Tech giants, including Facebook, Google and Amazon are leading the charge for corporate procurement of renewable energy in the US, according to new research by Wood Mackenzie Power & Renewables.
In the ‘Corporate Procurement of Wind and Solar 2018′ report, the research shows tech giants are the largest segment of offtakers with most electricity use per square foot.
Facebook, Google, and Amazon have a combined market share of 35.1%, Wood Mackenzie said.
Wood Mackenzie Power & Renewables senior analyst Colin Smith said: “2018 was a banner year for corporate procurement of renewables. C&I procurement drove a combined 22% of solar and wind PPAs signed in 2018 and solidified its place as a major driver of renewables in the US.
“This is a significant development within the industry. C&I has always been a major driver of wind projects, but it is now a major driver of solar projects too.
“With so many companies pledging carbon reduction targets or signing the RE100 pledge to achieve 100% renewable electricity sourcing, peer pressure is growing among companies to be the most sustainable within their sector.
“After announcing 1.5GW of procurement in 2018, Facebook is the largest offtaker of front-of-the-meter wind and solar in the US Google is only 58MW behind Facebook, with Amazon rounding out the top three.
“However, as additional corporations pledge to procure 100% renewables, the leading share could shift from the data and technology segment to the industrial segment.”
Wood Mackenzie added that 2018 was the biggest year on record by megawatts of new C&I contracts signed.
Wood Mackenzie Power & Renewables research analyst Lucas Stavole said: “Corporate offtakers contracted more capacity than ever before, securing low-priced PPAs that take advantage of the ITC and PTC before the value of each incentive steps down in 2020 and 2021, respectively.
“C&I PPAs are getting bigger. C&I firms are contracting from increasingly larger projects to meet this growing demand, a trend that is expected to continue, though C&I PPA structures will become more intricate and tailored to meet the needs of offtakers with wide ranging consumption levels and risk tolerances.”
The research also illustrated that the top six C&I developers for wind and solar hold 50% and 56%, respectively, of the C&I market share.
In comparison, the top six developers in the US wind and solar market hold 31% and 40% of the market.
“This relative concentration of the C&I market is likely due to corporate offtakers looking to buy power from blue chip projects with established developers, allowing those developers to build stronger relationships with their offtakers,” said Stavole.