IEA urges proactive measures to integrate renewables
Sep 18, 2024 11:17 CESTCorporate purchases of clean energy since the start of 2018 through July have reached 7.2 GW, already well exceeding last year’s record of 5.4 GW, according to a report by Bloomberg NEF (BNEF).
Corporate procurement activity has been driven by the US and the Nordics, which together account for nearly 80% of purchases this year. Activity is also starting to pick up in the nascent markets of Australia and Mexico, underpinned by high wholesale power prices and strong renewable resources, BNEF said in a press release today. Overall, corporations have now entered into long-term contracts to buy solar and wind in 28 markets.
In terms of industries, technology companies are the biggest buyers, with Facebook (NASDAQ:FB) leading the chart of corporate offtakers this year with 1.1 GW of clean energy purchases. The social media giant is followed by telecom company AT&T (NYSE:T), aluminum producers Norsk Hydro and Alcoa (NYSE:AA), Microsoft (NASDAQ:MSFT), Walmart Inc (NYSE:WMT) and T-Mobile (NASDAQ:TMUS).
The rise in corporate power purchase agreements (PPA) is fuelled by sustainability plans, but also the potential for long-term savings. Thanks to cost declines, renewable energy has become cost-competitive with wholesale power prices and more traditional electricity sources, BNEF said. This is leading corporations to lock into fixed, long-term clean energy contracts and hedge against volatile wholesale market prices, it explains.
The trend seems bound to continue. BNEF estimates that to meet their objectives, the current 140 signatories of the RE100 -- a number that is quickly growing -- will need to buy an additional 197 TWh of clean energy in 2030. If this was to be achieved via long-term contracts for new solar and wind projects, it would foster 100 GW of new capacity.
"As more multi-nationals establish renewables targets, we expect corporations to have an increasing impact on power market design around the world, opening up new avenues for companies to purchase clean energy," BNEF says.
IEA urges proactive measures to integrate renewables
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