Published on February 7th, 2019 | by Joshua S Hill
February 7th, 2019 by Joshua S Hill
Corporate clean energy procurement levels skyrocketed in 2018 according to a raft of new reports which highlight the continued dominance of the technology and data industry in driving clean energy purchasing and the increasing importance of the wind energy industry in supplying the necessary clean energy.
Bloomberg New Energy Finance last week kicked off reporting on corporate clean energy procurement in 2018 , revealing a record 13.4 gigawatts (GW) of electricity signed through Power Purchase Agreements (PPAs) by 121 corporations in 21 different countries around the globe. This shattered the 2017 level of 6.1 GW signed and served to position corporations alongside utilities as the biggest buyers of clean energy in the world.
“Corporations have signed contracts to purchase over 32 GW 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,” said Jonas Rooze, head of corporate sustainability for BNEF.
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.
Two reports published at the end of January to coincide with BNEF’s reporting show that wind energy was purchased at record levels in 2018, both in the United States and abroad in Europe.
Specifically, the American Wind Energy Association (AWEA) revealed that “America’s growing demand for renewable energy by purchasing a record amount of wind power in 2018” with non-utility customers such as AT&T, Walmart, ExxonMobil, and Shell Energy purchasing a record 4,203 megawatts (MW) of wind power capacity in 2018 through PPAs. Further, contracted wind capacity from non-utility customers in 2018 was 66% higher than the previous high water mark set in 2015, and wind energy is providing more electricity to corporations than any other renewable energy source.
“A rapidly growing number of big brands and utilities clearly understand that for American consumers, it’s no longer enough for energy to be affordable and reliable, it must also be clean,” said Tom Kiernan, CEO of AWEA. “Businesses are responding to their customers by seeking out the lowest-cost clean energy they can find to power their products and operations reliably. Wind power’s record-setting 2018 proves you really can have it all.”
A similar trend is being seen across the Pond in Europe, with companies signing nearly 1.5 GW of new wind energy PPAs in 2018 and bringing the cumulative signed wind energy capacity up to 4.7 GW since 2013. In fact, according to the European wind energy trade body, WindEurope, wind energy accounts for 85% of all corporate PPAs in Europe, with clean energy procurement led by the region’s aluminum sector.
“Corporate PPAs are booming,” crowed WindEurope CEO Giles Dickson. “Industrial consumers across a range of sectors have now bought nearly 5 GW of wind energy via PPAs. 2018 saw a record number of new deals, and the first PPAs in the automotive sector and in pharmaceuticals – and the first in Germany, Spain and Poland. In Germany Mercedes are now going to use wind to power their EV and battery factories – what an advert for the Energiewende!
“It shows industrial consumers see wind power as competitive and reliable. And it’ll help allow industry to reduce its energy costs. The CO2 benefits are big too: industry accounts over half of Europe’s electricity consumption. But some countries still have barriers to PPAs. They’ll have to remove them under the EU’s Clean Energy Package. And they should say how in their National Energy Plans this year.”
Crossing back over to the United States, a report published Monday by Wood Mackenzie Power & Renewables showed that big-name technology and data companies like Facebook, Google, and Amazon are leading corporate clean energy procurement, with the industry remaining the largest segment of corporate and industrial (C&I) clean energy purchasers. Specifically, Facebook, Google, and Amazon have a combined market share of 35.1%.
“2018 was a banner year for corporate procurement of renewables,” said Colin Smith, Wood Mackenzie Power & Renewables Senior Analyst. “C&I procurement drove a combined 22% of solar and wind PPAs signed in 2018 and solidified its place as a major driver of renewables in the U.S. This is a significant development within the industry. C&I has always been a major driver of wind projects, but it is now a major driver of solar projects too.
“With so many companies pledging carbon reduction targets or signing the RE100 pledge to achieve 100% renewable electricity sourcing, peer pressure is growing among companies to be the most sustainable within their sector. After announcing 1.5 GW of procurement in 2018, Facebook is the largest offtaker of front-of-the-meter wind and solar in the U.S. Google is only 58MW behind Facebook, with Amazon rounding out the top three.
“However, as additional corporations pledge to procure 100% renewables, the leading share could shift from the data and technology segment to the industrial segment.”
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