Corporate Buyers Set New Record for Procurement

Tech companies have acquired the bulk of clean energy generated in 2019 through power purchase agreements, registering a solid 40 percent increase over the previous year, marking a new record. The findings come from BloombergNEF’s 1H 2020 Corporate Energy Market Outlook.

The report’s authors found that last year, about 19.5 gigawatts of clean energy contracts were signed by more than 100 corporations in 23 different countries, with the majority of acquisitions occurring in the U.S. The purchasing activity was up from 13.6 gigawatts in 2018 and more than triple the activity registered in 2017. Last year, in the U.S., 13.6 gigawatts of power purchase agreements were signed: 11.2 gigawatts were under the virtual PPA model (available only in deregulated markets) and the remaining 2.4 gigawatts purchased by corporations was transacted under green tariffs (offered by utilities in regulated markets). Since 2008, corporations have acquired more than 50 gigawatts of clean energy, as per the study.

Google maintained its leading position in clean energy procurement, having purchased more than 2.7 gigawatts of clean energy globally in 2019. In fact, last year, the company’s investment in clean energy marked the largest single announcement ever made by a corporation—in September, the tech giant announced 18 contracts to buy 1.6 gigawatts of clean energy in six countries.

The next largest buyers of clean energy globally in 2019 were Facebook (1.1 gigawatts), Amazon (900 megawatts) and Microsoft (800 megawatts). Currently, the clean energy portfolios of these corporate buyers rival those of the world’s biggest utilities, which, according to the lead author of the report, adds to the pressure these companies face to decarbonize and diversify their energy mix to reduce risks associated with climate change.

Oil and gas companies have also signed clean energy deals last year, Occidental Petroleum, Chevron and Energy Transfer Partners following the trend set by ExxonMobil at the end of 2018 when it signed two PPAs totaling 575 megawatts.

Numbers were also up in Europe, the Middle East and Africa; here companies purchased 2.6 gigawatts of clean energy through PPAs, while in Latin America were signed contracts for 2 gigawatts of energy. In Asia Pacific corporate PPA activity decreased overall, but in Australia, onside solar projects under contract with corporate buyers nearly doubled to 1 gigawatt.

Sustainability commitments soared in 2019, with nearly 400 companies around the world pledging to reduce their emissions in accordance with the Paris Agreement, for which clean energy is an essential part. In addition, 63 companies set a RE100 target, pledging to offset 100 percent of their electricity, bringing the total RE100 number of companies to 221 members.