Corporate PPA Trends in the Global Market

There has been significant growth in the number of Corporate PPA deals signed in numerous industries across the globe year-on-year, with a record 46GW of clean power deals being contracted via Corporate PPAs in 2023 [source]. The trend towards the Corporate PPA in the energy market has mostly been fuelled by:

1. Global sustainability, decarbonisation and net-zero goals.
2. Energy security and climate change.
3. The benefits associated with directly sourcing renewable power (Corporate Social Responsibility, supply diversification, economic incentives, and reputational goals).
4. The ongoing rise of energy prices and the desire for price certainty.
5. The need for flexible and tailored agreements to suit the commercial and financial needs of corporations and power generators.

The most prominent players in the global Corporate PPA market remain technology companies (Amazon, Meta, Google and Microsoft) and data centre owners, followed by telecommunications, ICT and heavy industries. Amazon remains the largest corporate clean energy buyer in the world, having announced 8.8 GW of PPAs across 16 countries, including 5.6 GW of solar PPAs [source]. Contributions to the market by other sectors such as transport, automotive and retail is also currently on the rise.

The US remains the largest market for Corporate PPAs in 2023 with 17.3 GW of deals announced, though this was down by 16% from 2022 levels. Europe was the fastest growing PPA market in 2023, with Germany, Great Britain and Spain topping the rankings. Regulatory reforms, such as the EU’s defining of the requirements for green hydrogen PPAs and its decision to opt for soft reform of the electricity market, are key drivers of growth in Europe. Over the past two years, due to the energy crisis and the impact of the invasion of Ukraine on the supply of gas, deal activity in EMEA has declined. However, since 2023 activity has risen quite significantly with and increasing preference of the virtual PPA. The virtual PPA represents a purely financial transaction in which power is sold directly to the wholesale market. The virtual PPA therefore does not involve with sale of power to a corporation but is instead a contract for difference and gives corporations the opportunity to hedge a fixed price for energy output and renewable energy certificates against a variable (and currently volatile) market price. This structure has allowed corporations to show a commitment to renewable energy and efficiently meet their environmental goals at a lower cost, whilst also accruing financial benefit, if the wholesale market price if more than the agreed fixed price.

It is expected that global corporate PPA activity will continue to further increase in 2025 amidst global energy market reforms, sustainability, and decarbonisation goals.

If you would like to find out more, please visit our Corporate PPA Hub or get in contact with us.