Amazon is adding to its massive global renewable energy portfolio with 18 new projects in Europe and the U.S. — bringing its global clean energy procurement to 12 gigawatts.
The new utility-scale wind and solar projects across the U.S., Finland, Germany, Italy, Spain and the U.K. total 5.6 GW. Amazon now has 274 renewable energy projects worldwide in hopes of powering 100% of its business operations with renewable energy by 2025.
“We are moving quickly and deliberately to reduce our carbon emissions and address the climate crisis,” said Kara Hurst, vice president of worldwide sustainability at Amazon. “Significant investments in renewable energy globally are an important step in delivering on The Climate Pledge, our commitment to reach net-zero carbon by 2040, 10 years ahead of the Paris Agreement.”
The announcement on Wednesday made Amazon the largest corporate buyer of renewable energy in the world, the company said.
“Amazon is wasting no time demonstrating that they are fully committed to a clean energy future for all,” said Gregory Wetstone, CEO of the American Council on Renewable Energy. “At COP26, the world agreed we needed bigger and bolder ambitions around global carbon reduction from all sectors. With hundreds of renewable energy projects already underway, Amazon is a model for the level of urgency and action we need from the private sector to combat the climate crisis.”
Corporate demand for renewable energy is driving the record deployment of clean energy resources around the world. The power purchase agreement, or PPA, allows a corporation to match its annual energy consumption with clean energy produced elsewhere.
Demand for renewable energy by public and corporate groups, coupled with global supply chain constraints, are likely causing the pricing pressure, analysts wrote.
“Much like we’re seeing supply constraints in other areas of the economy, the most desirable wind and solar projects are going fast,” said Rob Collier, vice president of developer services at LevelTen Energy. “The key takeaway for organizations with fast-approaching emissions reductions targets is to act now to capture high-value PPAs.”
Solar prices increased quarter-over-quarter and year-over-year in Q2 2021 for the first time since Wood Mackenzie began modeling solar market prices in 2014.
Trade issues, meanwhile, threaten President Biden’s goal of generating 45% of electricity from solar energy by 2050. The U.S. government’s enforcement of the Withhold Release Order (WRO) on metallurgical-grade silicon (MGS) from companies with facilities in China’s Xinjiang region, as well as the possible extension of the Section 201 tariffs on imported solar modules, have added to the uncertainty.
While PPA prices are trending upward, LevelTen doesn’t expect demand to soften. According to a survey by the firm, only 12% of solar developers are responding to supply chain pressures by delaying projects.
“ERCOT solar prices have increased by nearly 10% since Q2 2020, driven by steady quarterly increases in pricing at ERCOT’s North, South, and Houston settlement hubs,” Collier said. “Still, ERCOT continues to be the most competitive solar market in the U.S., as abundant land, a unique market structure, and high insolation provide a favorable environment for solar development.”