New corporate PPAs signed through June 15 reached 1,240 megawatts, a little ahead of the pace in 2016, according to the Rocky Mountain Institute.
Companies signing power purchase agreements this year to buy renewable electricity are Goldman Sachs, General Mills, Apple, T-Mobile, DeAcero, Anheuser-Busch InBev, Solvay, Facebook and Paypal.
More than 95 US companies have pledged to move to 100% renewables. Google and Lego have hit or are expected to hit their targets this year.
Fortune 250 companies should remain fertile ground for corporate PPAs, especially those in the second tier of the Fortune 250. Thirteen percent of Fortune 100 companies have signed corporate PPAs against 63% that have set sustainability goals. Only 0.6% of companies in the Fortune 101 to 250 have signed corporate PPAs, while 53% have sustainability goals.
Eighty-three percent of corporate PPAs to date have been virtual PPAs in organized electricity markets. Under a virtual PPA, the electricity generator sells the electricity into the local power market and then swaps the actual revenue received for fixed payments from the corporation that entered into the PPA. The corporation uses the floating payments from the generator to buy the electricity it actually uses in the local market. The virtual PPA is a way for the corporation to lock in a fixed long-term price for electricity.
Another potential growth area, besides the second tier of Fortune 250 companies, is in parts of the United States without organized electricity markets, using such structures as green tariffs, direct access or retail sleeves. Under a retail sleeve, the electricity runs through the local utility to the customer via back-to-back power contracts with the utility.