The market for the corporate renewable energy power purchase agreement has grown significantly over the last three years, according to a new report by Baker & McKenzie.
The report, based on a survey of more than 100 senior executives, indicates a number of businesses are now purchasing electricity under long-term renewable PPAs directly from independent generators, as well as investing in generation assets instead of buying power direct from utilities.
Survey respondents expect the UK, Germany, South Africa, Mexico, Chile, Brazil, India and China to contract more renewable energy capacity under PPAs in the next 18 months than in the last 18 months.
Corporate renewable PPAs bring economic and sustainability-related advantages to the contracting parties, which is propelling the trend across the globe. Almost 90 percent of surveyed corporates, utilities, IPPs and investors believe more corporates will enter into PPAs in the next 18 months than in the past 18 months.
Corporate renewable PPAs are especially on the rise in the US, where almost 1.6 GW of renewables capacity was contracted in H1 2015, up from 1.4 GW in 2014 and more than double the 600 MW contracted in 2013. According to the Firm’s report, the last three years have seen a significant increase, compared to the total of 650 MW that was contracted between 2008 and 2012.
“The uptick in PPAs in the renewable energy sector shows no signs of slowing down as companies appreciate the economic and sustainability benefits,” Baker & McKenzie Partner Clyde “Skip” Rankin III said.
To download Baker & McKenzie’s report, “The rise of corporate PPAs – A new driver for renewables,” visit our Global Renewable Energy and Clean Technology webpage, http://www.bakermckenzie.com/RenewableEnergy/