Corporate buying drives renewables growth: NREL

by William Fleeson
Argus Media

Major companies were the main drivers of increased demand for renewable energy in voluntary markets last year, according to the National Renewable Energy Laboratory (NREL).

Much of this growth came in the form of power-purchase agreements (PPAs) between large corporate buyers and electricity suppliers. The trend has continued into 2016 and will likely extend into 2017, according to a new NREL report.

“I think it is significant that these corporations are starting to organize” their own renewable energy procurement, NREL economist Jenny Heeter said today at the Renewable Energy Markets 2016 conference in San Francisco, where she presented the findings of Department of Energy lab's analysis of 2015 data for clean-energy markets.

The PPA project pipeline surpassed 10mn MWh, with over half of that added in 2015, the report said. Corporate buying represented 15pc of total voluntary clean-energy sales last year, although many of those PPAs have not yet come on line, Heeter said. 

Companies such as Facebook, Amazon and Google have been among the major players, but they are not the only ones seeking renewable energy contracts, Heeter said. While the growth has been dominated by the tech sector, companies in the manufacturing, health care and entertainment industries have begun to adopt similar policies. The diversification of companies seeking clean-energy PPAs could help make the contracts a more standard practice.

The benefits of renewable energy PPAs for corporations include electricity price hedging, enhanced energy security and improved corporate reputation, the report said.

Other factors include attractive return on investment given that renewable energy costs have been falling rapidly, as well as the simpler goal to keep up with competitors, NREL said.

Heeter also cited the emergence of support from the government and non-profit sectors in encouraging corporate buying of renewable energy – and making sure the companies follow through on their commitments.

The US Environmental Protection Agency’s Green Power Partnership and the White House’s American Business Act on Climate Pledge have encouraged companies to use more clean energy, Heeter said. Non-profit programs like the Rocky Mountain Institute’s Business Center for Renewables and the group RE100 have also supported the trend, she said