Amazon retains green power crown in record year for corporate renewables: BNEF
Energy demand from artificial intelligence was among the factors pointing to a new 'surge' in corporate power demand
Online retail behemoth Amazon was the largest private buyer of renewable energy again last year as corporate green power deals surged to record levels despite a US downturn, according to a BloombergNEF report.
Amazon led corporate green power purchases for a fourth straight year, snapping up 8.8GW of clean energy capacity across 16 countries.
That is almost a fifth of the 46GW of power purchase agreements (PPAs) signed last year, said BNEF, up 12% on the previous record of 41GW in 2022.
Now at 33.GW, Amazon’s clean energy portfolio was described as “greater in size than the power generation fleets of markets like Belgium and Chile.”
The next biggest buyers were Facebook owner Meta, US chemicals company LyondellBasell and Google.
France’s Engie sold 2.4GW of clean power to corporations in 2023, more than any other developer.
According to BNEF, since 2008, corporations have announced PPAs for 198GW of solar and wind – “greater than the power generation capacity of countries like France, the United Kingdom and South Korea.”
Kyle Harrison, head of sustainability research at BNEF and lead author of the report said it has “never been easier to buy clean energy as a corporation.”
“For the first time, a variety of contracting structures are now widely available around the world to help companies decarbonise their energy consumption. These contracts are now the centrepiece in many companies’ sustainability strategies, rather than a nice-to-have.”
Some 45% (20.9GW) of corporate PPAs announced in 2023 were in the Americas, followed by Europe at 33% (15.4GW).
The volume of corporate PPAs in Europe grew by 74%, “by far the largest growth of any region.”
“As supply chain woes eased and gas balances normalised following the region’s energy crisis in 2022,” sparked by Russia’s invasion of Ukraine, BNEF said “corporate PPA prices in the region dropped, often faster than power prices.”
“As a result, the economics for signing deals were much more attractive in European markets like Spain, Germany, the United Kingdom and the Netherlands. Collectively, these four countries made up over half of the deals announced in the region in 2023.”
The US remained the largest market for PPAs, with 17.3GW of deals announced, but this was down 16% from the record 20.6GW announced in 2022.
The economics for signing PPAs was “far weaker in the US” than Europe, found BNEF.
This is because developers were “locked into expensive equipment contracts signed in prior years during supply chain bottlenecks.”
“Coupled with high interest rates, this caused US PPA prices to increase 4% in the first half of 2023. Power prices didn’t rise at the same rates, resulting in buyers holding off on signing deals until the market recalibrates.”
Corporate power demand is meanwhile set to “surge” in the coming years, said Harrison, citing the “rise of artificial intelligence, electrification of transport and increased need for manufacturing.”
BNEF estimates that companies with 100% clean energy targets as part of the RE100 corporate initiative, which has 451 members, will need an additional 105GW of solar and wind by 2030.
“This number is far larger when looking at all companies,” it added.
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