Corporates broke new clean energy purchasing records in 2023

Corporates signed a record 46 gigawatts of solar and wind energy purchasing contracts in 2023 – up 12% from 2022’s previous record, according to BloombergNEF.

Since 2008, companies have announced power purchase agreements (PPAs) for 198 GW of renewable energy in an attempt to tackle their operational emissions. This is more than the total power generation capacity of countries like France, the UK or South Korea. 

BNEF’s data shows a clear acceleration in recent years as many companies’ renewable power targets are looming closer: almost half (44%) of the total clean energy purchased through PPAs was contracted in the last two years (46 GW in 2023 and 41 GW in 2022).

Europe led renewable PPA growth in 2023

According to BNEF, 2023 was the seventh consecutive year of growth for the renewable PPA market, which has increased by 33% on average since 2015, with hundreds of billions of dollars invested by companies into the energy transition.

Europe showed the largest increase in volumes last year at 74%, bringing total renewable PPAs in the region to 15.4 GW (33% of the global amount). The research firm attributes this increase to a significant drop in European corporate PPA prices following the region’s energy crisis in 2022. 

“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 report notes.

Meanwhile the Americas region, which has historically led the market, experienced a decrease for the first time since 2020, with 20.9 GW of new contracts (compared to 24.4 GW in 2022). The United States 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 – a drop attributed to supply chain bottlenecks and high interest rates raising PPA prices more than grid power prices.

Tech companies continue to top the clean energy PPA charts

Amazon was once again the largest corporate buyer of renewable energy, having announced 8.8 GW of PPAs in 16 countries in 2023. The tech giant has a target of powering all of its operations with 100% renewable energy by 2025 – including its cloud platform AWS.

Read also: Cloud providers’ net zero claims are not enough

Amazon was followed by Meta, chemical firm LyondellBasell and Google.

Despite this record appetite, BNEF estimates that companies with 100% clean energy targets as part of the RE100 initiative will need an additional 105GW of solar and wind by 2030. When looking beyond the RE100 initiative at all companies with renewable energy goals, the number is far larger (and will require a doubling of current investment).

“With the rise of artificial intelligence, electrification of transport and increased need for manufacturing, we expect power demand from the private sector to surge in the coming years”, said Kyle Harrison, Head of Sustainability Research at BloombergNEF. “Clean energy, especially through PPAs, will likely be many companies’ first, best option.”