Corporations around the world signed a record volume of Power Purchase Agreements in 2017, amounting to 5.4 gigawatts of clean energy by 43 companies across 10 different countries, which is an impressive 25% increase over 2016.
A new comprehensive analysis of corporate clean energy procurement published this week by Bloomberg New Energy Finance (BNEF) found that corporations signed a record volume of clean energy Power Purchase Agreements (PPA) in 2017, despite increasing political uncertainty and stability in two of the world’s leading markets — the United States and Europe.
The new report from BNEF concludes that 43 corporations across 10 different countries signed 5.4 GW (gigawatts) worth of PPAs, up 25% from 4.3 GW signed in 2016, and the previous record of 4.4 GW in 2015. While the figure might seem small when compared to other clean energy figures we are often accustomed too, it nevertheless represents an important step forward for corporations. Consider that only last week, Nike announced that it had signed an 86 MW (megawatt) PPA with Avangrid Renewables in Texas which, in addition to an undisclosed PPA (again with Avangrid) in the Columbia Gorge region of Oregon, sources 100% clean energy for its North American owned and operated facilities.
In other words, small megawatt-size PPAs go a long way for corporations, and 5.4 GW represents a lot of operations being covered by clean energy. Consider also that, according to BNEF, corporations have now signed contracts to purchase nearly 19 GW worth of clean electricity since 2008 — an amount comparable to the generation capacity of a country like Portugal. Further, 76% of this activity was completed since 2015.
These figures are also heartening considering the growing political uncertainty that plagues the United States and Europe. While the clean energy industry had a friend in the White House when Barack Obama was President, the tables have turned and it now literally has an enemy in Donald Trump. Nevertheless, most of 2017’s activity was in the United States, with 2.8 GW worth of PPAs signed, up 19% from 2016.
Similar uncertainty grips the European market, but the region experienced near-record PPAs with over 1 GW signed. 95% of this volume was centered in the Netherlands, Norway, and Sweden, which only serves to confirm the uncertainty that is so common in other European countries like the UK, Germany, and France.
“The growth in corporate procurement, despite political and economic barriers, demonstrates the importance of environmental, social and governance issues for companies,” explained Kyle Harrison, a corporate energy strategy analyst for BNEF. “Sustainability and acting sustainably in many instances are even more important, for the largest corporate clean energy buyers around the world, than any savings made on the cost of electricity.”
Looking forward, BNEF expects growth to continue in 2018 and surpass 2017’s record level of PPAs, thanks in part to a consistent level of corporate commitments to rely on renewable electricity, especially those 100% commitments made through the RE100 campaign. Considering that 35 new companies signed on to RE100 in 2017, bringing the total number up to 122, this is likely to be a central driver of clean energy PPAs for many years to come.