Corporate Clean Energy Purchasing Soared 44% in 2019, Sets Fresh Record: BNEF Report

The research in its titled ‘1H 2020 Corporate Energy Market Outlook’ believed that 19.5 GW of clean energy contracts were signed by more than 100 corporations in 23 different countries in 2019, which was up from 13.6 GW in 2018

January 29, 2020. By News Bureau

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Corporates procured a record 44 per cent more renewable energy through power purchase agreements last year paralleled to 2018 and more than triple the activity seen in 2017, as per new research by BloombergNEF (BNEF).

It added that the majority of this uptrend was driven by movement in the United States and corporate sustainability pledges around the world.

The research in its titled ‘1H 2020 Corporate Energy Market Outlook’ believed that 19.5 GW of clean energy contracts were signed by more than 100 corporations in 23 different countries in 2019, which was up from 13.6 GW in 2018.

According to the report, the 2019 total was equal to more than 10 per cent of all the renewable energy capacity added globally last year – and the projects involved are likely to cost between $20 billion and $30 billion to develop and build.

“Corporations have procured over 50 GW of clean energy since 2008. That is bigger than the power generation fleets of markets like Vietnam and Poland. These buyers are reshaping power markets and the business models of energy companies around the world,” said Jonas Rooze, lead sustainability analyst, BNEF.

The report further that technology firms dominated clean energy procurements. Leading the pack was Google, which signed contracts to purchase over 2.7 GW of clean energy globally in 2019, more than any other corporation.

Trailed by Facebook with 1.1 GW, Amazon with 0.9 GW, and Microsoft with 0.8 GW global acquisitions in 2019.

“Though not as active as the technology sector, a growing number of oil and gas companies are signing clean energy deals. Occidental Petroleum, Chevron and Energy Transfer Partners all signed solar contracts in 2019, following in the steps of ExxonMobil, who kicked off the trend by signing two PPAs totalling 575 MW at the end of 2018,” the report added.

According to the report, the US made up the bulk of this, at 13.6 GW. More than 80 per cent of these contracts signed in the US in 2019 were under the virtual PPA model – synthetic contracts that can only be signed in deregulated markets. The remaining 2.4 GW of clean energy purchased by corporations in the US in 2019 was transacted under green tariffs, which are offered by utilities in regulated markets.

“In Australia, onsite solar projects delivering power to corporations nearly doubled to 1 GW, and a growing number of retailers offer sleeved programmes to deliver clean energy reliably to corporate buyers, similar to green tariffs in the US. China’s renewable portfolio standards are officially in force, mandating that large power consumers meet a certain amount of their demand with clean energy. Japan’s non-fossil certificate auctions grew 11-fold, boosted by the country’s high level of participation in sustainability initiatives – unrivalled among Asian markets,” it added.

According to BNEF, 221 RE100 companies would need to purchase an additional 210 TWh of clean electricity in 2030 to meet their targets. It added that funding these new additions would be expected to require an additional $98 billion of investments -- including allowance for capital cost reductions during the 2020s.

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