Corporate US clean energy procurement surges to record in 2022 as solar outpaces wind: ACP
Led by the technology sector, 326 companies ended last year having contracted a cumulative 77.4GW of clean energy including 45.05GW of solar
US corporations purchased almost 20GW of clean energy in 2022, surpassing the prior year record by about 4GW, with economic and environmental benefits and growing pressure to meet sustainability targets driving greater procurement, according to a new report by American Clean Power Association (ACP).
Those reasons have led to a “100-times increase in corporate clean power procurement over the past decade,” said interim CEO JC Sandberg and chief strategy officer at ACP, a national trade group based in Washington, DC.
Last year, corporate contracts for solar totaled a record 14.46GW while onshore wind deals were 4GW, a 25% increase from 2021, ending a three-year slide. Currently, no corporations have offtake agreements for offshore wind in the US.
ACP said hybrid projects that include storage – primarily solar plus storage – are growing rapidly. Pairing solar with storage allows corporations to benefit from firmed generation and the ancillary services available from battery storage, depending on contract terms.
More than 1.3GW of solar plus storage deals were announced in 2022. Wind plus storage projects are relative uncommon with 12 contracts thus far totaling 548MW of capacity.
At yearend 2022, 326 American corporations led by the technology sector had contracted 77.4GW of clean energy including 45.05GW of solar, 28.83GW of onshore wind, and 974MW of battery storage.
In top spot was Amazon with 12.41GW, then Meta (8.68GW), Google (6.17GW), Microsoft (4.51GW), and Verizon (3.61GW).
By sector, companies in technology held 48% of total clean energy procurement, followed by energy (9%), telecommunications (8%), food and beverages (7%), and industrial (6%).
Sandberg noted that solar and wind costs have decreased 71% and 47%, respectively, over the last decade, making both more attractive for corporate energy buyers.
“American companies are benefitting from - and contributing to – the affordability of clean power,” he said.
Still, in 2022, national average corporate PPA prices moved in the opposite direction with those for wind up 37% to $49.66/MWh year-on-year, and 30% for solar to $42.21/MWh.
Despite rising wind and solar prices, both remain attractive options to corporate buyers due to high wholesale prices, according to the report. While most corporations don’t purchase electricity in the wholesale market, higher wholesale prices are ultimately reflected on their utility bill.
Additionally, ACP said corporations still need to meet renewable energy goals, so are more motivated to sign PPA contracts, even at higher prices.
Even so, if solar and wind prices continue to escalate, such a trend would diminish the economic argument for renewables versus natural gas, and this could affect procurement by companies already facing higher costs from inflation at nearly a 40-year high.
(Copyright)