Corporate sourcing of renewable electricity is a fast-growing market in Europe, with more than 15GW contracted through power purchase agreements (PPA)so far, including 3.5GW in 2020 alone.
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One of the drivers behind this progress, signalling that we are moving into a new phase in clean energy sourcing – and accelerating the EU’s climate neutrality ambitions – is the broader spectrum of organisations, including heavy industry, cities and universities, that are shifting their power purchase policies to meet sustainability goals.
Once the preserve of tech titans such as Google, Facebook and Apple, there is now no shortage of examples of the wider engagement renewables PPA are finding, such as German automaker Daimler tying up with Norwegian utility Statkraft to run its factories and office on wind and solar, chemicals giant BASF signing up to buy half the output from the Hollandse Kust South wind farm in the Dutch North Sea to power its operations, and even the German supermarket chain REWE starting to source its electricity from offshore wind.
Meanwhile, other breakout deals can be seen in the Netherlands Ministry for Public Works and Water Management recently signing a wind power-based PPA, and a consortium of British universities having joined together in a landmark agreement to purchase clean energy directly from UK renewable projects.
All this said, the wider potential of renewable PPAs is still to be fully realised. Education will play an important role in widening the pool of buyers sourcing renewable energy. That is why the RE-Source Platform and RECS International have worked together to create a new report on Guarantees of Origin (GO) and Corporate Procurement Options – being launched next week at RE-Source 2021 in Amsterdam – explaining the basics of buying and selling renewable electricity, including how GOs work and the various types of corporate procurement available to businesses.
Many companies are well on their way to meeting their renewable sourcing targets
At the same time as the pool of new buyers is deepening, many companies are well on their way to meeting their renewable sourcing targets and are revising their ambitions upward, with some now aiming to maximise the grid decarbonisation impact of their purchases by matching their demand with clean electricity supply where and when it is needed.
One potential pathway is hourly, or 24/7, matching of demand and clean electricity supply. With case studies from Google, Microsoft, Mercedes-Benz and others, we collaborated with Eurelectric to produce a first white paper on the topic – also being released at RE-Source 2021 – that outlines how to enable greater adoption of 24/7 matching in a timely and cost-effective manner.
The potential benefits of moving towards 24/7 matching range from increased investment in renewables, through accelerated electricity grid decarbonisation and more accountability of corporate sustainability claims, to facilitating new business models and technologies.
Many companies are also seeking better information on the carbon impact of their investments, based on the timing and location of the renewable energy that is generated. In Europe we can learn from the US, where, as a recent REsurety and Brattle Group study found, a new approach around calculating the marginal emissions impact of specific renewable projects could help refine thinking on the topic.
Progress in the clean-power PPA market in Europe is gearing up, but to achieve all that can be done in accelerating the energy transition, corporate buyers must continue to be enabled to maximise the impact they can have on renewables deployment and grid decarbonisation, and in tandem, the focus must be tightened on bringing smaller and newer players, or those who have traditionally struggled to source renewable electricity, into the fold.
· Hannah Hunt is impact director of RE-Source, a platform set up to promote a progressive framework for corporate renewable energy sourcing at EU and national levels. More information on RE-Source 2021 is available here
