Corporate renewable procurement

Policy Overview

With the acceleration of ESG investment trends around the world and other factors, more and more companies are taking an interest in environmental issues. Many companies are using renewable energy for the purpose of mitigating climate change. The main ways companies procure renewable energy are by generating their own electricity, purchasing from retail electricity providers, purchasing renewable energy certificates, and corporate PPAs. Corporate PPAs have received particular attention in recent years from larger companies. Corporate PPAs are long-term, fixed-price power purchase agreements between electricity consumers and renewable energy power producers. Through this, customers are able to procure renewable electricity on a stable, long-term basis, and power producers are able to develop new renewable power plants because they are guaranteed long-term income. Corporate PPAs can be broadly classified as "on-site PPAs," wherein the power generation facilities are located on the customer's premises, and "off-site PPAs," wherein the facilities are located off-site. Off-site PPAs can be further classified as "physical PPAs," wherein electricity and “environmental values” are purchased together from a specific power plant, and "virtual PPAs," wherein only environmental value is purchased from the power plant.