Joint power purchase agreements (PPAs) that aggregate corporate demand could be the way forward for companies wanting to run their business on renewables, a new report states.
The firms – chemicals company AkzoNobel; health, nutrition and materials outfit DSM; technology firm Google and health technology company Philips – have jointly signed two PPAs so far, one in October 2016 for the 102 MW Krammer Wind Park and one in December 2016 for the 34 MW Bouwdokken Wind Park, with each company contracting for 25 per cent of the wind farm’s output.
According to the case study, the first deal took 36 months to accomplish due to the need for the companies to reach agreement on governance. However, the RMI said the structure established will be “easily replicable” going forward. The second PPA took around six months.
The deals are among the earliest examples of aggregated corporate demand successfully transacting in renewables markets and offer a potentially replicable model, the RMI said.
Among the benefits for the companies found in the case study were economies of scale, cost-sharing, portfolio diversification and risk management. The Netherlands was chosen as the preferred location as three of the four firms are headquartered there, while Google operates a number of high energy use data centres in the country.
Roberto Zanchi, senior associate at the RMI and lead author of the case study, said: “We feel strongly that aggregation can be a winning strategy for corporate renewable energy buyers, and this model shows that it is indeed possible to align across business motives, priorities and operational teams to get to yes on a PPA.”