Fueled by flexible PPAs, corporate clean energy purchases surged to 19.5 GW in 2019: BloombergNEF

Source: By Robert Walton, Utility Dive • Posted: Wednesday, January 29, 2020

With corporations increasingly focused on sustainability and clean energy procurement, their investments are leading to more renewable energy on the grid.

Since 2008, corporations have purchased more than 50 GW of clean energy, according to BNEF — an amount larger than the power generation fleets of markets such as Vietnam and Poland.

“The clean energy portfolios of some of the largest corporate buyers rival those of the world’s biggest utilities,” BNEF sustainability analyst Kyle Harrison said in a statement. “These companies are facing mounting pressure from investors to decarbonize.”

Credit: BloombergNEF

In September, Google announced a batch of renewable energy purchases through 18 deals across three continents, which was thought to be the largest corporate purchase of renewables ever. More recently, Amazon on Tuesday announced it had contracted for 82 MW of new solar generation to power its headquarters in Arlington, Virginia.

Flexible contract structures in deregulated markets are helping grow clean energy volumes, say experts.

“The appetite for corporate PPAs is on a trajectory that is up and to the right,” Ben Serrurier, senior manager of origination at Level 10, told Utility Dive. The firm connects commercial and industrial companies with utility-scale renewables projects.

Serrurier​ believes the “availability and flexibility” of PPAs is a major factor in fueling corporate buying. “They’re available in all centralized wholesale markets and are highly flexible as a contract structure, to scale up and down,” he said.

About 80% of U.S. corporate renewables purchases last year were done through a PPA, according to the BNEF report.

“There is a growing demand for that type of contract structure,” Serrurier said, compared with the more complex process surrounding requests for proposals in regulated energy markets.

BNEF data shows the Americas region represented 15.7 GW of corporate clean energy purchases last year, with 13.6 GW of that volume in the United States. The firm estimates 11.2 GW were signed under a PPA model and 2.4 GW were transacted under green tariffs offered by utilities in regulated markets.

While the technology sector is driving the largest portion of corporate buying, a growing number of oil and gas companies are also signing clean energy deals.

Occidental Petroleum, Chevron and Energy Transfer Partners all signed solar contracts in 2019, according to BNEF. ExxonMobil may have kicked off the trend with a 575 MW deal at the end of 2018.

“As the awareness for necessary climate action grows, there has been a greater attention placed on how material are company sustainability plans,” Serrurier said.

But the size of the technology sector is likely to keep it at the forefront of renewables purchases.

“Just by sheer size, data centers are such an increasing load and these are companies both culturally and through their leadership that are well-positioned to continue to [the] drive market,” Serrurier said.