Finance, Sourcing Renewables - October 21, 2020
Corporate PPAs to account for 20% of new RE generation in the U.S. by 2030
U.S. corporations will be responsible for nearly 20% of all utility-scale renewable power capacity additions over the next decade, a new study found.
IHS Markit released a new report titled “Corporate U.S. Renewable Procurement Outlook: Optimism Amid a Pessimistic Year,” which estimates that corporate-driven PPAs in the U.S. will be responsible for 44 to 72 GW of new wind and solar capacity in the country between 2021 and 2030. This would represent an average of about 4.4 to 7.2 GW per year with a 45% annual increase in installations expected to come from corporate procurement in 2020.
“We have now reached a tipping point for corporate sector demand for renewables,” Anna Shpitsberg, director of global power and renewables at IHS Markit, said in a statement. “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.”
Around 220 U.S. companies, with the technology sector leading the pack, procure renewables and about 40% of them have procurement targets that escalate into the mid-2020s. While corporate procurement was small in 2017, it more than doubled between 2017 and 2018 and then increased again in 2019, representing nearly 16 GW during those two years.
The U.S. currently represents over 60% of the global market for corporate-driven procurement due to factors like numerous 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.