Corporates purchased 8600MW of clean energy in the first half of the year, up from 7200MW in the same period of 2018, according to new market research from Bloomberg New Energy Finance (BNEF).
Overall, 2019 is on track to be bigger than 2018 for corporate power purchase agreements (PPAs) globally, with the US accounting for 69% of the activity, BNEF’s corporate energy market outlook for the second half of 2019 found.
US corporations bought 5.95GW of clean energy in 2019, closing in on the 2018 total, according to the outlook.
Texas, historically the largest corporate procurement market in the country, is where 40% of the activity occurred in 2019.
Companies are signing solar PPAs in the Electric Reliability Council of Texas (ERCOT) market to take advantage of peak pricing during the summer months, improving the economics on a deal, BNEF found.
Around 1GW of deals in the US have come from green tariffs with regulated utilities and BNEF says it is unlikely the 2.6GW seen in 2018 will not be reached, possibly as a result of buyer apprehension, as several companies have been involved in highly publicised legal battles with regulated utilities over clean energy buying.
Companies are instead favouring the virtual PPA model, which has made up 82% of all US deals in 2019.
The outlook also states that RE100 members will need to buy an extra 189 terawatt-hours of clean power in 2030 to hit targets.
Despite 33 new companies joining the RE100 in 2019 through July, for a total of 191 signatories, BNEF forecasts the group collectively facing a shortfall of 189TWh in 2030, 1TWh less than the previous forecast.
Existing RE100 members signed deals for an estimated 7.8TWh of clean electricity, outpacing the demand from new signatories overall.
“Should these companies meet their 189TWh shortfall through solar and wind PPAs, we estimate it would catalyse an additional 94GW of renewables build, leading to $97bn of new investment,” according to BNEF.
Corporations have purchased just 950MW of clean energy through PPAs in Europe, Middle East and Africa in 2019.
The Nordics has seen just 300MW of deals, though several solar PPAs in Sweden are the first of their kind.
“There is excitement in new European markets like Poland and France, and a groundbreaking deal was signed by an oil and gas company in Oman, but otherwise the region continues to be underwhelming as a whole,” stated BNEF.
China is on the verge of rolling out what BNEF describes as “game-changing” policies for corporate procurement.
The first is a renewable portfolio standard, mandating that corporations meet a percentage of their load with renewables.
The second is a ‘prosumer’ model, allowing companies to sell excess generation from their own clean energy projects to neighbouring sources of demand.
Both mechanisms will create more corporate demand and give companies flexibility in how they procure renewables in China.