BloombergNEF has been keeping track of corporate PPAs since 2008. Till 2018, the world has seen more than 32 GW of clean power being purchased by companies. It finds 86% of this activity has been reported since 2015 and more than 40% in 2018. (Source: BloombergNEF)
- A January 2019 report by BloombergNEF charts the growth of corporate PPAs signed for renewable energy across the world and finds 13.4 GW worth of such agreements were signed in 2018
- A total of 9.1 GW of this number was signed in the Americas, with the US accounting for 8.5 GW alone
- Europe Middle East and Africa (EMEA) region added 2.3 GW to this statistic as Nordic nations took the lead here
- India and Australia contributed another 2.0 GW from the APAC region as these nations enable buying clean energy at a large scale through offsite PPAs
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2018 turned out to be a remarkable year for power purchase agreements (PPAs) signed by corporates amounting to a whopping 13.4 GW and increasing from 6.1 GW recorded in 2017.
BloombergNEF (BNEF) provides this number in its 1H 2019 Corporate Energy Market Outlook report and says it was signed by 121 corporations in 21 different countries. This phenomenon makes companies alongside utilities as the biggest buyers of clean energy globally, it says.
Corporates in the US signed up for over 60% or 8.5 GW of the 13.4 GW number, which is triple the amount signed in 2017. All of Americas region contributed 9.1 GW of the cumulative led by the US, Mexico and Brazil.
Globally, it was Facebook that alone purchased 2.6 GW of renewables last year, most of it with US utilities, followed by next biggest corporate energy buyer AT&T. BNEF points out that ExxonMobil became the first oil major to purchase 575 MW of solar and wind in Texas through a clean energy PPA for its own operations.
Another 2.3 GW was purchased by corporates in Europe Middle East and Africa (EMEA) led by the Nordic nations primarily for wind resources. Here, Norsk Hydro and Alcoa Corp, both aluminium producers purchased most clean energy in Europe in 2018, while Facebook, Amazon and Google were also pitching in. Other regions that reported increased corporate PPA activity on the continent include Poland, the UK, Denmark and Finland.
In the Asia Pacific (APAC) region, such agreements were an aggregate of 2.0 GW, nearly all of which happened in India (1.3 GW) and Australia (700 MW). What works in these locations is the freedom to buy clean energy at a large scale through offsite PPAs, ‘making them rarities for the region’ said BNEF.
Things are looking up for offsite corporate PPA mechanisms in China where a renewable portfolio standard (RPO), expected to be cleared soon, will offer over 30,000 large commercial and industrial companies renewable electricity targets.
Since 2008, corporate PPAs add up to more than 32 GW of clean power, which is close to the entire generation capacity of the Netherlands, according to Jonas Rooze, BNEF Head of Corporate Sustainability. At least 86% of this activity has been reported since 2015 and more than 40% in 2018 alone.
Pointing out an emerging trend, the report says 2018 saw the emergence of smaller, first-time corporate clean energy buyers, a total of 34 new companies, making up 31% of total activity in the US.
“These firms are aggregating their electricity demand to reap the economies of scale from larger solar and wind projects. In many cases, they benefit from partnering with a bigger, more experienced buyer – known as an anchor tenant – who can offer a stronger balance sheet and expertise on accounting and legal nuances when signing a PPA,” the authors of the report explain.
Companies are seriously pursuing the clean energy path and joining alliances as RE100 that encourages them to have 100% renewable energy targets. In 2017, participating companies of this forum consumed an estimated 189 TWh of clean energy. By 2030, to be able to meet their RE100 targets, BNEF needs to purchase an additional 190 TWh of clean electricity. Offsite solar and wind PPAs could help meet the shortfall with an estimated 102 GW of new solar and wind built globally.
Another market research firm Wood Mackenzie sees corporate solar power procurement in the US a trend to watch out for in 2019 (see Wood Mackenzie: ‘Only’ 103 GW PV In 2019).