Energize Weekly, October 24, 2018
Corporate renewable energy power purchases—which have spurred $15 billion in capital investment in the last eight years—have already set an annual record in 2018 led by tech companies.
So far this year, corporate customers have purchased 4.96 gigawatts of renewable electricity through 59 deals, according to the Business Renewables Center, a program run by the Rocky Mountain Institute, a non-profit energy consultant.
The previous record was 3.12 gigawatts set in 2015. In 2017, 2.89 gigawatts of power purchase agreements (PPA) were made.
The tech sector was the main buyer with 47 percent of the PPAs, followed by university and government buyers with 13 percent and consumer staples with 11 percent. Manufacturing accounted for just 5 percent of the agreements.
A Bloomberg New Energy Finance (BNEF) analysis said that since 2010, these PPAs have added up to 18 gigawatts and been responsible for a building boom in wind and solar projects.
The PPAs from tech companies alone primed the pump for $15 billion in wind and solar capital investments, BNEF said.
“That $15 billion in energy capex isn’t tech spending, but it wouldn’t have happened without tech companies, either,” BNEF said. “And every wind or solar project built to meet the needs of a tech company helps drive down the costs of wind and solar power through greater deployment. It’s significant capex in monetary terms; it makes an impact on the entire energy system, too.”
A total of $2 billion in wind and solar projects have been announced this year in the U.S., BNEF said.
“Corporations sign these purchase agreements for a number of reasons (sustainability goals and positive media coverage certainly being two), but the main reason is that long-term contracts with generators that have no variable costs are good for business,” BNEF said.
Also spurring the purchasers is a move to take advantage of the Production Tax Credit (PTC) for wind projects and the Investment Tax Credit (ITC), which are being reduced in steps.
The three largest purchasers of renewable energy in 2018 are Facebook, AT&T and Walmart, according to the Business Renewables Center. They were followed by Microsoft and Apple.
In all, there were 70 individual purchasers of renewable energy supplies in 2018. The number of first-time buyers in the market has been rising steadily with 20 new customers this year.
The center’s statistics are based on publicly-announced, contracted capacity by companies through PPAs and does not count onsite generation, such as rooftop photovoltaic solar, or direct agreements with operating plants.
Renewable energy purchases were made in 26 states, with Texas leading the way with 42 deals following by North Carolina and Oklahoma with 14 each. Rounding out the top five are Illinois with nine and Nevada with eight deals.