Posted on: 29/01/2019
A growing commitment by businesses to sustainability has seen a significant increase in the amount of renewable energy bought by corporate buyers, according to new figures.
The data from Bloomberg New Energy Finance (BNEF) also shows smaller corporate energy buyers are increasingly signing up to clean energy power purchase agreements by aggregating their purchases.
BNEF’s 2019 Corporate Energy Market Outlook shows 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 places 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 US, where companies signed PPAs to purchase 8.5GW of clean energy, nearly triple the amount signed in 2017. Facebook led the way, purchasing over 2.6GW of renewables globally in 2018.
Smaller buyers emerge
BNEF said firms are increasingly aggregating their electricity demand to reap the economies of scale from larger solar and wind projects. In the US last year some 34 new companies signed their first clean energy PPAs, making up 31% of total activity in the country.
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 too, with companies attracted to strong wind resources and credit support from government bodies.
BNEF said the healthiest signal of continued growth in the global corporate procurement space is the growing alliance of companies establishing clean energy and sustainability commitments. One such campaign, known as the RE100 – consisting of nearly 160 signatories at the end of 2018 that have established 100% renewable electricity targets – has companies domiciled in 23 different markets. Cumulatively, these companies consumed an estimated 189TWh of electricity in 2017, equivalent to Egypt’s electricity consumption.
BNEF estimates these companies will need to purchase an additional 190TWh of clean electricity in 2030 to meet their RE100 targets. Should this shortfall be met with offsite solar and wind PPAs, it would catalyse an estimated 102GW of new solar and wind build globally, greater than the size of the U.’s power generation fleet in 2017.