In light of Europe’s energy crunch, the European Commission has endorsed easy access to corporate renewable Power Purchase Agreements (PPAs).
PPAs are important instruments in the Commission’s newly released toolbox which guides the Member States on how to deal with the current surge in energy prices and strengthen resilience against future shocks.
By easing the access to PPAs, the goal is to protect European businesses through accelerating the transition to an energy system with a high share of renewables and expediting permits for new renewable projects.
Walburga Hemetsberger, CEO of SolarPower Europe evaluated the current electricity price hike as “a wake-up call” and urged to “fast-track the transition to 100 per cent renewable electricity systems”. She added that now that the European Commission recognised the strategic importance of renewable Power Purchase Agreements businesses which need to “invest in reliable, low-cost renewable electricity”.
With PPAs and on-site corporate renewable energy sourcing booming in Europe, her suggestion is to “go even further and faster by accelerating the development of regulatory frameworks for PPAs, taking enabling measures like standardised contracts and creating incentives for end-users.”
The volume of PPAs signed in 2021 has already surpassed the 3.5 gigawatts (GW) signed in 2020. European Commercial and Industrial on-site installations are enjoying rapid growth too, with forecasts showing they could reach a total capacity of 407 GW by 2030. The spike in energy prices is likely to further increase the tendency.
However, PPAs are not limited to large corporate electricity consumers. As the European corporate PPA market grows, a more diverse group of organisations is signing PPAs and on-site deals, including cities, SMEs, universities and State-owned agencies.
Hannah Hunt, Impact Director at the RE-Source Platform which connects corporate buyers and renewable energy suppliers, anticipates that the Commission’s support of PPAs “will only increase the number of businesses looking to source renewable electricity” and that this is “no longer a thing of a few large companies”.
When it comes to one specific renewable, solar power, for instance, Claire Couet, Policy Director at SolarPower Europe expects that the acceleration of solar PPA’s will triple the number of solar jobs to over 1 million in 2030.
According to her, this presents an “enormous opportunity to reskill declining industries and revitalise local economies” but also fight energy poverty since “installing solar panels on vulnerable households can offer immediate relief and invigorate struggling communities.”
Solar is already insulating millions of Europeans from price shocks. According to the calculations of SolarPower Europe, households with existing solar installations are saving around 60 per cent on their monthly electricity bills during the electricity price surge.