January 28, 2019
Corporations purchased 13.4 gigawatts of clean power through long-term contracts, more than doubling 2017’s total, helped by demand from new industries and previously untrodden markets
New York and London, January 29, 2018 – Corporations bought a record amount of clean energy through power purchase agreements, or PPAs, in 2018, shattering the previous record set in 2017. Highlights included a wave of smaller corporate energy buyers aggregating their purchases, and the first corporate clean energy power purchase agreements in markets such as Poland.
BloombergNEF (BNEF) finds in its 1H 2019 Corporate Energy Market Outlook, published today, that some 13.4GW of clean energy contracts were signed by 121 corporations in 21 different countries in 2018. This was up from 6.1GW in 2017, and positions companies alongside utilities as the biggest buyers of clean energy globally.
Jonas Rooze, head of corporate sustainability for BNEF, said: “Corporations have signed contracts to purchase over 32GW of clean power since 2008, an amount comparable to the generation capacity of the Netherlands, with 86% of this activity coming since 2015 and more than 40% in 2018 alone.”
More than 60% of the global activity in 2018 occurred in the U.S., where companies signed PPAs to purchase 8.5GW of clean energy, nearly triple the amount signed in 2017. Facebook spearheaded a contingent of experienced U.S. corporate energy buyers, purchasing over 2.6GW of renewables globally in 2018, primarily with utilities in regulated U.S. markets through programs known as green tariffs. This was three times that of the next biggest corporate energy buyer, AT&T.
ExxonMobil became the first oil major to sign a clean energy PPA for its own operations, purchasing 575MW of solar and wind in Texas. Mexico and Brazil also saw growth in corporate procurement, rounding out the 9.1GW of clean energy purchased by companies in the Americas region in 2018.
In the U.S. a major feature was the emergence of smaller, first-time corporate clean energy buyers. In 2018, some 34 new companies signed their first clean energy PPAs, making up 31% of total activity in the U.S. These firms are aggregating their electricity demand to reap the economies of scale from larger solar and wind projects. In many cases, they benefit from partnering with a bigger, more experienced buyer – known as an anchor tenant – who can offer a stronger balance sheet and expertise on accounting and legal nuances when signing a PPA.
Kyle Harrison, a corporate sustainability analyst for BNEF and lead author of the report, said: “The aggregation model has heralded in a new generation of corporate clean energy buyers. These companies no longer need to tackle the complexities of clean energy procurement alone. They can share risks associated with credit and energy market volatility with their peers.”
In the Europe, Middle East and Africa (EMEA) region, corporations also purchased record volumes of clean energy, inking deals for 2.3GW and doubling the 1.1GW signed in 2017. The Nordics were once again the hot spot for activity, with companies attracted to strong wind resources and credit support from government bodies. Aluminum producers Norsk Hydro and Alcoa Corp purchased the most clean energy in Europe in 2018, but the region also saw activity from multinational technology companies such as Facebook, Amazon and Alphabet subsidiary Google.
Several European countries that saw little or no corporate procurement activity in 2017 enjoyed a rise in interest in 2018. Companies signed PPAs for the first time in Poland, and just the second time in Denmark and Finland. There were also new deals signed in the U.K., following a lull after the expiration of a national subsidy program. Several requests for proposals and changes in policy suggest burgeoning new markets in Germany and France as well.
In the Asia-Pacific (APAC) region, still a nascent market for corporate procurement, companies signed a record 2GW of clean energy PPAs, more than the previous two years combined. Nearly all of this activity occurred in India and Australia, with roughly 1.3GW and 0.7GW of clean energy purchased, respectively. Both markets allow companies to buy clean energy at a large scale through offsite PPAs, making them rarities for the region.
Demand still far outstrips supply in the rest of APAC, although recent changes in several markets suggests a major spike in activity is on the horizon. Offsite corporate PPA mechanisms are now available in nine provinces in China, and the imminent passing of a renewable portfolio standard will give over 30,000 large commercial and industrial companies renewable electricity targets. In Japan, the country’s third non-fossil certificate auction saw corporations purchase 21TWh, tripling the combined activity in the first two auctions. Thirteen companies in Japan have also established 100 renewable electricity targets, more than the rest of APAC combined.
The healthiest signal of continued growth in the global corporate procurement space is the growing alliance of companies establishing clean energy and sustainability commitments. One such campaign, known as the RE100 – consisting of nearly 160 signatories at the end of 2018 that have established 100% renewable electricity targets – has companies domiciled in 23 different markets. Cumulatively, these companies consumed an estimated 189TWh of electricity in 2017, equivalent to Egypt’s electricity consumption.
BNEF estimates these companies will need to purchase an additional 190TWh of clean electricity in 2030 to meet their RE100 targets. Should this shortfall be met with offsite solar and wind PPAs, it would catalyse an estimated 102GW of new solar and wind build globally, greater than the size of the U.K.’s power generation fleet in 2017 (see Figure 2 below).
Rooze said: “For companies that think seriously about sustainable growth, establishing clean energy and decarbonization targets lines up naturally with overall corporate strategies. At the same time, these initiatives have created an entire new universe of opportunity for utilities, clean energy developers and investors.”
BNEF updates its data on corporate procurement each month and publishes a market outlook on corporate energy strategy bi-annually.
About BloombergNEFBloombergNEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.
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February 11th, 2018 by Zachary Shahan
Solar power prices have been dropping faster than people expected, even faster than experts expected, and even faster than bullish experts expected.
I wrote about this general point a couple of years ago for an article for The Economist Group. The question I was supposed to explore was whether we needed solar technology breakthroughs in order for solar to take over the electricity generation market. Various solar experts emphasized to me that known, predictable, incremental improvements in solar PV technology and manufacturing would keep bringing down the cost of solar PV — at an incredible clip. The standout point was from Jenny Chase of Bloomberg New Energy Finance (BNEF), who highlighted that her team forecast a solar module* price drop from 62¢/watt in 2015 to 21¢/watt by 2040. That was with an assumption of no technological breakthroughs.
During a Zayed Future Energy Prize review committee meeting in September (I’m on the committee), I brought this up in one of the discussions we were having. Other analysts from BNEF who were there noted, “Actually, they’ve come down much quicker than we expected.” The average had already dropped to approximately 40¢/watt. They showed me a graph of the more recent cost drops as friendly proof. Astounding — even BNEF’s relatively “bullish” projections were far too conservative.
Jennifer Chu | MIT News Office
February 15, 2018SHARE
Try a quick experiment: Take two flashlights into a dark room and shine them so that their light beams cross. Notice anything peculiar? The rather anticlimactic answer is, probably not. That’s because the individual photons that make up light do not interact. Instead, they simply pass each other by, like indifferent spirits in the night.
But what if light particles could be made to interact, attracting and repelling each other like atoms in ordinary matter? One tantalizing, albeit sci-fi possibility: light sabers — beams of light that can pull and push on each other, making for dazzling, epic confrontations. Or, in a more likely scenario, two beams of light could meet and merge into one single, luminous stream.
It may seem like such optical behavior would require bending the rules of physics, but in fact, scientists at MIT, Harvard University, and elsewhere have now demonstrated that photons can indeed be made to interact — an accomplishment that could open a path toward using photons in quantum computing, if not in light sabers.news.mit.edu/2018/physicists-create-new-form-light-0215