Corporations purchased a record-breaking 31.1 gigawatts of clean power through power purchase agreements in 2021, according to research firm Bloomberg New Energy Finance. Purchases are up nearly 24% from 2020, the former record year at 25.1 gigawatts.
Purchases were driven by activity in the U.S., which accounted for nearly two-thirds of PPAs. Also driving growth was large technology companies, who collectively signed more than half the deals. In total, more than 137 corporations in 32 different countries publicly announced clean energy contracts in 2021.
Two prominent factors driving growth are increasing affordability of renewable energy as technologies continue to mature and the opportunity to demonstrate sustainability commitments as public and investor pressure mounts for climate action.
Kyle Harrison, Head of Sustainability Research at BNEF, commented:
“It is no longer a matter of whether corporate clean energy procurement will grow each year, it’s a matter of how much. More corporations are making new sustainability commitments, costs for renewables are plummeting and regulators around the world are slowly coming around to the fact that clean energy might be a silver bullet in the decarbonization of the private sector.”
Within the power purchase agreement market, virtual PPAs dominated the market, accounting for 12 of the 17 gigawatts represented by the U.S.
With regard to tech companies, Amazon was the largest PPA buyer with 44 offsite PPAs in nine countries totalling 6.2 gigawatts. Amazon is the 12th largest energy buyer overall and the top corporate energy buyer with a total PPA capacity of 13.9 gigawatts. Microsoft and Meta have the next largest among corporations, at 8.9GW and 8GW, respectively. Previously, Google led the corporate clean energy pack, but has turned its attention to sourcing 24/7 carbon-free power through methods outside of PPAs.
Helen Dewhurst, Senior Associate at BNEF, commented:
“The clean energy portfolios of big tech companies now rival those of the world’s biggest utilities. Big tech faces mounting pressure from investors to decarbonize and this is reflected in the steep increase in clean energy volumes purchased. The PPAs inked in previous years pale in comparison to the portfolios announced in 2021.”
Sixty seven companies set an RE100 target in 2021, pledging to offset 100% of their electricity demand with clean energy. In total, the campaign represents 355 members across 25 countries.