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Tech giants dominate green PPAs
GLOBAL
LARGE corporations signed 19.5 GW of wind and solar power purchase agreements (PPAs) in 2019, up over 40% on 2018, as they faced major pressure from investors and regulators to decar- bonise and promote sustainability.
Data from Bloomberg NEF (BNEF) showed that more than 100 corporations in 23 different countries bought 19.5 GW through PPAs, com- pared with 13.6 GW in 2018.
The total represents 10% of all solar and wind capacity added in 2019, with total project invest- ments standing at $20-30bn, BNEF said in its 1H 2020 Corporate Energy Market Outlook.
The biggest buyers included major technol- ogycompanies,whosedatacentresrequirelarge amounts of electricity. Google signed 2.7 GW of contracts in 2019, including its September announcement to buy 1.9 GW, the largest single announcement ever by a corporation.
Facebook bought 1.1 GW in 2019, with Ama- zon accounting for 900 MW and Microsoft 800 MW.
While such technology companies might be expected to champion green energy, oil majors have also made major commitments to renewables.
Occidental Petroleum, Chevron and Energy Transfer Partners all signed solar contracts in 2019, following the example of ExxonMobil, which bought 575 MW at the end of 2018.
“Corporations have purchased over 50 GW of clean energy since 2008. That is bigger than the power generation fleets of markets like Vietnam and Poland. These buyers are reshaping power markets and the business models of energy com- panies around the world,” said Jonas Rooze, lead sustainability analyst at BNEF.
The news comes as many large companies and investors, led by BlackRock, started 2020 by publicly committing to divesting from coal and
to prioritise sustainability in their investment strategies.
Kyle Harrison, a sustainability analyst at BNEF, said: “The clean energy portfolios of some of the largest corporate buyers rival those of the world’s biggest utilities. These companies are facing mounting pressure from investors to decarbonize – clean energy contracts serve as a way to diversify energy spend and reduce sus- ceptibility to the tangible risks associated with climate change.”
In terms of regions, the Americas dominated with 15.7 GW in 2019, with the US signing 13.6 GW. The report identified that 80% of US con- tracts,or11.2GW,weremadeunderthevirtual PPA model – synthetic contracts that can only be signed in deregulated markets.
The remaining 2.4 GW was bought under green tariffs, which are offered by utilities in reg- ulated markets.
Europe, Middle East and Africa (EMEA) accounted for 2.6 GW of PPAs and Latin America 2 GW. Spain, Poland, France and Italy emerged as major buyers, while half of European PPA volumes came from Sweden, Norway, Fin- land and Denmark.
As well as these purchases, more large corpo- rations made boardroom commitments to green energy. Nearly 400 companies around the world committed to setting a science-based target in 2019, more than doubling the total number of firms with these goals.
Additionally, 63 companies set an RE100 tar- get, pledging to offset 100% of their electricity demand with clean energy.
The RE100 totalled 221 members in 2019, collectively consuming 233 TWh of electricity in 2018, based on their latest filings – slightly less than South Africa’s entire power generation fleet.™
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w w w. N E W S B A S E . c o m Week 04 30•January•2020