By EUCI Energize Weekly.
Corporate power purchase agreements, initially the domain of high-visibility, multi-billion-dollar enterprises, are increasingly being used by smaller companies, as well as municipalities and non-profit institutions.
The use of the agreements, or PPAs, has soared in the last two years and is on pace for another robust year, according to the Rocky Mountain Institute’s Business Renewables Center (BRC) Deal Tracker.
To be sure, there are some financial and operational risks with PPAs, but they haven’t deterred the growth of the market, which is composed largely of companies seeking to meet sustainability or renewable energy targets or cut greenhouse gas emissions.
PPAs have long been used by utilities to purchase power on long-term contracts from independent generators. Selling clean power to companies with renewable energy or sustainability goals began around 2008.
Among the first high-profile corporate PPAs were those signed by Apple, Google and Microsoft. In the last two years, old-line manufactures such as 3M, Dow Chemical and General Motors have signed agreements.
Last Friday, JPMorgan Chase & Co. announced it is seeking to be 100 percent reliant on renewable energy by 2020 through a series of initiatives, including installing onsite renewable energy facilities, improving energy efficiency and PPAs.
JPMorgan signed its first PPA in 2016, a 20-year agreement with NRG Energy for a 100-megawatt (MW) wind farm in Texas. In its announcement, the bank said it plans to sign more PPAs.