Why are Corporate PPAs important for the Technology & Communications sector?
Corporate PPAs have evolved from an emerging trend to essential energy infrastructure for global businesses in the Technology and Communications sector, driven largely by surging data centre demand, AI development, as well as environmental and economic advantages of corporate PPA procurement These PPAs allow corporate energy consumers to purchase power on a long-term basis, directly from renewable energy generators without being co-located.
By providing price certainty and long-term hedging against volatile power prices, Corporate PPAs are attractive to large power users who need a continuous and reliable supply, or have energy-intensive server farms for example (such as data centres). In 2024, the Technology and Communications sector continued to lead corporate PPA procurement, representing 30% of disclosed capacity (equivalent to 3.8 GW) and holding its position as the primary driver in the market. Amazon was the biggest buyer globally in 2023, with 8.810.9 GW of Corporate PPA deals, which brought Amazon’s announced corporate PPA portfolio to 33.6GW. By comparison, other tech companies with major clean power purchases in 2023 were Meta (3 GW), Google (1GW) and Microsoft (1.3 GW).
With many technology companies making ambitious ESG and net zero targets, such as Google targeting net-zero emissions by 2030 and Amazon by 2040 (having already met its goal to match 100% of the electricity consumed within its operations with renewable energy), Corporate PPAs enable them to source a significant proportion of their energy from renewable sources, thereby reducing carbon footprints and demonstrating commitment to sustainability targets. As the technology sector has to navigate the energy demands of blockchain and AI applications and pushes for innovative energy solutions in the data centre world (reducing companies’ vulnerability to grid disruption), PPAs provide an important route to obtaining energy resilience.
Smaller tech and communications companies have historically struggled to access corporate PPAs due to limited scale and negotiating power. However, the rise of aggregated PPAs where the pool demand of multiple buyers has begun to democratise access. Platforms like Zeigo and advisors such as Schneider Electric are enabling consortium-based deals, allowing SMEs to participate alongside larger anchor buyers. Notable examples include Philips, Heineken, and Signify’s joint European PPA, which bypassed the need for a dominant lead buyer. As renewable prices fall and deal structures mature, this model is opening the market to a broader range of corporate participants in the technology sector and more widely.
Overall, PPAs are an important tool for the Tech and Comms sector to reduce energy costs, increase sustainability, support the development of renewable energy and improve the sector’s resilience to energy disruption and volatility. Accordingly, the trend is likely to remain at the forefront of companies’ energy agenda as the sector works towards its net zero targets.
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