Private PPAs for renewables reach 5.4 GW in 2017, BNEF says

A total of 5.4 GW of power purchase agreements (PPAs) between private companies and renewable energy power generation asset owners were signed last year, according to a report by Blomberg New Energy Finance (BNEF) titled, Corporate Energy Market Outlook.

Last year’s result, BNEF stressed, surpassed that of record year 2015, in which private PPAs for renewables at the global level reached 4.4 GW, and that of the previous year, in which a combined capacity of 4.3 GW was contracted.

Deals in 2017 relate to 43 corporations in 10 countries. Last year’s largest PPA market was the U.S., which grew by 19% year-on-year, with around 2.8 GW of contracted capacity. In this market, however, the likely imposition of duties on Chinese solar imports is currently creating uncertainty, as developers “cannot accurately price PPAs with corporations and other offtakers in the meantime.”

Last year’s second largest market was Europe, with over 1 GW signed, BNEF reported. Most of the contracted power in the Old Continent, however, came from wind power deals in the Netherlands, Norway and Sweden. In those countries, policy mechanisms allow developers to secure subsidies, while also giving corporations the ability to receive certificates to meet sustainability targets.

As for solar PPAs in Europe, which are not cited in the BNEF report, pv magazine has reported so far on a private PPA for around 60 MW of solar in central Italy, on three private PPAs in the U.K., and of Spain’s and Portugal’s first private solar PPAs.

“The growth in corporate procurement, despite political and economic barriers, demonstrates the importance of environmental, social and governance issues for companies,” said BNEF analyst Kyle Harrison.

Looking forward, BNEF expects the volume of contracted power in this segment to surpass 2017’s record level of activity. Especially Latin America and Asia are pointed out as markets that will be able to attract major activity in 2018 and the coming years, although these regions are currently known for their low level of development of the private PPA market.

As for China and Japan, BNEF stressed that there are still too many regulatory barriers currently preventing this market from developing.