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Corporate Renewables Surging: Bloomberg New Energy Finance Weighs In

September 21, 2016

By Peter Bronski

When it comes to corporate renewable energy procurement, 2015 was a year for the record books, especially with respect to power purchase agreements (PPAs) for large-scale, off-site solar and wind projects. Corporations signed more than 3 GW of such deals, according to Rocky Mountain Institute. And though 2016 got off to a comparatively sluggish start, the corporate renewables market is again picking up significant steam.

Corporate renewables are the new business as usual

One week ago on September 15, Amazon announced a new deal for a massive 253 MW wind farm in Texas to complement previous solar and wind projects in Virginia, Ohio, North Carolina, and Indiana. One day later, Johnson & Johnson announced a 100 MW deal. These follow on other major deals announced and approved earlier this year, including 100+ MW of solar for Apple and Switch in Nevada and 70+ MW of solar for Walmart in the Southeast.

Then on Monday, World Resources Institute (WRI) and World Wildlife Fund (WWF) announced four new signatories to their Corporate Renewable Energy Buyers’ Principles—Cox Enterprises, Iron Mountain, LinkedIn, and Symantec—bringing the total number of signatories to 62. That same day, the RE100 announced that three more companies—Bank of America, Apple, and Amalgamated Bank—signed on to 100% renewable energy targets, bringing the RE100’s total number of commitments to 73.

Meanwhile, since the start of the year membership in the Business Renewables Center has ballooned from 74 to 152, including a more-than-doubling of corporate buyers to 74, according to the BRC’s Stephen Abbott.

In other words, renewable energy procurement is fast becoming the new corporate business as usual. And while wind deals have historically dominated the corporate off-site PPA market, solar is making major inroads. In fact, a PwC corporate renewable energy procurement report released in June noted that 96% of surveyed corporations identified solar as a priority that will dominate their purchasing decisions.

Bloomberg New Energy Finance joins the conversation

Owing to this mammoth trend, this month Bloomberg New Energy Finance (BNEF) released the inaugural issue of its new Corporate Renewable Energy Procurement Monthly. The attention of that analyst powerhouse is a testament to the size and strength of this market segment and its inaugural Monthly offers several good insights:

1. Despite a temporary slowdown, market growth will return and accelerate.

Previous looming uncertainty about the federal investment tax credit (ITC) caused an end-of-year rush in 2015 before the ITC’s extension. Early 2016 subsequently started slowly, but the market is already regaining momentum, with more than 1 GW of corporate PPAs for off-site renewables signed YTD. BNEF expects deal volume and new announcements to accelerate into 2017, with continued growth beyond. Similarly, the Solar Energy Industries Association (SEIA) and GTM Research in their latest 2016 Q3 Solar Market Insight Report expect a whopping 75% of utility-scale solar greenfield origination in 2017 to come from non-RPS projects, which will undoubtedly include corporate offtakers among the set.

2. Utilities are getting into the game.

The first half of 2016 included a contentious story: the decision of MGM Resorts International and Wynn Resorts to exit utility NV Energy’s grid in search of direct renewable energy procurement. But 2016 has also been a story of utility-corporate cooperation on that same front. BNEF noted, for example, that both the Switch and Apple solar projects with NV Energy and Walmart’s solar project with Alabama Power were examples of “green tariff” options, in which corporations procure renewable energy through their utility (not to mention Amazon and Dominion’s 2016 announcement in Virginia). To wit, in June the Edison Electric Institute, the nation’s leading trade association for investor-owned utilities, released a report, Creating Renewable Energy Opportunities, on the topic in cooperation with WWF and WRI. Solar developers, for their part, remain central to the equation regardless, whether building a project directly for a corporation, such as via a physical or virtual PPA, or by building projects for utilities who then offer that energy through to a corporate customer in a “sleeved” PPA or “green tariff” structure.

3. North America still dominates, but multinational corporations are expanding globally.

Continuing a historical trend, North America still dominates the corporate off-site renewable energy market geographically. However, multinational corporations interested in addressing their global footprint are pursuing renewable energy deals in places such as Europe, Asia, and Latin America. For example, Google has signed deals in Sweden and Norway, while the UK’s corporate PPA market has taken off since 2013. Regulatory changes in China and Japan have opened those markets. And Mexico is being hailed as one of the most promising emerging solar markets globally.

Engage with us at Corporate Renewables in Washington, D.C.

Want to learn more about corporate renewable energy procurement? Come see us next week at Corporate Renewables in Washington, D.C. The three-day event lasts from Monday, September 26 through Wednesday, September 28. On Tuesday, September 27, at 11:00 am Coronal Energy chief commercial officer Danny Van Clief will speak on the panel “Key Market Trends in Project Economics and Deal Structures.” You can also visit us at Booth #23 at the event.

Peter Bronski leads marketing and content strategy for Coronal Energy, powered by Panasonic.

Image copyright Coronal Energy, powered by Panasonic.

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