Amazon keeps firm lead on Bloomberg New Energy Finance's (BloombergNEF) clean energy deals list having signed 10.9 GW DC worth of power purchase agreements (PPA) in 2022, out of 36.7 GW DC the market intelligence firm counts having been contracted last year.
The 18% annual jump in contracts signed by public and private companies came even as the world dealt with global energy crisis, supply chain bottlenecks and high interest rates, taking the cumulative PPA capacity between 2018 and 2022 to 148 GW DC (see Over 31 GW Corporate Clean Energy PPAs In 2021).
According to its 1H 2023 Corporate Energy Market Outlook, BloombergNEF says 24.1 GW DC of 36.7 GW DC was signed up in the Americas (including both the US and Latin America), representing annual growth of 18%.
"Corporate clean energy buying has been an unwavering constant even as other aspects of ESG investing have come under scrutiny", said BloombergNEF's Head of Sustainability Research, Kyle Harrison. "Companies can access clean energy at scale in most major countries, the economics make sense, and amid turbulent energy markets, PPA's have become useful risk-mitigation tools for CFO's."
Corporates in the US leaned towards virtual power plant (VPP) arrangement to capture spot price by selling energy generated into the wholesale market and hedge themselves against power price spikes. It was the mining companies in Chile and Brazil that drove numbers in Latin America.
India and Australia led 4.6 GW DC capacity contracted in all of Asia Pacific as economies like Japan, China and South Korea warming up to the concept of PPAs. BloombergNEF expects activity here to grow significantly as more companies set up 100% renewable energy goals. According to the report, 56 new companies joined the RE100 movement in 2022.
Analysts count 397 RE100 members to have purchased an estimated 249TWh of clean electricity to date, but that's not enough as they will need an additional 290TWh in 2030 to meet their goals.
Energy crisis in Europe pulled down the deal signing spree of Europe, Middle East and Africa (EMEA) by 7% YoY to 8.1 GW DC. Analysts point out that during this period while some developers hiked their PPA prices, others preferred to sell energy generated into the wholesale markets to get better returns.
For 2023, they expect PPA activity in the EMEA to rebound with natural gas prices coming down and the EU undertaking power market reforms.
As for the largest offtakers, technology companies continue to demand the maximum clean energy to align with their growing electricity consumption. Amazon continued its position on the top with 10.9 GW DC capacity signed in 2022 including 8.7 GW DC solar, followed by 2.6 GW DC by Meta, 1.6 GW DC by Google and 1.3 GW DC by Microsoft.
Recently Amazon announced signing up for 8.3 GW renewable energy contracts in 2022 taking its total renewables portfolio to over 20 GW, which BloombergNEF counts as 24.8 GW (see Amazon's Total RE Portfolio At 2022-End Stood At 20 GW+).
Like in 2021, the US based AES Corporation was still the largest seller of clean energy in 2022 having publicly announced 2.8 GW DC of new PPAs. France's Engie signed 1.6 GW DC worth of deals while Spain's Acciona declared 1.1 GW DC.
Harrison added, "Developers that can provide firming and balancing services have access to a wellspring of corporate clean energy demand and are poised to be the biggest winners in this market."