Corporate procurement is already quite popular in the US as companies such as Amazon, Google and Microsoft procure renewable energy to power their data centers, offices, and factories. As of last December, Amazon procured 650 MW, Google procured 565 MW and Microsoft 257 MW of clean power; the equivalent of two to three typical coal plants. Driven by social responsibility and a desire to lower energy costs, corporate procurement has exploded since the start of the clean energy revolution. However, growth in corporate procurement is not just limited to the US.  As of the last year or two, corporate procurement of renewables has grown rapidly internationally as well.

As corporations in Northern Europe, India, and China, assess their supply chains to find ways to procure renewable energy, they are driven by low costs, the need for reliability, and new policy incentives for clean technologies. New deals are signed each month expanding the market. For example, Bloomberg reported in September “Google added 236MW to its European renewable energy portfolio, making it the largest procurer of renewables through PPAs in the region.” Meanwhile in December Bloomberg reported “Chinese wind turbine maker Goldwind announced that it will form a joint venture . . . with Apple on wind power projects in China.” Additionally, India is one of the fastest growing corporate procurement markets in Asia driven by rising retail power prices, favorable grid regulations, falling costs of renewables, and steps by the government to deregulate the market.

The markets where corporate procurement is taking off all seem to have similar attributes. A healthy market for direct or third party purchasing eases the regulatory burden a corporate entity must undergo in order to purchase clean electricity. It promotes choice for the buyer to purchase from an independent power producer or build their own renewable energy. While rarer, in regulated markets, corporations can procure electricity through a fairly priced green tariff program or a direct utility purchase. While these type of deals are rarer, they represent an enormous opportunity to reach untapped renewable energy markets.

The diversity of market structures and their impacts on international corporate procurement is apparent when comparing the US to Europe. In an interview with Francois Sterin from Google, he said, “PPAs are more common in the US, people are more experienced with them. PPAs are only just coming to Europe. In terms of transacting with a counterpart in Europe, it has been more of a learning process, as previously you would typically have had a utility taking up the power. In the US, for instance, more than half of new wind capacity has been taken up by corporates and not utilities.”

So as the global corporate procurement surpasses 18GW in 2016, and new markets opening up in Asia, Europe and the U.S., it seems renewable energy procurement as secured its role as a vehicle for corporations to reduce their greenhouse gas emissions and create new opportunities for clean technologies.