January 29 (Renewables Now) - The volume of corporate power purchase agreements (PPAs) for green energy capacity in 2018 reached the record 13.4 GW as the year was driven by demand from first-time players and new markets, according to a report by BloombergNEF (BNEF).
The 2018 total is more than double the contracted capacity in the year-ago period when PPAs for 6.1 GW were signed. Corporate procurement activity has been largely driven by the US, which accounted for over 60% of the global deals with the signing of PPAs for 8.5 GW. Activity was also high in Mexico and Brazil and record volumes of 2.3 GW were contracted in the Europe, Middle East and Africa (EMEA) region, as well. About 2 GW of renewables PPAs were registered on the nascent Asia-Pacific (APAC) market, more than the volume of the previous two years combined.
The EMEA region doubled the 1.1-GW PPAs volume from 2017, largely thanks to the Nordic countries as companies were envigoured by the strong wind resources and credit support from government bodies there. PPAs were signed for the first time in Poland and the second time in Denmark and Finland, while activity in the UK rebound after a slowdown following the expiration of a national subsidy programme.
“Corporations have signed contracts to purchase over 32 GW 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,” said Jonas Rooze, head of corporate sustainability for BNEF.
Technology companies were the biggest buyers, led by Facebook (NASDAQ:FB) and its purchases of over 2.6 GW of renewables power, followed by AT&T (NYSE:T) and ExxonMobil (NYSE:XOM), which bought 575 MW of wind and solar in Texas. On a corporate level, 2018 was marked by aggregated purchases in which smaller buyers teamed up in their deals, as well as the emergence of smaller, first-time corporate players. According to the report, new companies were responsible for 31% of the total PPA activity in the US.
BNEF forecasts that the upward trend is bound to continue and estimates that, to meet their objectives, the current 160 signatories of the RE100 campaign will need to buy an additional 190 TWh of clean energy in 2030. If this was to be achieved via long-term contracts for new solar and wind projects, it would support the deployment of 102 GW of new capacity.
Rooze commented that initiatives like the RE100 “have created an entire new universe of opportunity for utilities, clean energy developers and investors.”