Supply Chain Council of European Union | Scceu.org
Procurement

Corporate renewable energy procurement jumps 45% in 2020

Share

More than any other country, the United States has a growing portion of new renewable energy projects being built to meet demand coming directly from corporations. Agreements by which corporations contract electricity from renewable power producers are expected to be responsible for 44-72 GW of wind and solar additions in the country from 2021-2030, according to a new analysis by IHS Markit.

The report, titled “Corporate U.S. Renewable Procurement Outlook: Optimism Amid a Pessimistic Year” says that these corporate-driven Power Purchasing Agreements (PPAs) would represent about 20% of all utility scale renewable power additions for the period — an average of 4.4 -7.2 GW per year depending on the extent to which corporations expand and fulfill their renewable ambitions.

A recent SEIA report found corporations have invested specifically in 8,300 MW of U.S. solar.

“We have now reached a tipping point for corporate sector demand for renewables,” said Anna Shpitsberg, director, global power and renewables, IHS Markit. “Fueled 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 minuscule as recently as 2017. Corporate procurement more than doubled in 2018 and increased again in 2019, with almost 16 GW announced between the two years. The U.S. technology sector has been at the forefront of the expansion in corporate-driven PPAs.

This growth in contracting is expected to contribute nearly 8 GW of wind and solar installations in 2020, a 45% annual increase in installations stemming from corporate procurement.

Around 220 companies operating in the United States 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 United States currently is the world leader in this area by far, representing over 60% of the global market for corporate-driven procurement. The U.S. market position can be attributed, in part, to factors such as the sheer number of large U.S.-based corporations, tax incentives, a high concentration of power-intensive data centers 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 says.

“This type of corporate-driven renewables procurement is growing beyond its tech-based roots,” she said. “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.”

News item from IHS Markit

Related posts

AE Industrial Partners Acquires AIM MRO

scceu

South Africa: SAPS Retirees Arrested in Police Procurement Case

scceu

Facilities Management News:Z955R ZTrak by John Deere

scceu

Leave a Comment