AMSTERDAM – The European Union is the first jurisdiction in the world to legislate that there should be no administrative or regulative barriers to corporate renewable power purchase agreements (PPAs), WindEurope CEO Giles Dickson told New Europe.
“That is very positive. We don’t have this in US legislation yet. That’s a very positive signal that the EU can give to other countries,” Dickson said, speaking on the sidelines of the RE-Source 2018 event in Amsterdam on November 20. “PPAs are beginning to happen all over the world and it’s perfectly logical. First, because renewables are becoming the cheapest, have become the cheapest form of new power generation in most of the world now, wind in some countries, solar in other countries depending on the location,” he said.
“You have more and more large industrial and corporate consumers of energy who are turning to renewables and they’re turning to electricity and they want electricity to be driving this,” the WindEurope CEO said, noting that this is how large industrial and corporate consumers of energy are going to become more energy efficient, reduce their CO2 footprint, reduce their emission of sulfur dioxide and other pollutants. “And PPAs are a tool, which enables industrial corporate consumers to lock in their long-term energy process at cheap prices so it makes sense for them,” Dickson said.
According to WindEurope, PPAs worth 6 GW have already been signed in Europe, representing billions of Euros of investment and thousands of jobs. Nearly 2 GW of this has been contracted in 2018 alone. Commercial and industrial on-site corporate sourcing accounted for 1.7GW in 2017 and is expected to grow considerably in the next five years.
In an effort for EU and the world to address climate change, the European Commission is expected to announce next week the EU Strategy for long-term greenhouse gas emissions reductions.
The timing of releasing that EU’s long-term decarbonisation strategy is perfect, Dickson said. “We have COP24, the UN climate negotiations coming up in Katowice, of course. The Commission is very keen that the EU should retain its global leadership in the fight against climate change. Europe is in fact not the global leader, the US is the global leader but the EU is rapidly catching up,” he said.
As the recent Intergovernmental Panel on Climate Change report in the run-up to COP 24 made clear, addressing climate change is urgent. Asked if they are in touch with the Commission, Dickson said, “Absolutely. And they are here. Indeed, we are constantly talking to the Commission about this,” he said.
In Amsterdam on November 20, almost 100 organisations led by major corporates signalled their willingness to do more on climate action calling on European governments to make it easier to invest and directly source renewable energy. The group signed this declaration at the RE-Source 2018 event in Amsterdam.
To unlock the full potential for investing directly in onsite and offsite renewable energy and through PPAs, the declaration calls on policymakers to remove all regulatory and administrative barriers to corporate sourcing of renewable energy, as required by the recently enacted Renewable Energy Directive, so the early success – mainly concentrated to date in the Nordics, the Netherlands and the UK – can be replicated more broadly, WindEurope said.
Corporates also ask for greater clarity and certainty on the long-term ownership of Guarantees of Origin, which are crucial for corporates to know they are buying renewable electricity. Corporates also call for the enabling of a wide variety of procurement models and market products, from on and offsite solutions to multi-corporate renewable power purchase agreements (PPAs) to minimise risks and maximise participation. Corporates must also be allowed to sign cross-border renewable energy transactions to maximise opportunities to deploy the most cost-effective renewable energy solutions, WindEurope said, adding that industrial and commercial consumers account for around half of Europe’s energy consumption today.