Corporations driving renewables growth

WORLDWIDE: The role of corporate power purchase agreements (PPAs) is driving the growth of renewables and even now affecting policy, according to a new report.

Social media giant Facebook has been one of the most active buyers of clean energy in 2018
Social media giant Facebook has been one of the most active buyers of clean energy in 2018

Power deals for over 7.2GW of renewable energy were signed in the first half of 2018, beating the 5.4GW signed across the whole of 2017, researchers from Bloomberg New Energy Finance (BNEF) found.

Over 60% of the deals were agreed in the US, a long-time leading market for this kind of deal.

However, BNEF found a growing appetite for similar deals in Europe, Mexico, Brazil and Australia

The Europe, Middle East and Africa (EMEA) region saw 1.6GW of deals, surpassing 2017’s total.

This has been driven by a couple of deals in Scandinavia, BNEF said – notably Norsk Hydro’s deal to acquire the output of a wind project in Norway to power its aluminium-production activities.

Corporations in Brazil have purchased at least 60TWh of clean energy in the first five months of the year, while Mexico’s new energy market reform has opened the door for new suppliers for corporations to choose from.

Globally, 28 markets have publically disclosed corporate power purchase agreements since 2008.

In the last ten years, corporations have backed 26GW of clean energy.

This kind of deal offers large companies a secure and stable price for energy, more immune to drastic power price fluctuations.

Corporate PPAs remain scarce across much of Asia, BNEF said.

Roughly 100MW of PPAs was signed in Australia in the first half of this year, but BNEF expects this figure to grow "as technology costs decrease and more mechanisms to purchase clean energy offsite become available in the country", BNEF said.

Opposition from utilities in China and a lack of demand in Japan has strangled growth there.

However, BNEF said southeast Asia "could represent a new frontier as renewable costs fall" for corporate PPAs. 

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