Corporate power purchase agreements (PPAs) for clean energy reached an all-time high of 31.1 GW in 2021 as corporations announced new sustainability pledges while costs for renewables are falling, a new report by BloombergNEF (BNEF) shows.
The total volume has grown by almost 24% from 2020, which was also a record year with 25.1 GW of announced deals. According to BNEF’s latest report, more than 137 corporations in 32 countries contributed to the new record, with roughly 65% of all PPAs being signed by US corporate players. Large technology companies were a major driver for the growth in activity by signing more than half of the deals.
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“It is no longer a matter of whether corporate clean energy procurement will grow each year, it’s a matter of how much,” said Kyle Harrison, head of Sustainability Research at BNEF.
With PPAs for 20.3 GW, the Americas were responsible for two-thirds of the total corporate procurement activity in 2021. The US headed the list with deals for 17 GW, of which virtual PPAs account for 12 GW. A total of 8.7 GW of deals were registered in the European market, where Spain and the Nordics were the most attractive. Meanwhile, only 2 GW of capacity was contracted through PPAs in Asia.
Technology companies were once again the biggest buyers on the market. Amazon (NASDAQ:AMZN) again headed the ranking with 44 offsite PPAs in nine countries for a total of 6.2 GW. Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:FB), formerly known as Facebook, followed suit with deals for 8.9 GW and 8 GW, respectively.
“The clean energy portfolios of big tech companies now rival those of the world’s biggest utilities,” commented Helen Dewhurst, senior associate at BNEF, adding that those companies are facing extreme pressure from investors to decarbonise.
Corporate sustainability commitments were also on the rise in the past year and were “a driving force” for the signing of PPAs. BNEF pointed out that 67 companies have set 100% renewables goals in 2021.