Driven by both societal and customer demands, companies around the world are increasingly acting on sustainability issues.
Buying renewable energy is perhaps the most important method for corporate leaders to reduce emissions impacting climate. Read on as we explore three ways renewable energy can be purchased and outline the key trends now driving and shaping markets.
Buying green electricity certificates that match consumption
Known as GOs to European firms and RECs over in the United States, green electricity certificates offer a way to purchase renewable energy. Although this is not a complicated process, it will not contribute to certificates of existing plants and other types of renewable buildouts.
Signing Corporate Power Purchase Agreements (CPPAs)
A CPPA is essentially a long-term contract for the supply of renewable power and associated certificates. It is typically signed using a fixed-price structure. CPPAs guarantee that energy can be easily traced back to either a specific solar or wind farm. A CPPA also reduces the risks commonly associated with fluctuations in power prices.
Investing in renewable energy assets
The third option open to corporates is to invest in assets of its own. This can sometimes be off-site through a part-share in a renewable energy project or through co-development of a greenfield project. Assets can also be installed on-site. Examples include using solar panels on a premises rooftop or using private wires connected to a wind farm close by.
Trends shaping renewable energy buying
The purchasing of renewable energy has seen a dramatic increase in recent years. The following are three trends now shaping the market as it continues to mature:
Additionality
This refers to corporate buyers incentivising renewable energy new build projects. A corporate is allowed to contribute to a renewable project in its planning stages. They can sign a CPPA, guaranteeing a revenue stream and offering the developer assurances and the certainty they need. They can then begin constructing a wind farm or other project.
For a project to be deemed additional, it must not receive subsidies.
Around the clock supply
More than 50 corporates have now successfully achieved sourcing 100 per cent renewable electricity, while hundreds more are also committed to reaching this goal. This means efficiently matching an enterprise’s power consumption with power generation from renewable sources every year. However, as ambitions increase, many corporates are trying to match their electricity demand with an equivalent quantity of renewable energy in real-time.
To enable this over an extended term, baseload renewable power like geothermal energy or containment is necessary.
Rising regulatory frameworks
Red tape still hampers growth. In terms of supply, lengthy and unreliable permitting procedures restrain the buildout for solar and wind needed to meet demand. Barriers also exist when it comes to demand. Heavy regulations often prevent renewable purchasers from taking part in the power market, but also from utilising the grid.
Removing these regulatory blocks could unleash the potential of sourcing renewable energy and produce substantial economic benefits.
Enterprises looking for a heads up on trends for the renewable energy market can look to Seamless for fresh insights.