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Green trend: Corporations buy renewable energy

By State of Green, 07 Sep 2018

Large companies around the world are lining up to secure their electricity from renewable sources. The Danish companies Novo Nordisk and Novozymes recently entered into a major agreement with Swedish energy company Vattenfall.

It is becoming more and more popular among large companies to buy green electricity on long-term contracts from owners of onshore and offshore wind farms as well as owners of large solar parks.

Globally, contracts have been signed for 28 gigawatts (GW) production capacity. New figures from Bloomberg New Energy Finance show that the phenomenon boomed this year with 7.2 GW contracts the first seven months of the year compared to 5.4 GW for the full year of 2017, lead by the Nordic Countries and North America. To put this into perspective, Denmark’s total production capacity from wind and solar is 6.6 GW.

”Companies have now signed long-term contracts to purchase solar and wind in 28 markets, and the number of industries involved in clean energy purchasing continues to grow,” the Bloomberg analysts noted.

-Related news: Danish corporations and organisations selected to lead sustainable development partnerships in Africa, Asia and Latin America

A large Danish agreement
A large Danish agreement was recently established between Novo Nordisk, Novozymes and Vattenfall, concerning power from the coming offshore wind farm Kriegers Flak in the Baltic Sea.

The two corporations agreed to buy one-fifth of the electricity from the 600 MW large wind farm that is expected to produce electricity from late 2021. From the beginning of the agreement (1 January, 2020) and until the launch of the new park, Vattenfall will provide energy from their other Danish wind farms.

Dorethe Nielsen, Head of Corporate Environmental Strategy at Novo Nordisk, explained the motivation behind the agreement:

“The agreement will push Novo Nordisk one step closer to our ambition: that all our production facilities globally will operate on renewable energy. With the Vattenfall agreement, our entire production in Europe will run on green energy,” she said.

Many different models
The agreements, called PPA (Power Purchasing Agreements), were discussed at the RE Scandinavia conference in Malmoe, Sweden a couple of weeks ago. Chief Advisor at Danish Energy, Torsten Hasforth, attended the conference to learn more about where this development is going.

“There is no doubt that this is just the beginning, and that PPAs are going to be more prominent in the future. The general interest from the companies is to show that they are contributing to the green transition. However, it is important to remember that the agreements contribute with varying amounts of new green energy,” said Torsten Hasforth.

He noted that the companies’ entry into the power industry and the power market happens in many different ways. Some install wind turbines and solar panels themselves, while others do like Novo Nordisk and Novozymes and buy the production from others wind and solar power plants. Others buy various green certificates, etc., as seen in the retail market.

-Related news: The world’s largest offshore wind farm is launched

New Facebook goal in 2020
Facebook recently announced its ambition to power its global operations with 100 per cent renewable energy, and reduce its greenhouse gas emissions by 75 per cent by 2020. During the past 12 months alone, Facebook signed contracts for over 2.5 GW.

Facebook is currently building a large data centre in Odense, Denmark. The data centre is expected to be in operation in 2020.

Sources

Danish Energy (in Danish)

Bloomberg New Energy Finance

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