Renewable power purchase agreements surge more than 25% in Europe
Renewable power purchase agreements (PPAs) made by corporates in Europe totalled 8GW in 2019, up from 5.5GW in 2018.
That is a headline conclusion of the latest research and advice paper from the RE-Source Platform, a consortium consisting of The Climate Group’s RE100 initiative and its member corporates; WindEurope, SolarPower Europe; CDP and the World Business Council for Sustainable Development (WBCSD).
According to the report, wind accounted for 85% of the off-site PPA deals made in 2019 by value. Investment in such deals was particularly pronounced in Sweden, Norway and here in the UK.
The UK Government notably introduced its offshore wind sector deal last year, jointly committing with key industry players boost annual exports fivefold by 2030, to reach £2.6bn.
According to the RE-Source Platform’s findings, policymakers and businesses in most European nations are, like the UK, prioritising offshore renewable generation technologies, as they can typically be made larger than onshore arrays.
Solar, however, still had a major role to play, the report concludes, accounting for almost 30% of clean PPA deals made last year in Europe by volume. In comparison, solar accounted for less than 6% of all clean PPA deals made in Europe by volume in 2018.
The three largest individual European solar deals made in 2019 were of 199MW by Amazon in Spain; 160MW by Google in Demnark and 143MW in France by rail operator SNCF. Amazon has notably pledged to source 100% renewable electricity by 2030, with an interim aim of 80% by 2024, while Google has been sourcing 100% renewable electricity for operations since 2017 and is now investing at scale to bring manufacturers and suppliers along for the transition.
While the facts and figures for Europe are promising, and even larger year-on-year boom in clean PPAs was recorded in the US in 2019.
Renewable PPAs made in the US last year totalled 16GW, up from 10GW in 2018, the report states. 16GW is equivalent to four-fifths of the global total.
RE-Source Platform attributes this trend almost wholly to the fact that the US market for clean PPAs is more mature than anywhere else in the world. The body estimates that the year in which clean PPAs became commonplace in the US was 2013.
These findings are consistent with previous analyses from the likes of Bloomberg NEF, which concluded that a 40% global year-on-year increase in corporate clean energy procurement was led by action in the US, and the RE100, which saw membership surge by one-third in 2019. Many of its newest members hail from the US and Japan.
RE-Source Platform highlights in the report the need for European corporates to increase their renewable energy ambitions in anticipation of the EU’s bloc-wide Green Deal, headlined by a 2050 net-zero target. France and the UK both have legally-binding net-zero targets for 2050 already, while policy positions for net-zero by the same deadline have been set in Germany and Ireland.
Available to watch on-demand: Free Corporate Power Purchase Agreements online masterclass
Back in September, edie hosted a 45-minute masterclass webinar on renewable corporate PPAs, in association with Orsted.
The session offered a detailed overview of the agreements and the key considerations when adopting these deals and can be accessed on-demand here. Alternatively, the session's key takeaways can be found in this article.