Industry News


Clean Power Purchasing


Corporate clean energy buying surged to new record in 2018


Corporations purchased 13.4 gigawatts of clean power through long-term contracts, more than doubling 2017’s total, helped by demand from new industries and previously untrodden markets


C


orporations bought a record amount of clean energy through power purchase agreements, or PPAs, in 2018,


shattering the previous record set in 2017. Highlights included a wave of smaller corporate energy buyers aggregating their purchases, and the first corporate clean energy power purchase agreements in markets such as Poland. BloombergNEF (BNEF) finds in its 1H 2019 Corporate Energy Market Outlook, published today, that some 13.4GW of clean energy contracts were signed by 121 corporations in 21 different countries in 2018. This was up from 6.1GW in 2017, and positions companies alongside utilities as the biggest buyers of clean energy globally. Jonas Rooze, head of corporate


sustainability for BNEF, said: “Corporations have signed contracts to purchase over 32GW of clean power since 2008, an amount comparable to the generation capacity of the Netherlands, with 86% of this activity coming since 2015 and more than 40% in 2018 alone.”


More than 60% of the global


activity in 2018 occurred in the U.S., where companies signed PPAs to purchase 8.5GW of clean energy, nearly triple the amount signed in 2017. Facebook spearheaded a contingent of experienced U.S. corporate energy buyers, purchasing over 2.6GW of renewables globally in 2018, primarily with utilities in regulated U.S. markets through programs known as green tariffs. This was three times that of the next biggest corporate energy buyer, AT&T. ExxonMobil became the first oil


major to sign a clean energy PPA for its own operations, purchasing 575MW of solar and wind in Texas. Mexico and Brazil also saw growth in corporate procurement, rounding out the 9.1GW of clean energy purchased by companies in the Americas region in 2018.


In the U.S. a major feature was the emergence of smaller, first-time corporate clean energy buyers. In 2018, some 34 new companies signed their first clean energy PPAs, making up 31% of total activity in


Corporations have signed contracts to purchase over 32GW of clean power since 2008, an amount comparable to the generation capacity of the Netherlands, with 86% of this activity coming since 2015 and more than 40% in 2018 alone


the U.S. 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. Kyle Harrison, a corporate


sustainability analyst for BNEF and lead author of the report, said: “The aggregation model has heralded in a new generation of corporate clean energy buyers. These companies no longer need to tackle the complexities of clean energy procurement alone. They can share risks associated with credit and energy market volatility with their peers.” In the Europe, Middle East and


Africa (EMEA) region, corporations also purchased record volumes of clean energy, inking deals for 2.3GW and doubling the 1.1GW signed in 2017. The Nordics were once again the hot spot for activity, with companies attracted to strong wind resources and credit support from government bodies. Aluminium producers Norsk Hydro and Alcoa Corp purchased the most clean energy in Europe in 2018, but the region also saw activity from multinational technology companies such as Facebook, Amazon and Alphabet subsidiary Google. Several European countries that


saw little or no corporate procurement activity in 2017 enjoyed a rise in interest in 2018. Companies signed PPAs for the first time in Poland, and just the second time in Denmark and Finland. There were also new deals signed in the U.K., following a lull after the expiration of a national subsidy program. Several requests for proposals and changes in policy suggest burgeoning new markets in Germany and France as well. In the Asia-Pacific (APAC) region,


Figure 1: Global corporate PPA volumes Source: BloombergNEF. Note: Data in this report is through 2018. Onsite PPAs not included. Australia sleeved PPAs are not included. APAC number is an estimate. Pre-market reform Mexico PPAs


are not included. These figures are subject to change and may be updated as more information is made available. 12 Forest Bioenergy Review Spring 2019


still a nascent market for corporate procurement, companies signed a record 2GW of clean energy PPAs, more than the previous two years combined. Nearly all of this activity occurred in India and Australia, with roughly 1.3GW and 0.7GW of clean energy purchased, respectively. Both markets allow companies to buy clean energy at a


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20