BloombergNEF has published its 2H 2019 Corporate Energy Market Outlook which has shown that 2019 is on track to be bigger than 2018 for corporate Power Purchase Agreements (PPAs) globally.
Courtesy of NREL
Corporations signed 8.6 GW of clean energy, up from 7.2 GW at the same time in 2017. The US made up 69 percent of this activity, making it by far the biggest clean energy market globally. US corporations bought 5.95GW of clean energy in 2019, closing in on the 2018 total. Companies are once again flocking to Texas – historically the largest corporate procurement market in the country – where 40 percent of the activity in 2019 has occurred.
Just 1 GW of deals in the US have come from green tariffs with regulated utilities. Reaching the 2.6 GW seen in all of 2018 is unlikely. This may be a result of buyer apprehension, as several companies have been involved in highly publicised legal battles with regulated utilities over clean energy buying. Companies are instead favoring the virtual PPA model, which has made up 82 percent of all US deals in 2019.
RE100 members will need to buy an extra 189 TWh of clean power in 2030 to hit targets. Despite 33 new companies joining the RE100 in 2019 through July, for a total of 191 signatories, BloombergNEF forecasts the group collectively facing a shortfall of 189 TWh in 2030 – 1 TWh less than BloombergNEF’s previous forecast. Existing RE100 members signed deals for an estimated 7.8 TWh of clean electricity, outpacing the demand from new signatories overall. Should these companies meet their 189 TWh shortfall through solar and wind PPAs, BloombergNEF estimates that it would catalyse an additional 94 GW of renewables build, leading to $97 billion of new investment.
Corporations have purchased just 950 MW of clean energy through PPAs in Europe, Middle East and Africa in 2019. The Nordics, which typically sets the pace for the region, has seen just 300 MW of deals, though several solar PPAs in Sweden are the first of their kind. There is excitement in new European markets like Poland and France, and a groundbreaking deal was signed by an oil and gas company in Oman, but otherwise the region continues to be underwhelming as a whole.
China is on the verge of rolling out game-changing policies for corporate procurement. Policymakers are set to implement two key policies. The first is a renewable portfolio standard, mandating that corporations meet a percentage of their load with renewables. The second is a prosumer model, allowing companies to sell excess generation from their own clean energy projects to neighbouring sources of demand. Both mechanisms will create more corporate demand and give companies flexibility in how they procure renewables in China.