With energy prices unusually high, large energy users are evaluating where do they find value in the energy market to reduce costs and reduce their carbon footprint. The immediate outlook is that prices are likely to remain high from the sustained period of low wind output, strong gas and carbon prices (due to lack of gas storage and reduced level of renewables in 2021).
Corporate PPAs can be very useful in avoiding volatile market prices for consumers. In today’s market, corporate PPA prices are an attractive alternative to wholesale energy prices. The European Commission has singled out CPPAs as a key part of their toolbox of measures to tackle the current situation in energy markets. PPAs are typically signed over long periods, guaranteeing corporate consumers a fixed electricity price and hedging against market risks.
The European Commission also states renewable energy sourcing continues to boom across Europe. PPAs and on-site sourcing are set for another record year. With months to go, the volume of PPAs signed in 2021 has already surpassed the 3.5 GW signed in 2020, making 2021 the eighth record year in a row. European Commercial and Industrial on-site installations are also enjoying rapid growth, with forecasts showing they could reach a total capacity of 407 GW by 2030.
The current surge in energy prices is likely to further increase the demand for corporate renewable PPAs as businesses look to hedge against volatile energy prices.”
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