Demand for renewable power by the corporate sector will account for between 44GW and 72GW of new wind and solar capacity in the US from next year through 2030, according to new analysis by IHS Markit.
‘Corporate US Renewable Procurement Outlook: Optimism Amid a Pessimistic Year’ found that corporate-driven PPAs will represent about 20% of all utility-scale renewable power additions for the period, depending on the extent to which corporations expand and fulfil their renewable ambitions.
IHS Markit global power and renewables director Anna Shpitsberg said: “We have now reached a tipping point for corporate sector demand for renewables.
“Fuelled by shareholder and consumer activism, the opportunity to hedge power costs and corporate renewable targets, companies are increasingly making the connection between a specific project and a specific facility’s power demand.”
Corporate sector renewable demand had been “miniscule” as recently as 2017, in the US, the analyst outfit highlighted.
In 2018 corporate procurement more than doubled and increased again in 2019, with almost 16GW announced between the two years.
The US technology sector has been at the “forefront of the expansion” in corporate-driven PPAs.
The growth in contracting is expected to contribute nearly 8GW of wind and solar installations in 2020, a 45% annual increase in installations stemming from corporate procurement.
Around 220 companies operating in the US are already procuring renewables or plan to do so and about 40% of these companies have targets that escalate through the early to mid-2020s.
The US represents over 60% of the global market for corporate-driven procurement, attributable to factors such as the sheer number of large US-based corporations, tax incentives, a high concentration of power-intensive data centres and power market structures and accounting standards that are more conducive to corporate procurement.
Significant growth potential now exists for corporate renewable procurement beyond the technology sector, Shpitsberg said.
“This type of corporate-driven renewables procurement is growing beyond its tech-based roots.
“Sectors such as manufacturing and telecommunications that have high consumption patterns, ambitious renewable targets and low-to-moderate renewable procurement to date are poised to expand in this area,” she added.