Tuesday, January 25, 2022

Q4 2021: Amazon gets bigger, industrial players engage, deal format | greenbizo

This article is taken from Energy Weekly, a free newsletter about the clean energy transition.

Corporate demand for renewable energy remained strong in 2021, despite supply chain disruptions and economic uncertainties. The fourth quarter saw the second largest capacity addition by US companies, reaching 6.7 gigawatts (GW). The largest ever recorded increase in capacity for a quarter was 7.3 GW in Q4 2020.

The last quarter of the year saw the continuation and expansion of several key clean energy buying trends: big deals getting bigger, more industries getting involved, more resource types available and deals taking on new structures.

Amazon gets even bigger

Much of the quarter’s capacity came from one usual suspect: Amazon. The online retail giant and web services provider announced the largest bundle of clean energy procurement contracts to date: 18 projects that collectively reach 5.6 GW.

This amount dwarfs the previous capacity record, also set by Amazon: 3.4 GW in Q4 2020. The company says the latest deal increases its total clean energy capacity by 40 percent.

In addition to its own operations, Amazon says the purchase will cover the electricity used by each customer’s Echo device, indicating that the company is considering Scope 3 emissions within its clean energy goals.

The massive purchase further highlights Amazon’s approach to clean energy purchases. While other clean energy leaders, such as Microsoft and Google, are working to better meet real-time energy demands with carbon-free energy sources, Amazon is getting bigger where it typically operates. is working to increase the amount of clean energy. Thankfully, both methods are needed to decarbonize electricity.

offshore wind blows

In the last quarter of 2021 three US-based corporations signed on to Oersted’s new offshore wind project in Germany: Borkum Refgrund 3.

While the Clean Energy Tracker has included offshore wind deals in the past – Microsoft in 2019, Amazon and Nestle in separate deals in 2020, and Amazon in Q1 2021 – three separate agreements by BASF, Google and Amazon We have the most seen in a quarter.

According to a release from the developer, Borkum Refgrund 3 is the first large-scale offshore wind farm to be awarded zero bidding, meaning the project will depend entirely on wholesale electricity prices. This explains why the length of the power purchase agreement for BASF is so long – 25 years, the longest terms yet for an offshore wind purchase – and indicates that the cost of offshore wind, when factors align, Becoming cost-competitive.

Industrial players turn to clean energy

The number of players in corporate clean energy purchases continues to expand, with more industrial and manufacturing companies turning to clean energy deals. More than half of the 11 top contracts mentioned in the latest tracker come from companies in the manufacturing, chemical and industrial sectors. This is notable because tech giants usually dominate this roundup.

Chemical giant BASF signed the aforementioned offshore wind deal as part of its goal to reduce its emissions by 25 percent by 2030. While the target may not sound as ambitious, it is doable given the challenge of decarbonizing the chemical industry.

“In the common fight against climate change, it is partners like BASF that will make the difference,” Orsted CEO Mads Nipper said in a statement. “The path towards decarbonization in the chemical sector is a challenging path, but it will also make the biggest contribution.”

Other industrial players involved in top deals in the last quarter include PPG Industries, a supplier of paints, coatings and specialty materials, Dow Chemical, and railroad company Norfolk Southern.

Deals become harder to track

Since the launch of the Clean Energy Deal Tracker, I’ve been pleased to see the proliferation of contract models and types of companies that have become involved. Looking to 2021, I agree that this spread makes this tracker – and the rigid format for reporting capacity – limited.

Last quarter featured smaller companies and interesting deal formats that could not easily be included in our table. for example:

  • As mentioned earlier, railroad company Norfolk Southern Corporation struck deals to purchase 100 percent renewable electricity to supply operations in areas of Pennsylvania.
  • American supermarket chain The Giant Company signed a deal to power its Pennsylvania operations.
  • ECOS, the sustainable cleaning products brand, signed a community solar agreement to power 100 percent of its operations.

Deals like this are important. They show how corporate clean energy procurement is becoming more democratic and accessible to more customers.

To acknowledge the changing nature of corporate clean energy procurement, GreenBiz is exploring new partnerships to elevate our buying trend tracking. stay tuned.

[Interested in learning more about energy marketplace news, trends & analysis? Subscribe to our free Energy Weekly newsletter.]

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