More than ever, Europe is counting on a massive scale-up of renewables to decarbonise its energy system. The EU has raised its climate ambitions to reach ‘net zero’ emissions by 2050, in order to limit global warming to 1.5 degrees. After the Russian invasion of Ukraine in 2022, Europe has new pressing reasons to end dependence on Russian fossil fuel supplies.
Energy is now the top concern for all governments across Europe, for millions of Europeans demanding climate action, and corporates as well. Decision makers in the private and public sector face a triple challenge of climate change, high energy prices and energy security.
Direct sourcing of renewable energy is a key tool for organisations – including energy intensive industries – to decarbonise their operations and support EU Member States in their fight against climate change. It will also make European industries more competitive, thanks to the rapidly falling cost of renewables and the price hedging feature of long-term energy contracts.
Even before Russia changed Europe’s geopolitical landscape, business leaders were already investing in renewables. Hundreds of the largest companies in the world have signed up to 100% match their electricity demand with purchases of renewable energy. Energy intensive industries, SMEs and cities, and local governments are actively exploring ways to decarbonise and electrify their own energy consumption.
Corporate renewable Power Purchase Agreements (PPAs) have proven to be an important driver of the energy transition and enhancing energy security, as they facilitate market-based investments in new renewable installations in Europe, while complementing public tenders and providing renewable suppliers with stable and secure revenues. And according to the European Commission, PPAs have to play a central role in Europe’s strategy to achieving the Green Deal renewable and climate targets.
The corporate renewable energy procurement market is expanding rapidly across Europe, with 24 GW of renewable energy capacity contracted to date, representing 4% and 6% of total installed solar and wind capacity respectively. In 2021 alone, nearly 8 GW of renewable energy capacity was contracted. It
is a market that is growing exponentially, and which can contribute significantly to Europe’s climate goals if regulatory barriers are addressed. To date, corporate PPAs have only been signed in around half of the EU member states. The EU and its Member States can reach the goals set out in the Fit for 55 package and the REPowerEU plan by addressing the barriers to rapid renewable energy deployment and corporate procurement in all member states. But then they also need to design market interventions to curb high energy prices in such a way that long-term energy contracts such as PPAs are not affected.
Corporate renewable energy procurement, whether through PPAs, energy supply agreements, on-site installations or other instruments brings the following benefits to buyers, suppliers, investors and the society at large:
● Faster decarbonisation of the energy system, supporting Europe and its Member States to achieve their renewable energy and climate targets
● Competitive long-term supply of energy that is hedged against long term electricity price fluctuations
● Financial guarantees for suppliers and investors, resulting in more renewable energy projects and additional capacity
● Increased energy security in Europe
The RE-Source Platform, Europe’s leading forum for direct renewable energy sourcing, seeks to remove barriers to renewable energy procurement in support of Europe’s climate and energy goals. The massive potential represented by corporate renewable PPAs can only be realised via increased awareness and the removal of policy and market barriers that currently constrain the vast growth of renewable capacity. A growth that is needed to save our climate, stabilise energy costs and increase Europe’s security.
The goals of RE-Source are to:
1. Open markets – Influence EU and national renewable energy and energy market legislation to advance corporate sourcing
2. Create demand – Raise awareness and educate all stakeholders on the advantages of corporate sourcing renewable energy
3. Facilitate business opportunities – Connect corporate renewable energy buyers and sellers and help make transactions faster, easier and cheaper
We believe corporate and public sector electricity buyers, renewable energy suppliers and policy makers have a unique opportunity to work together to help Europe achieve its climate and energy objectives by enabling new, competitively-priced renewable energy resources at a scale not otherwise achievable. The RE-Source Platform will be working closely with the Commission, Member States, and other European institutions, as well as energy consumers like energy intensive industries, SMEs and the public sector to accelerate the transition to a smarter, more sustainable and more secure European energy system.