable means like natural gas or coal.

This is equivalent to planting more than 11 million trees. It is also comparable to taking over 140,000 passenger cars off the road for a year.

So, What Is A VPPA?

A business produces a surplus of energy that it would rather sell to the grid than use itself. The grid is the supply of energy sent to other users, like private residences.

To do this, the business partners with an offtaker, someone who wants the electricity the business wants to offload. (This is frequently an electricity supplier.)

In a VPPA where the energy involved in the transaction comes from renewable resources, the company also receives renewable energy certificates, or RECs.

Energy from coal and energy from solar panels look the same once put into the grid. RECs are essentially proof that the energy that the company is selling is derived from renewable sources. The energy supplier pays for the energy and the RECs in a contract that typically lasts around 15 years.

In short, this agreement gives McDonald’s an incentive to grow its renewable energy production. If this deal is a success, then it will majorly motivate other companies with the same scale as McDonald’s to make VPPAs as well and grow their renewable energy production.

McDonald’s Sustainability Goals Broken Down

Many businesses have sustainability goals that deal with reducing their carbon footprint or energy usage, or utilizing renewable sources of energy.

Companies frequently make announcements of new sustainability goals. With their frequency, it is easy to become desensitized to them.

More than half of Fortune 500 companies have such goals. What’s more is that many of these companies take no concrete steps towards achieving their goals. This seemed to be the position of McDonald’s before this week.

Back in 2018, McDonald’s announced its Scale for Good environmental sustainability campaign. The goals contained within included reducing greenhouse gas emissions by 36% by 2030, and a 31% reduction in emissions intensity per metric ton of food and packaging.

McDonald’s sustainability initiatives include a commitment to a 31% reduction in emissions intensity per metric ton of food and packaging, a promise made back in 2018.

According to the restaurant chain, this would “prevent 150 million metric tons of C02 equivalents (CO2e) from being released into the atmosphere by 2030.”

Additionally, it would be the equivalent of “taking 32 million passenger cars off the road for an entire year or planting 3.8 billion trees and growing them for 10 years.”

Like other Fortune 500 companies, these are lofty goals. Unlike a majority of other Fortune 500 companies, though, McDonald’s has taken a concrete step to achieving these goals by creating the VPPAs.

Looking Into The Future

Consuming more energy from renewable sources is a major step towards overall environmental sustainability and a step towards preventing further environmental damage.

With the announcement of this deal, hopefully other companies follow suit and make real, serious progress towards their own environmental goals.

Final Note: We encourage the McDonald’s team and other companies making a difference in sustainability to reach out at tips@mediusventures.com. We are always looking to work with companies to learn what they’re working on.