Net Additional Renewable Energy Capacity under PPA to Reach 106GW in 2027 as Enterprises Seek Sustainable Energy and Stable Costs

PPAs are the only real solution that can scale to meet global needs and sustainability targets without burning a hole in costs. Torbet explains, "PPAs will become more common as governments enact policies for transparent emission reports while reducing incentive programs for renewable technology. These PPAs will be more advertised, with enterprises showcasing their contribution to net zero targets as the public trends toward more sustainable practices. For example, Asia-Pacific has seen the greatest growth with a CAGR of 74%, but this is mainly from such a small installed capacity back in 2018. This growth is unsustainable but may surprise the world at the rate they will keep." 

PPAs are the only real solution that can scale to meet global needs and sustainability targets without burning a hole in costs. Torbet explains, "PPAs will become more common as governments enact policies for transparent emission reports while reducing incentive programs for renewable technology. These PPAs will be more advertised, with enterprises showcasing their contribution to net zero targets as the public trends toward more sustainable practices. For example, Asia-Pacific has seen the greatest growth with a CAGR of 74%, but this is mainly from such a small installed capacity back in 2018. This growth is unsustainable but may surprise the world at the rate they will keep." 

As more countries invest in renewables, the amount of assets needing funding will become problematic if the plan is to sell to the open market. PPAs are a way for asset owners to secure future revenue and lower the risk for investors. This is why the global growth for PPA capacity has grown by 29% in the last four years. Ørsted has enabled Danfoss, advanced technology engineers, to secure 27 MW of power, offsetting 31,000 tons annually.

Cost and Utility engagement are the main energy challenges for enterprises. "Their need for clean energy and stable prices drives purchasing strategies nowadays. PPAs are a tool that only larger companies (such as Amazon, Microsoft, and Google) have been able to utilize to its full extent. Still, variance from the standard PPA type will allow more enterprises to enter the market and help invest in cleaner energy," Torbet concludes.

These findings are from ABI Research's Energy Purchasing Strategies for Enterprises application analysis report. This report is part of the company's Smart Energy for Enterprises and Industries research service, which includes research, data, and ABI Insights. Based on extensive open-sourced data, Application Analysis reports present in-depth analysis of key market trends and factors for a specific technology.

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