Big corporations are engaged in a “clean energy arms race” to buy renewable power for their operations, said a top Google executive after the web giant announced the biggest such deal in history.
A combination of corporate climate ambitions, and cheaper wind and solar has transformed companies’ appetite for green energy from a niche into a mainstream business imperative, said Fabien Vieau, Google’s EMEA principal for data centre energy and location strategy.
“A decade ago renewable energy procurement was confined to a few tech companies,” Vieau told the RE-Source industry conference in Amsterdam. “Now people recognise the business case.
“What’s happening these days, it’s a competition, it’s a clean energy arms race. Who’s going to purchase the biggest amount of renewable energy. This is good for business, it’s good for the planet so we should enjoy this.”
Vieau was speaking weeks after the US technology giant announced a 1.6GW procurement package that it said was the largest single renewable purchasing spree seen to date, as it pursues an ambition to have 24/7 clean energy supplies to its fleet of data centres.
Those deals included agreements with wind, solar and hybrid projects, and Vieau said combinations of the two technologies, and the inclusion of storage, will become more common as the market evolves.
On the developer side, Thierry Kalfon, managing director of the global renewables business line for French energy giant Engie, said corporate renewable PPAs are now an “unstoppable” force in the sector.
Of the 9GW of new renewable energy Engie plans to build between 2018 and 2021, 4-5GW will operate under corporate PPAs, said Kalfon, whose company has recently signed deals with both Google and Microsoft.
“We are contributing to…this arms race,” he added.
Panelists at the Amsterdam event said large deals with corporations are becoming an increasingly viable option for power sellers looking for alternatives as governments move away from offering attractive, long-term subsidies for renewable projects.
Colin Spain, EMEA renewables lead at Facebook – one of the global leaders in wind and solar procurement – said corporations can offer a degree of flexibility not available when entering government-led processes.
“We see government auctions in Europe now that are two years from high level design to detailed design. If you’d gone with a corporate PPA the asset would have been built at that stage,” said Spain.
Corporate sourcing will be vital to helping the EU meet its ambitions for a 32% renewable energy share by 2030, according to the organisers of the RE-Source event, which is now in its third year and backed by European industry bodies WindEurope and SolarPower Europe.
Although lagging behind the US, corporate renewable sourcing is making a mark in Europe, with 7.5GW of PPAs signed over the last five years and 1.6GW so far in 2019 on the continent.
But challenges include reluctance of some governments to remove barriers to corporate PPAs and the massive task of greening supplies to giant, energy-intensive industries such as chemicals and steel.