The green energy pioneers of the corporate world are setting a scorching pace as they race towards an all-renewable future, but nobody wants their club to stay an exclusive one.

The latest data from the fast-growing ranks of the RE100, the group of corporates committed to 100% renewable power for their operations, shows the initiative’s combined membership delivered a year-on-year growth of more than 40% in the amount of green electricity they sourced, and 37 of its 155 members are now getting 95% of their power from renewables.

The RE100 includes the major corporate names that have led the way in signing renewable energy PPAs and in some cases actively investing in projects.

But on the eve of RE-Source 2018, the second annual event devoted to European corporate renewables that begins in Amsterdam tomorrow, the continent’s wind and solar sectors know the next big challenge is to broaden the field of players beyond the ‘usual suspects’ – IT behemoths such as Google and Facebook, or progressive retailers such as Ikea.

Getting huge, energy-intensive industrial users involved at one end of the spectrum, and at the other bringing on board smaller consumers of power that want to take advantage of stable, competitive green power supplies, will both be on the minds of delegates in Amsterdam

The profile of renewable PPAs in energy-intensive industries was raised dramatically late last year with the blockbuster 1.65TWh deal signed by Norwegian aluminum group Norsk Hydro for output from the 650MW Markbygden wind project in Sweden.

Giles Dickson, chief executive of WindEurope, said energy-intensive industrials are coming to the corporate renewables party in increasing numbers, helping to swell a European sector that he said now has 5.5GW of wind and solar capacity under contract, including many projects that are yet to reach operations.

“It’s not just alumimium. We have automotive, steel, we have chemicals.

“We know that in Germany the chemical and automotive industries are looking very seriously at this. Things are really moving.” Mercedes set the pace for the automotive sector earlier this year with a wind PPA for an engine plant in Poland.

The prospects for corporate renewable PPAs in Germany are being further helped by the opportunities for deals with wind projects exiting their period of support under the country’s EEG mechanism, Dickson explained.

In Europe more generally, the sector should get a big boost from the instruction to member states to remove barriers to renewable corporate PPAs in the EU’s latest renewable energy directive, approved by the EU Parliament earlier this month and also including helpful measures on Guarantees of Origin (see panel). Some member states are already acting on that, said Dickson, citing the example of Bulgaria and its removal of power trading regulations that stifled opportunities for the striking of PPAs.

The WindEurope CEO hopes that all the above will help corporate renewable sourcing gain more traction in sectors where it has lagged. The pulp and paper industry, for example, has yet to make the leap. “And we want the public sector involved – hospitals should be signing them, they’re big energy consumers,” Dickson said.

As in the wider corporate renewable energy field, the US has led the way in aggregated corporate PPAs, which have emerged as one of the key trends in the sector there over the last 18 months allowing smaller, less experienced power consumers to follow in the slipstream of a major player.

Kyle Harrison, a specialist in corporate energy strategy for Bloomberg New Energy Finance, said aggregated deals made up 40% of the 5.9GW of corporate PPAs signed in the US this year so far.

The model was illustrated perfectly by the PPA announced in August 2018 involving a group of power users led by Apple, but also including insurer Swiss Re, computing specialist Akami and online marketplace Etsy. Between them the partners signed up for power from a 125MW wind farm near Chicago and a 165MW PV project in Virginia, both still under development.

Harrison said that deal is part of a growing wave of such arrangements in the US market. “In the last year or two this has really become apparent. It’s led to a shift from just tech companies dominating the corporate procurement space and opened the way for a much bigger pool of corporate buyers.”

By joining a major “anchor tenant” – in this case Apple – the other partners can enjoy “economies of scale and from a big solar or wind project, something they weren’t able to do before” and “lean on Apple for help with the regulatory and legal hurdles to signing a PPA”, Harrison explained.

The growth of aggregated deals does bring some extra comlexities to the corporate PPA market – for example the need for mechanisms to ensure projects underpinned by a diverse range of entities, some more creditworthy than others, meet the threshold of acceptability to financiers.

But the many advantages mean WindEurope’s Dickson is keen to see aggregation gain traction in Europe too. He points out that Europe has only seen one such deal so far, a 2016 wind PPA involving Google, Philips and AkzoNobel.

“We need a clear business model for aggregation. We’re working very actively on this in the RE-Source platform,” said Dickson. “We want aggregation on the supply side too. In countries like Germany with lots of smaller wind farms, they should be able to come together and sign a PPA with a larger energy-intensive offtaker.”

Transition

Corporate renewables looks to wider horizons