This evolution could democratize renewable energy, allowing companies of all sizes to access green energy for business and secure a sustainable, affordable power supply.
The drivers behind CPPA growth in the UK
Several factors are driving the rising demand for renewable energy among UK businesses. First, the introduction of EU ESG reporting requirementsand corporate net zero commitments has led many companies to seek reliable, sustainable power sources like CPPAs to reduce their Scope 3 emissions.
Energy volatility is also pushing businesses to consider CPPAs as a long-term solution. In January 2025, UK wholesale energy prices spiked to £250/MWh, a blatant example of the price instability that businesses face. Geopolitical conflicts have not only disrupted fuel imports, such as restrictions on Russian gas, but also tightened overall energy supply across Europe. As a result, businesses are increasingly looking for the best commercial energy suppliers that can offer price stability and energy security.
At the same time, UK renewable energy generation, especially from wind power in the UK, has reached record highs, making it increasingly feasible for companies to secure affordable and reliable green business energy. In 2024, wind became the UK's largest source of electricity, generating 30% of total outputwith nearly 83 TWh – up from almost 79 TWh in 2023, according to the National Energy System Operator (NESO). As renewable energy capacity increases, CPPAs provide businesses with a means to lock in long-term prices, mitigating the risks of future price hikes.
Barriers to CPPA adoption for UK businesses
Despite the growing interest in renewable business energy, several challenges prevent many businesses from accessing CPPAs. For instance, businesses must often meet high credit requirements, with developers demanding investment-grade counterparty credentials. Smaller businesses may struggle to satisfy these demands, which could result in the need for Letters of Credit (LoC) or cash collateral, making CPPAs financially unfeasible.
Furthermore, many businesses can lack the in-house expertise to navigate the complex CPPA market. The absence of standardization in renewable energy contracts and the legal complexity involved in negotiating CPPAs can deter businesses from pursuing these agreements.
These hurdles require companies to rely on licensed business energy suppliers and potentially enter Sleeving Agreements to fulfil their energy supply obligations. The result is lengthy and costly negotiations, which can take several months or even years.
Towards a more accessible CPPA market
The evolution of the CPPA market is making renewable energy more accessible to a wider range of businesses. One promising development is the rise of renewable energy consortiums, where companies can pool their energy demand to access traceable green power without bearing the full financial and legal risks of individual contracts. These consortiums allow companies to participate in green energy initiatives and gain all the benefits of a CPPA without the high costs and barriers.
In addition to consortiums, new shorter CPPA contract tenors and supply licence exemptions for smaller generators are making it easier for businesses to secure renewable energy. Class A exemptions for smaller generators, which supply up to 2.5MW of power per half-hourly settlement period, provide a cost-effective alternative for companies that cannot afford the typical long-term commitments required by traditional CPPAs.
For businesses looking to diversify their energy sources, onsite storage and distributed generation are also becoming more common. By leveraging a portfolio of smaller renewable projects, businesses can reduce risks and de-risk their energy supply, ensuring they are less vulnerable to fluctuations in wind or solar power generation.
Unlocking the future of green energy
The UK renewable energy market is evolving rapidly, and CPPA solutions are opening up opportunities for UK businesses of all sizes. By lowering barriers to entry through standardized contracts, innovative platforms and collaborative approaches like energy consortiums, I&C companies can access a diverse menu of renewable projects – from small, short-term initiatives to large-scale, long-term offerings.
This increased accessibility not only allows businesses to stabilize costs, secure a sustainable energy supply and meet net zero targets, but also helps create a more affordable, transparent and democratized green energy marketplace. As more companies participate, the energy transition accelerates, bringing traceable clean power to every sector of the UK economy.
By Neil Garland, Head of Origination at Evolve Energy
