The amount of renewable energy accounted for by corporate power purchase agreements (PPAs) has tripled since 2017, with tech firms like Google making big commitments
Technology powerhouses dominated a record year for renewable energy utility contracts bought by corporate institutions in 2019, in which green power purchase agreements (PPAs) rose by 40% on the previous year.
Google alone accounted for 2.7 gigawatts (GW) of clean power procurement throughout the year – making it by far the biggest corporate investor in renewable energy sources.
The likes of Facebook, Amazon and Microsoft were the next largest buyers globally, reflecting the steady climb of corporate sustainability commitments up boardroom agendas.
Power-hungry data centres and campuses operated by these titans of Silicon Valley account for a significant proportion of global energy use, and a commitment to using renewable electricity sources represents an easy win to satisfy environmentally-focused investors and customers.
Renewable energy power purchase agreements have tripled since 2017
Data compiled by BloombergNEF (BNEF) shows more than 100 corporations across 23 countries made clean energy purchase agreements in 2019 to the tune of 19.5GW – up from 13.6GW in 2018 and more than triple 2017 levels.
That is equivalent to more than 10% of all renewable power capacity installed globally last year, with associated projects likely to carry a price tag of $20bn to $30bn.
BNEF lead sustainability analyst Jonas Rooze said: “Corporations have purchased more than 50GW 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.”
Last year, Google signed the largest renewable energy deal in corporate history, revealing contracts to purchase 1.9GW of power from wind and solar projects in six different countries.
And earlier this month, Microsoft announced its own target to purchase exclusively renewable energy by 2025 as part of a wider commitment to becoming a “carbon-negative” business by 2030.
US accounts for majority of corporate clean energy contracts
The US was the top region for corporate PPAs for renewable energy – accounting for 13.6GW of the 2019 total and notably more than the entire value of contracts signed globally in 2018.
In the EMEA region, 2.6GW worth of renewable energy PPAs were signed last year, with countries like Spain, Poland France and Italy joining Nordic regulars Sweden, Norway, Finland and Denmark in making long-term purchase commitments for the first time.
Brazil and Chile were the leading markets in Latin America, where large populations and energy-intensive mining industries under pressure from investors are driving interest in green power purchases.
BNEF sustainability analyst Kyle Harrison said: “The clean energy portfolios of some of the largest corporate buyers rival those of the world’s biggest utilities.
“These companies are facing mounting pressure from investors to decarbonise – clean energy contracts serve as a way to diversify energy spend and reduce susceptibility to the tangible risks associated with climate change.
”Sustainability commitments will ensure that clean energy procurement from corporations continues to thrive. The ball is in the court of utilities, policymakers and investors.
“They will need to meet these buyers in the middle, especially in nascent markets for corporate procurement.”