Corporations contract record 36.7 GW of renewable power in 2022 - BNEF

Private companies and public institutions signed long-term contracts to procure 36.7 GW of renewable power in 2022, marking a record high and an increase of 18% compared to 2021, according to data today from BloombergNEF (BNEF).

The increase in corporate power purchase agreements (PPAs) came despite the energy crisis, supply chain challenges and high interest rates, the research firm noted, with deals accelerating in the Americas and Asia-Pacific.

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In the Americas, PPAs in gigawatt terms grew 18% to a record 24.1 GW, with rises in both the US, where virtual PPAs are trendy, and Latin America, where the market was driven by mining companies in Chile and Brazil.

In the Asia Pacific region, corporate PPAs more than doubled to 4.6 GW, led by India and Australia, and are expected to keep growing significantly due to companies’ renewable energy goals.

In Europe, the Middle East and Africa (EMEA), the volume of contracts declined 7% to 8.1 GW in 2022 as a result mainly of the energy crisis, which prompted developers to seek higher prices or avoid PPAs in order to sell into wholesale markets. This, however, may be followed by a rebound in 2023.

“Companies can access clean energy at scale in most major countries, the economics make sense, and amid turbulent energy markets, PPA’s have become useful risk-mitigation tools for CFOs,” said Kyle Harrison, head of Sustainability Research at BNEF.

A total of 167 organisations announced power purchase agreements (PPAs) last year, led by tech groups Amazon with 10.9 GW of PPAs, Meta with 2.6 GW, Google with 1.6 GW and Microsoft with 1.3 GW.

Based on publicly available information BNEF ranks the clean energy corporate buyers in the following way:

“We’re seeing an evolution in the corporate energy buyer, with companies moving to hourly carbon-free energy goals and others signing clean energy contracts for reliability purposes,” said Harrison. “Developers that can provide firming and balancing services have access to a wellspring of corporate clean energy demand and are poised to be the biggest winners in this market.”

The PPAs announced last year were with 135 different project developers. The sellers were led by AES Corp with 2.8 GW, Engie with 1.6 GW and Acciona with 1.1 GW.