New analysis by IHS Markit finds that renewable corporate procurement in the United States grew more than in any other country, representing over 60% of the global market for corporate-driven renewable power purchase agreements (PPAs).
The report Corporate U.S. Renewable Procurement Outlook: Optimism Amid a Pessimistic Year release by IHS Markit also shows that as recently as 2017 corporate sector renewable demand had been minuscule and it more than doubled in 2018, increasing again in 2019, with almost 16GW announced between the two years.
While the U.S. technology sector has been at the forefront of the expansion in corporate-driven renewable power purchase agreements (PPAs), significant growth potential now exists for corporate renewable procurement beyond the technology sector such as in the manufacturing and telecommunications sectors, said Anna Shpitsberg, director of global power and renewables at IHS Markit.
An increasing number of corporations in the U.S. are setting renewable targets and aiming to take advantage of tax credit availability in the short-term. Currently, there are around 220 companies operating in the US that 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.
States with organized wholesale power markets and retail choice, such as the Electric Reliability Council of Texas (ERCOT), registered higher contracting activity to date.
IHS Markit anticipates that agreements by which corporations contract electricity from renewable power producers are expected to be responsible for 44-72 gigawatts (GW) of wind and solar additions in the United States from 2021-2030.
It also forecasts that corporate-driven power purchasing agreements (PPAs) will account for 20% of all utility-scale renewable power additions in the next decade (including direct PPAs, virtual PPAs, and green tariffs/sleeved PPAs), representing an average of 4.4 -7.2GW per year depending on the extent to which corporations expand and fulfill their renewable ambitions.
It adds that the growth in contracting is expected to contribute nearly 8GW of wind and solar installations in 2020, a 45% annual increase in installations stemming from corporate procurement.
Source: Press release by IHS Markit. Photo credit: U.S. Department of Energy via Flickr (U.S. Government Works).