European companies bought a record amount of wind and other renewable energy last year, as energy-intensive companies such as aluminum producers and IT giants are looking for greener ways to boost their machinery and data centers .
Companies across Europe have signed close to 5 GW of power purchase agreements (PPAs) with wind farms. This is almost equivalent to Denmark’s total wind energy capacity. These PPPs only started in 2014 and mainly in the ICT sector to boost the data centers. But now energy-intensive industries are also signing them.
2018 saw 1.5 GW of new PPA agreements with wind farms. And the aluminum sector was the most active, with Norsk Hydro and Alcoa signing large agreements in Sweden and Norway. Pharmaceutical and automotive products also made their first renewable energy purchase agreements, with Mercedes-Benz announcing agreements in Poland and Germany. The latter will use wind power to feed Mercedes’ electric vehicles and to manufacture batteries.
PPAs provide the industry with a long-term energy supply at fixed prices. Most of the contracts are around 15 years old. The last year of Norsk Hydro was 29 years.
The Nordic countries still have the largest amount of PPPs. But in 2018, Germany, Spain and Poland obtained their first PPAs. France and Italy are also looking into them. The EU Clean Energy Package will help: it requires governments to remove the remaining regulatory barriers for PPPs.
“Corporate energy purchase agreements are booming. Industrial consumers in a wide range of sectors have now purchased about 5 GW of wind power through PPA. In 2018 there was a record number of new agreements, and the first energy purchase agreements in the automotive and pharmaceutical sector, and the first in Germany, Spain and Poland. In Germany, Mercedes is now going to use wind power to power its electric cars and battery factories. It’s a great announcement for wind energy.” WindEurope CEO Giles Dickson said.
“It shows that industrial consumers see wind power as competitive and reliable. And it will help the industry reduce its energy costs. The benefits of CO2 are also great: the industry accounts for more than half of the electricity consumption in Europe. But some countries still have barriers to PPPs. They will have to withdraw them under the Clean Energy Package of the EU. And they should say how in their National Energy Plans this year,” the CEO added.
2018 was the fifth year in a row in which global renewable energy investments have surpassed $300 billion worldwide.
In its latest study on the financing of clean energy, Bloomberg New Energy Finance figures to $ 332.1 billion of all global capital raised on renewable technologies.