by Woodson Powell
According to the American Wind Energy Association’s (AWEA) Q4 2015 market report, about 75% of the megawatts contracted through power purchase agreements (PPAs) during the fourth quarter were non-utility buyers (companies, city governments, universities) [http://blog.rmi.org/blog_2016_02_22_us_wind_power_demand_corporations_take_the_lead]. That spike in corporate contracts is not simply reflective of a shift in contracting, but also of the growth in the wind power industry. The AWEA’s report notes that the United States wind industry installed 8,598 megawatts in 2015, 77% more than 2014 [http://awea.files.cms-plus.com/FileDownloads/pdfs/4Q2015%20AWEA%20Market%20Report%20Public%20Version.pdf]. Historically, utility-scale wind power was mostly purchased in the form of large wind farms, because it was an efficient way for states to meet their renewable portfolio standards. Nowadays, corporate purchasers are entering the market, because wind power has good value, not just because of government mandates.
PPAs tend to be focused on creative and innovative contracting structures that achieve a wide range of goals such as sustainability and supplying a hedge against the rise of future energy prices. For example, Lockheed Martin recently had a 30 megawatt deal for solar power, aimed to fit the company’s corporate structure and to provide benefits to different sections of their budget. There is room for corporate contracting to grow (the emergence of corporate purchasers has only taken place over the past three years) and the demand they have shown is promising. Last year, corporations signed 3.44 gigawatts of PPAs. This a good sign for the institutions aiming to increase non-utility renewable spending, like the blue ribbon commission, which wants to facilitate 60 gigawatts these type of purchases by 2025. Another hope is that growth in this market will increase interest in other companies to follow suit.
American Wind Energy Association. “U.S. Wind Industry Fourth Quarter 2015 Market Report.” (n.d.): n. pag. AWEA Files. AWEA Data Services, 27 Jan. 2015. Web. 22 Feb. 2016.
Labrador, David. “U.S. Wind Power Demand: Corporations Take the Lead.” RMIOutlet. Rocky Mountain Institute, 22 Feb. 2016. Web. 22 Feb. 2016.