While 2019 has been a year down for AAE activities in Asia-Pacific (APAC), the region is still making a lot of noise. In Australia, local solar projects providing electricity to businesses have almost doubled to 1GW and a growing number of retailers are offering sleeve programs to provide clean energy to business buyers reliably, such as the official entry into force of green tariffs in U.S. renewable product portfolios (PSRs), requiring large electricity consumers to meet a certain need for clean energy. Japanese auctions of non-fossil allowances have increased 11-fold, which has been reinforced by the country`s strong participation in sustainable development initiatives – without competition in Asian markets. While the speed and final magnitude of the above trends are very uncertain, one thing is clear: the CPCs are here to stay. Given the acceleration of regulatory changes, technological developments and changing market dynamics, other variants will help to consolidate economic models of renewable energy well beyond European markets after subsidies. The challenge will be, as always, to find the right mix of technical solutions and business structures to effectively evade these new models and mobilize the necessary low-cost capital. In the strange and wonderful world of CPC, the only certainty is change itself. PPAs differ depending on the owner of the electricity generation and his or her customer, as well as the type of electricity transmission. The developer and operator of the wind or solar farm sells the electricity directly to a sought-after customer.
This ensures price stability and access to green energy. The seller does not need subsidies, has less risk in the market and ensures stable long-term returns. In the fall of 2017, Vattenfall and Microsoft signed a 10-year contract in the Netherlands to supply green electricity from the new Wieringermeer wind farm, located next to the data centre. It was also a record year for corporate PPAs in Europe, the Middle East and Africa (EMEA) and Latin America, where companies purchased 2.6 GW and 2GW of clean energy respectively. EMEA has been the linchpin of new European markets outside the Nordic countries. Although almost half of the business still comes from Sweden, Norway, Finland and Denmark, companies are starting to sign long-term clean energy contracts in markets such as Spain, Poland, France and Italy. We also recently released our AAE market white paper “Corporate Power Purchase Agreements International Trends”, which shows some of the trends and drivers we have noticed in the countries where we operate.