Dive Brief:
- The list of corporate purchasers of wind and solar is beginning to expand rapidly. Last week, Hewlett-Packard announced a 12-year contract for 112 MW from a SunEdison Texas wind project. And a long term contract with Amazon Web Services allowed Iberdrola Renewables to break ground on the 208 MW Amazon Wind project in North Carolina, the Southeast’s first utility-scale wind installation.
- In February, Kaiser Permanente signed a 20-year contract for 153 MW of California wind and solar. In March, Dow Chemical contracted for 200 MW of Texas wind.
- One big driver behind many of these contracts is the companies’ need to meet corporate sustainability goals. The HP contract will allow it to get to its targeted 2020 greenhouse gas emissions cut of 20% from its 2010 level by the end of this year.
Dive Insight:
The 2013 extension of wind’s vital production tax credit, with crucial “under-construction” language that allowed a two-year development process, led to a “wind rush” in the U.S. that made Q2 2015 the second biggest Q2 in the industry’s history. With over 13,600 MW under construction, 2016 is expected to be equally strong. But utilities lost 23% of the capacity to new players in 2014 and the trend is continuing.
“Among the 4,854 MW commissioned during 2014, 40% of the capacity was contracted under long term [PPAs]… and 26% is utility-owned,” according to 2014’s "U.S. Wind Industry Annual Market Report" from the American Wind Industry Association (AWEA).
That 40% of capacity installed through PPAs “is down significantly from the 75% of capacity installed in 2013 [and] 76% of capacity installed in 2012,” the report adds. But some 60 non-utility entities have contracted for wind, including IKEA, Facebook, Google, Mars, and Anheuser-Busch. Like utilities, corporate buyers like renewables for the hedge the long term, fixed-price contracts provide against fossil fuel price volatility.
