Amazon inks clean power deal with Scottish windfarm

Corporate giant Amazon has signed a new corporate power purchase agreement (CPPA) to source clean energy outputs from a Scottish offshore wind farm, with new research claiming that the PPA market is entering a ‘golden era’ in Europe.

Amazon inks clean power deal with Scottish windfarm

Image: Amazon

Amazon announced on Tuesday (30 January) that it has signed a CPPA with ENGIE regarding Ocean Winds’ Moray West offshore wind farm in Scotland. The windfarm, once fully operational, will have a capacity of 882MW and the CPPA covers 473MW.

Amazon states that the CPPA is equivalent to powering more than 650,000 UK homes annually.

“Transitioning to carbon-free energy sources is one of the most impactful ways to lower carbon emissions, and is part of our Climate Pledge commitment to reach net zero carbon across our operations by 2040,” Amazon Web Services’ director of energy, EMEA, Lindsay McQuade said.

“We are on track to meet our ambitious goal of powering our global operations with 100% renewable energy by 2025, and in 2022, 90% of electricity consumed by Amazon was attributable to renewable energy sources. Projects like Moray West will play a critical role in decarbonising Amazon’s operations and the UK grid, with this agreement demonstrating Amazon’s commitment to this ambition.”

Amazon is notably aiming to source 100% renewable electricity to power its global operations by 2025.

The business was the largest corporate buyer of renewable energy in 2022. It purchased 10.9GW of clean power, partly through tariffs and partly via PPAs with the developers of energy generation projects.

In late October, it added to that milestone by confirming that it had supported a further 39 new renewable energy generation projects across Europe since the start of 2023. These projects totalled more than 1GW of new clean energy capacity.

Additionally, through PPAs, Amazon supported 24 utility-scale wind and solar projects in 2023.

In the UK, Amazon funding for clean energy generated £285m in investment between 2014 and 2022 – contributing more than £90m to the UK’s GDP. The clean energy projects also supported 600 local jobs in 2022 alone.

‘Golden era’

In related news, new research has found that 2023 was a record-breaking year for PPA deals.

PPA software and benchmarking firm Pexapark’s European PPA Market Outlook 2024 found that more than 16GW of disclosed contracted volumes were signed through PPAs in 2023 – a 40% increase compared to 2022. Deal counts also surged 65% year-on-year, with more than 270 PPAs signed.

Corporates were the largest driver of the market, securing almost 12GW of PPAs across 218 deals – a 28% increase compared to 2022. Utilities accounted for 23%.

Solar was the predominant source of PPA deals, eclipsing both onshore and offshore wind by a 4:1 scale. Solar accounted for more than 10GW and 160 deals.

Pexapark claims that the European market is entering a “golden era” and expects PPAs to surpass 20GW in the long-term. Spain was the leading market, according to the report, but Germany is expected to emerge as another frontrunner this year.

“One of the main trends we see is the evolved role of utilities in the market, offering solutions to challenges posed by price volatility, intermittency and higher green standards” Pexapark’s co-founder Luca Pedretti said.

“Project owners, utilities and corporates are joining forces to leverage each other’s strengths, and the role of more structured PPAs will increase. Risk managers such as utilities have an opportunity to further evolve into ‘market integrators’ unlocking significant innovation in the market.”

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