Businesses Are Buying More Renewable Power Than Ever Before
Companies are buying renewable power at a record pace. Buyers already signed deals for 3.3 gigawatts this year. On pace to break record of 4.8 gigawatts set in 2017.
AT&T Inc. and Walmart Inc. are among 36 businesses, government agencies and universities that have agreed to buy 3.3 gigawatts of wind and solar power so far this year. That’s on track to shatter the previous high of 4.8 gigawatts of disclosed deals last year, according to a report Monday by Bloomberg New Energy Finance.
One of the key reasons is that smaller companies are more comfortable doing these deals now.
“There’s a blueprint now,” said Kyle Harrison, a New York-based analyst at Bloomberg New Energy Finance. “So it’s a lot easier for other companies to do it.” In addition to the 4.8 gigawatts in announced deals last year, BNEF also estimates 600 megawatts of undisclosed contracts were signed in Asia.
The gains are also due to local renewables program and growing demand in international markets like Mexico and Australia.
Buying Binge
There are several reasons clean power is attractive. Renewable energy is often the cheapest source of electricity. Long-term contracts to buy clean power from wind and solar farms can also act as hedges against uncertain wholesale prices.
Google and other big technology companies have driven the trend, but the pool of clean-power buyers is deepening.
Smaller companies have benefited from growing standardization in the ways companies agree to buy clean energy. Sometimes these companies are recruited to buy wind and solar power from the same power plant as larger buyers that function “like anchor tenants,” Harrison said.
Other findings from the BNEF report:
Of the 3.3 gigawatts of clean-power deals signed this year, 76 percent involve U.S. power projects
The 15 clean-power deals signed globally in April will add almost 1.1 gigawatts of new wind and solar power
Industrias Penoles SAB signed the largest agreement in April, a 245-megawatt wind-power contract that’s also the biggest such deal in Mexico since a landmark energy-market reform
Mumbai Metro signed India’s second-biggest corporate power-purchase agreement
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