Corporations signed a record volume of power purchase agreements, or PPAs, for green energy in 2017. The increase in activity was driven by sustainability initiatives and the increasing cost-competitiveness of renewables, Bloomberg New Energy Finance (BNEF) finds in a new report on corporate procurement activity globally.
A total of 5.4GW of clean energy contracts were signed by 43 corporations in 10 different countries in 2017, according to BNEF in its inaugural Corporate Energy Market Outlook. This was up from 4.3GW in 2016 and a previous record of 4.4GW in 2015, and came despite question marks about how evolving policy could affect corporate procurement in the USA and Europe, the two largest markets.
Most of this activity in 2017 occurred in the United States, where 2.8GW of power purchase agreements were signed by corporations, up 19% from 2016. Europe also experienced a near-record year, with over 1GW signed, some 95% of this volume coming from projects in the Netherlands, Norway and Sweden. Emerging markets also saw newfound activity, with the first onsite corporate PPAs being signed in Burkina Faso, Eritrea, Egypt, Ghana, Namibia, Panama and Thailand. Latin America and Asia are two historically sluggish corporate procurement markets that are expected to attract major activity in 2018 and the coming years. In Asia, most of the 3.2GW of offsite PPA contracts signed since 2008 have been in India. In Australia, where corporations signed power purchase agreements for over 400MW in 2017, expensive wholesale power and the availability of renewable energy certificates have increased the economic incentive for locking into relatively cheap renewable electricity prices long-term. Japan and China, however, continue to have few corporate procurement opportunities due to regulatory barriers, though both are undergoing power market reforms that will change things rapidly.