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Clean Energy Deal Tracker

Q3 2020: International corporate procurements mature as U.S. deals look to quality 

After a respectable showing of deals in the first and second quarters, the domestic corporate renewable procurement market seems to have cooled slightly — though not dramatically — with U.S. companies inking 1.8 gigawatts of capacity in Q3. 

The first nine months of 2020 reached 5.8 GW, compared to 7.8 GW at this time in 2019.

Anecdotally, I’ve heard whispers that the deals in the pipeline pre-COVID have moved through, and some corporate buyers are waiting for the U.S. presidential election results to strategize their next clean energy move. 

But international markets are stepping in to pick up whatever slack uncertainty may be creating in the U.S. And while the megawatts capacity has leveled off, the U.S. market is innovating in quality, with more procurements taking a holistic look at benefits. 

Q3 2020 Clean Energy Tracker

Corporations are going beyond renewable procurements to flex on climate

This quarter, several corporate procurement announcements were coupled with broader environmental, social and governance considerations. 

Microsoft announced its largest single power purchase agreement, 500 MW of solar in collaboration with Sol Systems, which ties the buying of clean energy to environmental justice and equity. 

"We spend a lot of time talking about the energy transition needed if our society is going to transition to a net-zero economy by 2050," Microsoft’s environmental chief, Lucas Joppa, told GreenBiz’s Heather Clancy about the announcement. "Microsoft’s position is that the transition has to be an inclusive and just one."

Smaller companies are also using additional social and environmental criteria in procurement decisions. Applied Materials, for example, announced a 100 percent renewable goal by 2022 within the context of its ESG initiatives.

The focus on the quality of procurements reflects the maturation of the market, with buyers having options to scrutinize the entirety of clean energy projects, such as impacts on the land, local economy and emissions reduction. 

Earlier this month, Salesforce released a framework, "More Than a Megawatt," designed to help buyers embed social and environmental benefits into the renewable energy procurement process, hinting at the growing popularity of this lens. 

Corporations used Climate Week for holistic announcements — not procurement deals 

Q3 2019 was an impressive quarter for renewable energy transaction disclosures, fueled by New York Climate Week announcements. Of the 10 largest deals of that quarter, seven coincided with Climate Week. Both Google and AT&T announced deals that were multifold larger than what we’d seen in past clean energy trackers. 

Climate Week 2020 featured corporations going beyond talking up procurements to emphasizing more holistic targets. 

Major organizations committed to carbon neutrality for direct emissions, including Walmart and AT&T. Morgan Stanley pledged net-zero emissions from its financing activities, and General Electric announced it would exit the market for coal-fired power plants. 

A handful of organizations signed on to RE100, a commitment to procure the equivalent of a company’s annual electricity consumption from renewables, but these weren’t coupled with a frenzy of PPA announcements. 

The inclination towards holistic commitments mirrors the emphasis placed on ESG concerns in renewable deals. 

European renewable procurement market keeps getting stronger

For the third time in four quarters, some of the most interesting movement in corporate procurements is happening in Europe. 

These deals, not featured in our U.S. deal tracker, keep getting bigger and more creative. 

The largest renewable energy PPA to date was inked by oil giant Total — 3.3 GW of solar in Spain, 3 GW of which Total says will power all of its European industrial operations by 2025. This procurement is more than double the previous corporate procurement deal record holder: Google’s 1.6 GW deal, made up of 18 individual projects and announced during Climate Week last year. 

Total procured 2 GW of solar in February, bringing its procurements to a whopping 5 GW so far in 2020. 

In the "innovative models" category, Swedish utility Vattenfall announced a Dutch "Corporate PPA Collective" in which companies of all sizes can buy wind energy directly from Infinergy, a U.K.-based renewables developer. The model essentially allows the utility to act as an aggregating force, allowing small companies to get on the PPA bandwagon without needing to navigate bespoke procurement processes. 

In a sign of the strength of corporate procurements in Europe, LevelTen, the renewable project marketplace, opened an office in Spain in Q3 with the backing of Total and Equinor. 

Apple’s supply chain got a little greener, and corporate PPAs come to Asia

Apple, which recently announced carbon neutrality throughout its operations by 2030, saw its supply chain get a little cleaner in Q3. 

TSMC, a Taiwan-based semiconductor company that supplies Apple and others, inked what it calls the world’s largest corporate PPA from a single project: 920 MW of offshore wind in Taiwan. The company signed onto RE100 in July, the first semiconductor manufacturer to do so, and urged industry peers to do the same. 

TSMC’s PPA is also significant because of its locale. Corporate PPAs are new to Asia, and the deal is a harbinger of more commercial and industrial agreements to come. 

Apple says it is also applying pressure to its suppliers across Europe to move to clean energy, a necessary part to reach carbon neutrality across its manufacturing supply chain. 

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